WASHINGTON — The fragile economy and wildly gyrating financial markets could put enormous pressure on Congress’ new debt-reduction supercommittee. Yet even as leaders finished naming the bipartisan panel’s members, it remained uncertain that it will ultimately agree on a savings plan.
House Minority Leader Nancy Pelosi, D-Calif., announced the panel’s final three members on Thursday, and like the previous nine all are congressional veterans. They are Reps. James E. Clyburn of South Carolina and Xavier Becerra of California, members of their party’s House leadership, and Chris Van Hollen of Maryland, top Democrat on the Budget Committee.
Last week’s agreement between President Barack Obama and Congress creating the panel gives it until Nov. 23 to propose $1.5 trillion in savings over the coming decade. If the committee fails to agree on a plan — or if Congress doesn’t approve one by Dec. 23 — automatic spending cuts would be triggered affecting hundreds of federal programs.
As if that weren’t enough pressure, recent days have seen world financial markets endure breath-taking ups and downs, plus the downgrade of the nation’s credit rating by Standard and Poor’s and continued fears of economic weakness in the U.S. and Europe.
In a conference call with reporters, Clyburn said he believes the panel can produce more than $1.5 trillion in savings, as long as Republicans drop their objections to raising revenues.
“I think the moment we can get some of our Republican friends to stop interpreting closing loopholes as raising taxes, we’ll get home free on this,” Clyburn said.
Underscoring the political tensions involved, House Speaker John Boehner, R-Ohio, said it is time for Obama “to outline his own recommendations to rein in the massive deficits and debt that are undermining job creation in our country.”
With next year’s presidential and congressional elections looming ever closer, there have been no indications that the two parties will back down on their bedrock demands: Democrats unwilling to accept cuts in Social Security, Medicare or Medicaid benefits, and Republicans refusing to allow tax increases. That deadlock has shoved huge potential savings off the table for bargainers.
That same stalemate prevented Obama and Congress from going beyond the roughly $2 trillion in debt reduction that last week’s deal yielded, an amount budget analysts consider half or less of what is needed to begin taming the red ink. All 12 members of the supercommittee — evenly divided between Democrats and Republicans — are long-time Washington politicians who seem likely to hew to party priorities.
“When you’re dealing with really tough issues in which the public will have to give up something, the main impetus for acting is when the pain of not acting is greater than the pain of acting,” said Eugene Steuerle, a former Treasury Department official who now studies budget issues for the nonpartisan Urban Institute.
Steuerle said that so far, it’s unclear whether the public would hold the supercommittee — and by extension, Congress — accountable should they fail to broker a deal.
Steve Bell, an economic analyst at the centrist Bipartisan Policy Center and former top GOP Senate aide, said members of the panel might decide they would be blamed if inaction by the supercommittee was followed by another deep recession.
“Do you want to be known as one of the 12 who set in motion another financial crisis?” he said.
Pelosi’s choices brought racial diversity to the supercommittee, since Clyburn is black and Becerra is Hispanic.
The panel’s co-chairs will be conservative Rep. Jeb Hensarling, R-Texas, part of the House GOP leadership, and Sen. Patty Murray, D-Wash., who heads the Senate Democratic campaign arm and will be the supercommittee’s only woman.
Other Republicans on the panel are House Ways and Means Chairman Dave Camp and House Energy and Commerce Chairman Fred Upton, two long-time Michigan lawmakers; Sen. Jon Kyl of Arizona, a conservative and confidante of Senate Minority Leader Mitch McConnell, R-Ky.; GOP Sen. Pat Toomey of Pennsylvania, a House veteran who joined the Senate last year with tea party backing; and fellow fresh man Sen. Rob Portman of Ohio, a former House member and budget director for President George W. Bush.
The other Democrats are 2004 Democratic presidential nominee and Senate Foreign Relations Committee Chairman John Kerry, D-Mass., and Senate Finance Committee Chairman Max Baucus, D-Mont., a moderate who strayed to back Bush’s 2001 tax cuts.
In an AP interview, Baucus predicted the committee would be successful.
“The situation is more dire,” Baucus said. “More people are saying, ‘Hey, guys and gals, get it together up there.’ All of this is adding a lot more pressure and making it more likely we reach an agreement.”
Four supercommittee members — Baucus, Becerra, Camp and Hensarling — were members of a White House commission that recommended trillions in budget savings last year. All voted against the commission’s recommendations, which have not been implemented.
With the supercommittee split evenly between the two parties, seven of its 12 members will have to approve a debt-cutting plan before it can be sent to Congress for votes. That means at least one lawmaker would have to agree to a plan backed by the opposite party.
Associated Press writers Susanne M. Schafer in Columbia, S.C., and Matt Gouras in Helena, Mont., contributed to this report.