At least one senator is optimistic about avoiding the fiscal cliff

Calling himself “heartened” by Republican colleagues who are distancing themselves from pledges against tax hikes, Sen. Dick Durbin, D-Ill., said he is “optimistic that a deal will get done” to avoid the so-called fiscal cliff, but said he wanted to see “some willingness to step forward on the left” and tackle the painful issue of entitlement reform.

Speaking Tuesday at the Center for American Progress, Durbin, the majority whip and member of the bipartisan Gang of Eight senators conducting their own budget talks, said the fundamentals of an agreement on a consensus figure of $4 trillion in deficit reduction are doable by the end of the year, with implementation to follow. “We could then launch a spirited economic recovery and show it to the rest of the world,” he added. “It will be hard work, but all will prosper.”

Durbin said he hoped House Speaker John Boehner, R-Ohio, would strive for a bipartisan solution to the budget crisis, and Durbin pooh-poohed suggestions that the ongoing budget talks have stalled, calling this week’s round of political rallies and categorical negotiating statements “just playing pingpong.”

What will not break the impasse, Durbin warned, are approaches such as those taken in newspaper ads declaring “hands off” entitlements or tax rates. He described being scolded by a labor leader for participating in the bipartisan talks with conservative senators, but then convincing the liberal activist that “it’s better to stay at the table.” He said, “progressives can’t afford to stand by the sidelines in denial. We must be open to some painful topics that are hard to talk about so that we may work toward reform and significant change that preserves the values and programs that brought us to political life.”

Specifically, Durbin called for the House to take up the bill the Senate passed in July to extend the expiring George W. Bush tax cuts for those earning less than $250,000, or 98 percent of the country.

He would then negotiate based on three principles: preserving the progressive income tax to counter rising inequality; protecting the social safety net -- food stamps, for example; and staying mindful of the need to “keep the recovery on track.”

He said he favors a return to the detailed proposals on spending cuts, taxes and entitlement reforms embodied in the 2010 Simpson-Bowles commission plan. He added the 2011 Budget Control Act will already produce $1.5 trillion in spending cuts over the next decade, most of them in nondefense accounts. Hence, Durbin said, the next round of savings can come largely from defense “without harming national security.” He praised the $23 billion in savings contained in the Senate-passed farm bill.

Durbin called for a national infrastructure bank with its own funding mechanism. Though he would keep Social Security out of the fiscal cliff deal, he also called for a commission similar to the successful one that in 1983 delivered such changes as hikes in the payroll tax and retirement age, as well as first-time taxation of benefits. “Small changes made today will play out over the long haul to keep the program going,” he said. His proposal would give a commission eight months to prepare a plan ready for floor votes.

“The most painful issues,” Durbin said, are Medicare and Medicaid --Medicare because it runs out of money in 12 years and Medicaid because it “is a special case” with no political lobby representing it.

Rejecting the reform proposals of House Budget Committee Chairman Paul Ryan, R-Wis., during his recent run for the vice presidency, Durbin said millions of low-income children, pregnant women and the elderly depend on Medicaid and they should not absorb major cuts in benefits. He suggested some possible savings in awarding the so-called “dual eligibles” health benefits at the lower Medicaid rate rather than the Medicare rate.

Durbin dismissed suggestions by some Republicans that negotiators reopen President Obama’s landmark health care reform law to find new savings. “The Affordable Care Act is the most important vote I’ve ever cast,” Durbin said. “The only perfect law was carried down in stone tablets by Sen. Moses. We will find out, once the state exchanges are up, whether we’re meeting the goals. If the law were repealed, we would be in the soup with no cost controls in health care.”

Eying the looming fiscal cliff talks, Durbin said the recent election produced “a work order -- for us to get the job done.”