National debt looms large over Washington

The two houses of the 112^th Congress commence business today at noon and both veteran lawmakers and newcomers are going to find many important national issues on their collective plates - jobs and the economy, healthcare, last fiscal year's unattended budget, this fiscal year's developing budget, immigration, Afghanistan, Pakistan and energy, to name some of the bigger ones.

But a larger, more encompassing, more challenging and more threatening issue is looming up and looking right at Congress and the American people like, as former South Carolina Congressman Bob Inglis put it, a mountainside looks right at an approaching airplane. That issue is the mountainous national debt and the deficit spending that adds to it every year.

Lawmakers ignore this giant at their, and the nation's, peril, according to many economists and policy mavens, including Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

This is an issue that is not going to go away, she said. It will be difficult for the White House or the Congress to focus on anything else until they deal with this.

According to U.S. Treasury figures, as of Jan. 4, 2011, the national debt was over $14 trillion -- $14,005,153,386,222.39 to be precise, although it's grown since.

If you were thinking of helping out with a check, that sum breaks down to $45,208 per citizen.

Treasury predicted in June 2010 that the debt would rise to $19.6 trillion by 2015.

According to Treasury and the federal Office of Management and Budget, the national deficit for fiscal year 2010, which ended on Sept. 30, 2010, was $1.294 trillion. It is the second biggest deficit in the nation's history, topped only by 2009. The deficit currently eats up 8.9 percent of the Gross Domestic Product.

Early last year, President Obama appointed the 18-member bipartisan Commission on Fiscal Responsibility and Reform to study the problem and come up with recommendations for cutting the debt down to manageable size. The commission, which was co-chaired by former Clinton chief of staff Erskine Bowles and former Republican senator from Wyoming Alan Simpson, delivered its recommendations in December.

The commission's plan would trim the deficit to $382 billion by 2020 and balance the budget by 2037, with the subsequent yearly surpluses used to pay down the debt.

The plan would eliminate tax breaks, earmarks, farm subsidies and 200,000 federal jobs by 2020. It would freeze the defense budget, make cuts to Medicare and Medicaid and raise the Social Security retirement age.

As Simpson quipped, there was something in the plan for everyone to dislike.

Not everyone disliked it, but many did. Voices on the left objected to cuts to entitlement programs, while voices on the right decried eliminating tax breaks. The commission itself could not muster the supermajority approval of the plan needed (14 of 18 votes) to present it to Congress as an official proposal.

But the plan still exists and is already being used by a number of senators who are preparing ways to attack the problem.

Bowles said the plan, and the idea driving the plan, would remain useful despite its failure to immediately become a legislative bill.

He said the commission attained its goal of starting a sane conversation on the dangers of the debt.

MacGuineas, a supporter of the commission's plan, said it is there for lawmakers to use and build on, but how much energy they expend on it depends on the administration.

What is the White House going to do? There is only so much Congress can do, if the White House does not take the lead, she said.

MacGuineas said that Obama's State of the Union address, slated for Jan. 25, would be an excellent opportunity for the President to motivate the nation and, thereby, the Congress, to focus on the long-term problem of the debt and deficit.

He could refer to the debt commission's plan. He could do something like make this the year to tackle Social Security reform, she said. He needs to emphasize to the nation that the government is serious about taking this on. In that way, he could build enough momentum for real reform to start taking place. Presidential leadership is needed.

MacGuineas said that the Senate appears ready to tackle the issue, noting that Sens. Ron Wyden, D-OR, Bob Corker, R-TN, Saxby Chambliss, R-GA and Mark Warner, D-VA are already working in that direction.

Four of the senators who served on the commission, and who are still in office, are also focusing on fiscal responsibility, she said, referring to Sens. Dick Durbin, D-IL, Mike Crapo, R-ID, Tom Coburn, R-OK and Kent Conrad, D-ND.

This issue deserves consideration, Crapo said. Inaction is unacceptable.

But it's a different story in the House, MacGuineas said.

Five of the six Congress Members on the commission voted against its recommendations - Democratic Reps. Jan Schakowsky, IL and Xavier Becerra, CA, and Republican Reps. Jeb Hensarling, TX, Paul Ryan, WI and Dave Camp, MI.

Two of those Republicans will be committee chairs in 2011 - Ryan, of the Budget Committee, and Camp, of the Committee on Ways and Means. Hensarling will serve on the Budget Committee.

The three said they could not support the debt commission's recommendations because of proposed elimination of tax breaks.

MacGuineas noted that Republicans who control the House have a position of no new revenues through taxes, a position she believes is ultimately untenable. Senators, on the other hand, appear ready to compromise to make progress on the issue, she said.

Change is in the wind regarding this issue, MacGuineas said. The nation knows that hard choices have to be made to get the debt down. It is Washington that needs to get onboard. The questions are: will the White House take the lead, and will the Senate and House be able to compromise.