House Dem leaders' reactions to fiscal panel report differ sharply

House Democratic leaders differed sharply in their reactions to an outline of deep spending cuts and tax hikes offered by leaders of the president’s bipartisan fiscal commission.

Speaker Nancy Pelosi (D-Calif.) came out swinging, calling the proposals “simply unacceptable,” while the two men battling to be her deputy, Majority Leader Steny Hoyer (Md.) and whip James Clyburn (S.C.), released muted responses. Neither Hoyer nor Clyburn criticized the commission, avoiding a politically explosive set of ideas as they wrestle for support from their Democratic colleagues for the post of minority whip.

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“Reducing our current budget deficit will require serious conversations about how we can grow our economy while bringing our fiscal house in order and maintain safety nets for the vulnerable among us in a fair and equitable way,” Clyburn said in a statement Thursday. “The president’s fiscal commission has begun that conversation, and it behooves all of us to participate in these discussions with open minds and hearts.”

Hoyer issued no statement at all. “The draft put forward is still under discussion by commission members, and we'll wait to see the commission's final recommendations,” spokeswoman Katie Grant said.

The pressure is even greater on the majority leader, who has stood apart from other party powerbrokers by publicly embracing proposals to increase taxes and cut defense spending to balance the budget and to raise the retirement age to keep Social Security solvent.

“To share sacrifices fairly, and to be politically viable, the commission’s proposal can only have one form: an agreement that cuts spending and raises revenue when the economy recovers,” Hoyer said in June during a speech to the Third Way, a centrist Democratic think tank.

“On the spending side, we could and should consider a higher retirement age, or one pegged to lifespan; more progressive Social Security and Medicare benefits; and a stronger safety net for the Americans who need it most.”

Hoyer also called for Congress to hold an up or down vote on whatever the commission recommended. Pelosi committed to holding a House vote if the Senate acted first on the proposals.

Hoyer’s proposals, said Matt Bennett, a vice president at the Third Way, “look pretty similar to some of what was in the co-chairmen’s recommendations.” The Third Way has praised the commission’s draft proposals, which Bennett described as “impressive, gutsy and totally in the right direction.”

The Democratic House caucus in 2011 will be much smaller and more liberal than when Hoyer spoke in June, and he is now courting more progressive lawmakers in his bid against Clyburn for minority whip. “He’s in the middle of a leadership battle, and it’s completely to be expected that he’s not going to go out on a limb,” Bennett said.

The commission’s chairmen, former Sen. Alan Simpson (R-Wyo.) and Erskine Bowles (D-N.C.), a former White House chief of staff, on Wednesday released a 50-page document that included dozens of proposals under consideration by the 18-member panel. They cautioned that the draft did not represent the commission’s final recommendations, which are due to Congress on Dec. 1 and must garner support from 14 of the 18 panelists.

Among the ideas offered by Simpson and Bowles were cuts in defense spending and gradual increases to the payroll tax and the retirement age to pay for Social Security.

Of the House Democratic leaders, Clyburn also has proposed changes to the payroll tax and the retirement age to protect Social Security benefits. On his official Web site, the South Carolina Democrat writes that “with minor changes to the program such as raising the salary cap and raising the retirement age by one month every year, the program could become solvent for the next 75 years.” The web page appears to be dated to the George W. Bush administration, however, since it assails the president for promoting the idea that the Social Security system is “broke or ‘busted’” in order “to scare young people into believing Social Security won’t be there for them.”

President Bush proposed an overhaul of Social Security in 2005, while President Obama has yet to release a detailed plan.

A Clyburn spokeswoman, Kristie Greco, said the options outlined on his website stemmed from Bush’s proposal to allow Americans to open private Social Security accounts. “As an alternative to Social Security privatization, small changes to the system could make the program solvent for the next generation, that includes raising the salary cap or raising the retirement age,” Greco said. “The solution Congressman Clyburn has campaigned on and supports is raising the salary cap on income subject to FICA to the level it was when the program was created.”

While Hoyer and Clyburn indicated an openness to considering the panel’s proposals, Pelosi in her initial statement suggested they were a nonstarter in the House. On Thursday, a spokesman for the Speaker, Nadeam Elshami, clarified her comments with notably softer language. “Any final product must meet our standard of creating jobs, reducing the deficit and preserving Social Security,” he told The Hill. “At this time, this proposal does not meet that standard but we look forward to the commission’s final report.”

Pelosi, of course, is mounting her own bid to keep power in the Democratic caucus, where dozens of liberal members have already pledged to fight reductions in Social Security benefits. Her statement, Bennett said, was intended “to lay down a marker for the liberal side of the caucus, and she did that effectively.”

Another Democratic leader trying to keep his job, Rep. John Larson (Conn.), also panned the commission’s draft, saying “any plan to cut Social Security benefits for the elderly and disabled is quite simply dead on arrival.” Larson is running for re-election as caucus chairman.