House majority leader touts deficit reduction commission, pay/go

As Congress gears up to increase the statutory debt limit, House Majority Leader Steny Hoyer, D-Md., Friday said he supports enacting a deficit reduction commission as well as a pay/go law that would require that increases in mandatory spending and any new tax cuts be offset.

"I'm hopeful that we can adopt both of those processes in conjunction with making sure that America can pay its debts," Hoyer said during an appearance on CNBC, adding that enacting a deficit commission and a pay/go law would help bring down the growing deficit.

"We need to put this country on a road to fiscal balance and responsibility," Hoyer said. "And that will be our focus."

Hoyer's comments come as the Senate is set to begin debate next week on legislation to increase the debt ceiling. Congress raised the limit by $290 billion Dec. 24 to nearly $12.4 trillion, but that ceiling is expected to be reached by mid-February. Congress is expected to increase the debt limit to over $13 trillion to prevent having to act on the matter before the November mid-term elections.

In connection with the increase, the Senate is also expected to consider a number of amendments, including a proposal from Senate Budget Committee Chairman Kent Conrad, D-N.D., and ranking member Judd Gregg, R-N.H., that would establish a commission that would make recommendations on how to reduce the deficit, which Congress must consider. Senate Majority Leader Harry Reid, D-Nev., may also offer an amendment to make pay/go a law.

But it is unclear whether these amendments will win the 60 votes needed to pass.

Hoyer said he and House Speaker Nancy Pelosi, D-Calif., have been working with Reid and Conrad on options for reining in the deficit, which topped $1.4 trillion in fiscal 2009.

Pelosi had initially opposed a deficit commission -- preferring the committees of jurisdiction to tackle the deficit -- but is now appears more open to the idea, so long as it is part of a larger deal to enact a pay/go law, according to a senior House leadership aide. The aide stressed Pelosi would still need to review the details before signing off on a commission.

But Senate Finance Committee Chairman Max Baucus, D-Mont., has also opposed the commission, which he claims would usurp the power of elected officials.

Conrad and Gregg have argued that the commission is needed because the committee process had failed to do the job. They also have stressed the importance of requiring Congress to consider the commission's recommendations.

But on the pay/go issue, Conrad has said he does not support the House approach because under the House passed pay/go bill, four policy items are exempt, including the alternative minimum tax.

Supporters of the House measure have said the exemptions are needed because Congress has typically failed to offset these items.

Senate leaders will have to decide whether to follow the House on its pay/go proposal.