Lawmakers see danger in national debt

The leaders of two key Senate committees and two prominent economists said Thursday that without dramatic action to reverse the growth, the soaring national debt will reach a level that would threaten the U.S. economy and the federal government's ability to function.

During a Senate Homeland Security and Governmental Affairs Committee hearing, they also agreed that the normal legislative process is incapable of solving the problem and Congress must create a high-level body that would recommend bold actions needed to avert a crisis.

To force Congress to accept the encroachment of its powers, the four lawmakers said they, and at least eight other senators, have pledged not to support a permanent increase of the national debt limit beyond $12.3 trillion unless the Senate acts to create a debt-reduction panel.

With that opposition, the 60 votes that would be needed to extend the debt limit "is going to be very hard to get," Senate Homeland Security and Governmental Affairs Committee Chairman Joseph Lieberman, I-Conn., said at a hearing.

"There will be no long-term extension of the debt without this being addressed," Senate Budget Committee Chairman Kent Conrad, D-N.D., said.

Conrad and Budget Committee ranking member Judd Gregg, R-N.H., described their legislation to create a Bipartisan Task Force for Responsible Fiscal Action, composed of 16 members of Congress, Treasury Secretary Tim Geithner and another administration official.

The task force would be required to submit its recommendations on how to reverse the growth in national debt shortly after the 2010 elections and Congress would have to act on the proposals before the end of 2012.

"Everything must be on the table, spending and revenues," Conrad said.

Gregg said their legislation already had 34 co-sponsors, including senators from both parties. "It is obviously time to act," Gregg said. Even if the task force were put in place today, "it would take years for the policies to be implemented, and the debt would accumulate."

The Conrad-Gregg proposal is similar in purpose to legislation Lieberman introduced, called the "Securing America's Future Economy Commission Act," which would include experts from outside government.

Lieberman appeared to embrace the rival proposal and agreed that Congress and the administration will not solve the problem. "We like to spend money, and we don't like to raise taxes. If we keep doing that it leads to unsustainable debt," Lieberman said.

The problem is "the government has promised more than our citizens can pay," Senate Homeland Security and Governmental Affairs Committee ranking member Susan Collins, R-Maine, said.

The task force concept also was endorsed by Alan Greenspan, the former Federal Reserve chairman and David Walker, former U.S. comptroller general and head of the Government Accountability Office. The two economists echoed the warning that the current deficit spending and the massive unfunded liability for Medicare and Social Security will drive the national debt to a level that would choke business credit and destroy the government's ability to borrow what it needs to operate.