Budget experts testify CR fight does little on deficit

Former Clinton budget director Alice Rivlin and former Sen. Pete Domenici (R-N.M.) told the Senate Budget Committee on Tuesday that the current debate over 2011 spending is a distraction from solving long-term debt problems.

Domenici, a former Budget Committee chairman, said the House GOP spending bill is not a much of a stab at solving the larger debt issue. “I don’t believe that the cuts to domestic discretionary [spending] have much to do with deficit reduction,” he said.

He also minced no words in criticizing President Obama for failing to lead on the debt, and said Congress may have to try to go it alone.

Asked to react to the Domenici remarks later on Monday, House Majority Leader Eric Cantor (R-Va.) said that the House spending bill that would cut $61 billion this year is a first step, and that Republicans will be tackling entitlements in next month’s budget resolution.

Rivlin and Domenici have authored their own plan that would cut spending over the long term, raise taxes and reform entitlements. Domenici defended the tax increases and said he is not impressed with anyone who claims to know in the abstract that taxes should not be above a set percentage of GDP.

At the hearing, committee Chairman Kent Conrad (D-.N.D.) said the 2012 budget resolution process may be the opportunity to produce a long-term deficit plan, even though the congressional budget resolution is not a law that is signed by the president.

Conrad is involved in Gang of Six Senate talks on coming up with a long-term deficit plan, and he said that these “may” bear fruit. If not, the five-year budget resolution could be a chance to hash out a compromise.

Conrad emphasized that to truly deal with the long-term debt, Medicare and Medicaid have to be tackled.

“Healthcare is the 600-pound gorilla in the room,” he said.