WASHINGTON — Idaho lawmakers Mike Simpson and Mike Crapo, key players in the national deficit-reduction debate, say they’re trying to move past the failed “happy talk” and come up with actual legislation that can pass Congress in spite of toxic election-year politics.
There is huge skepticism in Washington that a grand deficit-reduction deal will be possible in this overheated environment.
And both conservative Republicans favor a mix of spending reductions and new revenues that’s not going to pass without a major battle.
Simpson is the leading House Republican in the Go Big Coalition, a bipartisan group of more than 100 lawmakers that formed in November to urge the deficit-reduction supercommittee to “go big” in striking a deal that would cut the deficit by at least $4 trillion over 10 years.
But the supercommittee was a flop. Simpson now hopes the Go Big Coalition can step into the breach. It won’t be easy: The supercommittee was guaranteed that whatever plan it produced would be considered on the floor, but no one else has that edge.
“The big question we all have is whether there’s any way we can get a vote on it, and what is the appetite of members of Congress to do something in an election year,” Simpson told the Idaho Statesman. “I don’t think we can wait until after the election. We need to take some action during this year regardless of the election.”
The supercommittee’s failure means $1.2 trillion in automatic spending cuts will start kicking in in January 2013 unless something is done. Half of those cuts would come from defense and the other half from domestic spending. Simpson said a lot of lawmakers in Congress find that unacceptable, but that doesn’t mean there will be enough political will to change it.
Simpson said he and other leaders of the Go Big Coalition hope to meet this week to discuss what to do next.
THE GANG OF SIX (NOW EIGHT) IS BACK
Crapo, meanwhile, is part of an effort in the Senate to accomplish the same goal. Crapo is a member of the Gang of Six, a bipartisan group of senators that released a debt-reduction framework during last summer’s contentious debate over raising the debt ceiling.
“The reality is that we, as a country, don’t have a choice as to whether we will deal with the deficit issue,” Crapo told the Statesman. “If we don’t deal with it, then the bond markets will deal with it.”
Senate Majority Leader Harry Reid, D-Nev., last year said Gang of Six efforts were just “happy talk” until there was a bill. Simpson says Reid had a point. Simpson and Crapo say their goal now is to secure agreement on an actual bill.
Crapo said the Gang of Six pulled back last year to give the supercommittee a chance to do the work Congress ordered. But after the supercommittee’s failure, Crapo said the Gang of Six — which has since grown to eight senators — is stepping up its efforts.
“Now we are continuing to meet and hopefully negotiate a bill around which the consensus can be built,” Crapo said.
The original model proposed by the Gang of Six called for a ratio of 3-to-1 spending reductions to new revenues. Crapo said the gang’s general idea is still for new revenue to come from cutting back on allowable tax deductions, credits and exemptions — which he argued would then allow Congress to lower overall tax rates.
“Most of us believe that kind of tax reform would be such a powerful stimulus to the economy there would actually be greater revenue to the Treasury because of growth, so that revenue is part of the package,” he said.
Simpson has a similar view of changing the tax code.
ANALYST: IT’S DOABLE ONLY WITH A GOP SHIFT
William Galston, a senior fellow at the Brookings Institution in Washington, D.C., said efforts such as Simpson’s and Crapo’s to craft a deal aren’t going to work unless more Republicans drop their opposition to new revenues.
“If the Republican Party is rethinking its stance on that issue, it would be big news,” he said in an interview.
Simpson said the deficit problem can’t be solved without at least $4 trillion in savings over the next decade.
“In order to get to that size, it’s going to take reform of the entitlement programs, it’s going to take restraint in discretionary spending, and it’s going to take revenue,” he said. “The debate will be: How do you reform Medicare and Social Security programs, and how do you get the revenue?”
President Obama said in his State of the Union address last week the wealthiest Americans should be paying more taxes for the sake of the deficit and fairness. Obama said those who make more than $1 million a year shouldn’t pay less than 30 percent in taxes.
“Now, you can call this class warfare all you want,” Obama said. “But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.”
Simpson put out a response to the speech saying that Obama was dividing Americans for political gain and that “putting Band-Aids on our broken tax code does nothing to fix it.”
But Simpson concedes that even within the Go Big Coalition, there isn’t agreement on a solution, and time is growing short for a deal.
“If you’re going to do something this year I think you’re going to have to do it within six months,” he said. “Otherwise you’re getting too close to the election.”
Sean Cockerham: (202) 383-6016. Cockerham, of McClatchy Newspapers, is the Washington correspondent for the Idaho Statesman.
