Budget chief catches flak on deficit commission

OMB director says plan is the way to prevent fiscal disaster.

Office of Management and Budget Director Peter Orszag found critics on both sides of the House Ways and Means Committee Wednesday as he attempted to explain President Obama's proposal for a bipartisan commission to recommend ways for reducing the deficit.

The skeptics included House Ways and Means Committee Chairman Charles Rangel, D-N.Y., who pressed Orszag to explain why a commission should be created to co-opt Congress and its responsibility to put the country's financial house in order. "It doesn't seem like a profile in courage to me," said Rangel.

Orszag said the administration believed that a bipartisan solution was needed to prevent a fiscal train wreck. "The commission is the avenue for doing that," he explained.

The OMB director noted that Senate Majority Leader Harry Reid, D-Nev., had pledged a prompt Senate vote on the commission plan, and House Speaker Nancy Pelosi, D-Calif., had promised to follow suit in the House if the Senate cleared the fiscal blueprint.

"We can get a vote but we don't know which way the vote is going to go," retorted Rangel.

House Ways and Means Committee ranking member Dave Camp, R-Mich., also expressed qualms about Obama's deficit-reduction panel, saying he was concerned about its structure and its power to recommend tax increases.

In other testimony, Orszag was forced to defend last year's $787 billion economic stimulus measure against Republican allegations that it had exacerbated the deficit while failing to achieve its goal of keeping the unemployment rate below 8 percent. "I can tell you the folks in my district are very, very reluctant about going forward and spending more money," said Rep. Peter Roskam, R-Ill.

Orszag argued that the stimulus package saved between 1.5 million and 2 million jobs and slowed the rate of job losses from 700,000 a month at the beginning of 2009 to 100,000 a month now. Without the stimulus, "we would have had a much higher probability of entering a recession," Orszag said.

He also put in a pitch for reviving the stalled healthcare reform legislation, warning that ultimately the deficit could not be tamed without action to bring down runaway health costs. "Unless we address [that] ... there is nothing else that is going to matter," he said.

Rep. Wally Herger, R-Calif., challenged this assertion, noting that an audit of the congressional reform bills done by the Centers for Medicare and Medicaid Services concluded that they would not reduce healthcare spending.

Republicans also complained that the business tax increases called for in the White House's fiscal 2011 budget plan, such as the elimination of the $38 billion-a-year energy production tax credit, would cause additional job hemorrhage.