Bipartisan group announces debt panel

Supporters of a deficit-cutting commission got a boost Monday from the Bipartisan Policy Center, which announced it is launching such a panel.

Led by former Sen. Pete Domenici, R-N.M., and former Congressional Budget Office Director Alice Rivlin, the commission will draw up a package of spending cuts and taxes for expedited consideration by Congress, according to the group.

It was founded in 2007 by former Senate Majority Leaders Howard Baker, R-Tenn., Tom Daschle, D-S.D., Bob Dole, R-Kan., and George Mitchell, D-Maine.

Calling the group committed to coming up with a debt reduction plan, Domenici said all options are on the table, including tax increases, caps on discretionary outlays and cuts in mandatory spending.

Meanwhile, the Senate is on track to vote Tuesday on an amendment creating such a panel, as part of legislation raising the statutory debt limit by $1.9 trillion.

Under the amendment, sponsored by Senate Budget Chairman Kent Conrad, D-N.D., the commission's recommendations would have to be taken up by Congress.

But it is unclear whether the Conrad amendment will win 60 votes. If it fails, President Obama is expected to form a similar commission by executive order as part of an agreement with Conrad and about 13 other fiscally conservative Senate Democrats needed to get the 60 votes to pass the debt ceiling bill.

Under the plan, House and Senate leaders are expected to agree to take up the presidential commission's recommendations.

The agreement also requires the Senate to pass a pay/go amendment that Senate Majority Leader Harry Reid, D-Nev., introduced late Friday. The amendment limits the time that three policy items would be exempt from pay/go, which is a compromise between the Senate and supporters of a House-passed pay/go bill that did not put any time limits on the exemptions.

The alternative minimum tax and estate taxes would be exempt for two years, and providing higher Medicare payments to physicians would be exempt for five years. However, the 2001 and 2003 tax cuts for the middle class would be exempted without a time limit, as in the House bill.

The Senate is also expected to take up Tuesday an amendment by Senate Finance Chairman Max Baucus, D-Mont., that would protect the Social Security program from being cut by the Conrad commission, which he thinks would be treated unjustly by such a panel. Baucus has been a fierce critic of the Conrad amendment, arguing that the committees of jurisdiction should take on the deficit.

Rivlin said Monday some small items would go a long way toward reducing the deficit over time, including raising the retirement age; changing the indexing of Social Security; and means-testing Medicare. But she stressed such items might not necessarily be in the commission's recommendations.

The group intends to produce a report before the end of the year, after the midterm elections, and will lobby Congress to take them up. Domenici pointed to the relative success of the commission formed in the wake of the Sept. 11, 2001, terrorist attacks, as a precedent.

Domenici and Rivlin said they are pleased that the Senate will act on creating a commission one way or the other, and Rivlin described their plan as a "stalking horse" for the others.