Budget battle moves on to super committee

The budget battle is not over. Many of the most nettlesome questions have been left for a new bipartisan super committee of 12 lawmakers whose task will be to find at least $1.2 trillion more in deficit cuts spread over the next decade.

The six Democratic and six Republican lawmakers — equally divided between the House and Senate and to be chosen in the next two weeks — is sure to experience the same ideological divisions over tax increases and cuts to programs like Medicare that bedeviled efforts involving top lawmakers and the White House this year.

But there's a real price to be paid if the committee deadlocks or if either the House or Senate rejects the panel's recommendations: the threat of deep, across-the-board spending cuts that would strike GOP priorities like defense and programs for the poor that are priorities for Democrats. The cuts wouldn't hit until January 2013, but their potential impact would have affected interest groups like defense contractors and farmers gulping.

"The answer's pretty obvious. Hanging over the head of the joint committee is this trigger that is pretty drastic," said Senate Majority Leader Harry Reid, D-Nev., a driving force behind the super committee concept contained in the debt ceiling legislation President Barack Obama signed Tuesday.

The panel's target is to find $1.2 trillion to $1.5 trillion in budget cuts over the coming decade, including interest savings. Democrats insist it will have to take an approach that balances tax revenues with spending cuts. Republicans promise that taxes are off the table. That in itself is a recipe for continued gridlock.

Cynics predict the committee will deadlock just as similar panels have done previously. But underneath the partisanship that has consumed Washington recently is bipartisan spadework undertaken by Obama's deficit panel and the Senate's "Gang of Six." And unlike the deficit commission, which required approval by a supermajority of 14 of the 18 members, the congressional super committee needs just a majority vote.

"The joint committee is not going to gridlock, in my opinion," Senate Minority Leader Mitch McConnell, R-Ky., said. "The joint committee is designed to function and to tackle some of the very difficult problems that we have been unwilling or unable to deal with."

The debt and budget measure enacted Tuesday already contains more than $900 billion in cuts over the coming decade to the annual operating budgets of Cabinet agencies responsible for thousands of programs funded by Congress each year in appropriations bills.

That means to find the additional savings the new committee will scour the so-called mandatory side of the budget — programs whose spending levels basically run on autopilot because they're set by funding formulas and eligibility criteria. They include Medicare, the Medicaid health plan for the poor and disabled, Social Security and veterans' retirement benefits, among others.

The first place to start looking for savings is the work of a group led by Vice President Joe Biden that tried to find savings for the debt ceiling bill. That group broke apart over Democratic demands on taxes but had made decent headway in developing a consensus package of cuts to programs like farm subsidies, federal pensions and military health benefits, and cuts to Medicare providers like skilled nursing facilities and home health care providers.

Another savings option would be to use a smaller inflation adjustment when calculating Social Security cost-of-living adjustments and federal retirement benefits. This also would raise revenue by easing taxpayers into higher tax brackets more quickly.

The new debt and budget pact also should jump-start Capitol Hill's moribund appropriations process, which has been hung up — especially in the Senate — because until now there hasn't been agreement on how much to cut agency budgets.

For the tea party-driven House, the cuts in the debt bill — which are measured against an inflation-adjusted "baseline" estimate of future spending — actually provide $24 billion more for this year's appropriations bills than permitted under the budget passed by the House in April. The overall total for the 12 spending bills is $1.043 trillion, a $7 billion cut from current levels.

Democrats will press to restore cuts planned by Republicans to education, environmental programs, housing subsidies and foreign aid, among others. That will be made easier by the fact that the debt ceiling agreement also requires Republicans to pare back a $17 billion, 3 percent increase for the Pentagon that passed the House last month.