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Politics & Government

Deficit panel to delay vote on report to Friday

Kevin G. Hall - McClatchy Newspapers

November 30, 2010 06:18 PM

WASHINGTON — The leaders of a special bipartisan commission created to recommend ways to lower federal deficits and the national debt said Tuesday that they're delaying a vote on recommendations until Friday.

After working until the wee hours Monday and Tuesday, leaders of the National Commission on Fiscal Responsibility and Reform announced that they'd make their report public Wednesday as planned, but would put off a vote until Friday to permit more internal discussion.

"It's all about making tough, difficult choices," said Erskine Bowles, a commission co-chairman and former White House chief of staff under President Bill Clinton, in announcing the delay.

Bowles and his Republican counterpart, former Sen. Alan Simpson of Wyoming, said they don't expect major revisions to their draft proposal, which they issued in mid-November. It envisioned deficit reduction totaling $3.9 trillion over the next nine years, cutting the deficit in half by 2015, and by three quarters in 2020.

"The era of deficit denial in Washington is over," said Bowles, currently the head of the multi-campus University of North Carolina system.

The complete 18-member panel will get a final report Wednesday morning, then discuss it in a public forum at 9:30 a.m. EST. The forum will be broadcast on the White House website.

Neither Simpson nor Bowles would say how many votes they expect beyond their own. Any final recommendations that the deficit commission submits to Congress must include only proposals that 14 of the 18 commission members support, which means they must draw bipartisan backing.

The issue of government deficits has taken on new urgency as European nations such as Greece, Ireland, Spain and Portugal are seeing their economies battered because of them. Debt-wary investors are demanding higher rates of return for buying government bonds from those countries. Those bonds finance deficit spending. There are growing concerns that the U.S. could face a similar revolt by bond buyers in time.

"So far, the bond vigilantes haven't gone on a rampage in the U.S. despite projections of $10 trillion in deficits over the next 10 years. So it's no wonder that Washington's political leaders are acting as if they've been handed a blank check by the bond market," wrote Ed Yardeni, a financial analyst who coined the term "bond vigilantes" in 1983, in a Tuesday research note. "The risk is that the blank check will eventually bounce, as it just did in Greece and Ireland. It may soon do so in Portugal and Spain."

Bowles and Simpson, too, suggested that time is running out for bringing down deficits and debt before financial markets force action.

"I'd like to think we have six years, but I sure wouldn't make a bet on it," Bowles said.

Added Simpson, "That trajectory of ours is the same as the other countries (in Europe). It's just bigger."

Bruce Reed, the commission's executive director, said that Senate Majority Leader Harry Reid, D-Nev., committed to bringing up the report's recommendations if the 14 votes are there. The next House speaker, Rep. John Boehner, R-Ohio, hasn't committed to doing so, Reed said, adding that Boehner had not been asked, either.

"We're taking it one step at a time," Reed said, adding that Friday's vote will not be piecemeal. "We're not going to do rifle shots."

ON THE WEB

Commission draft report

Watch the commission discuss its findings Wednesday

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