An Agreement on Reducing the Debt

Late this Saturday, President Obama issued a statement announcing his strong support for a deficit reduction commission, created by legislative statute, which would make recommendations on way for the United States to reduce the budget deficit and the national debt.

The issue is currently being debated in the Senate as part of a bill that will raise the national debt ceiling- the statutory cap to which the debt can reach. The current ceiling, set in December, is set to be reached by the middle of next month and Democrats are seeking to raise the limit until after the midterm elections in November. The Commission, supported by Sen. Judd Gregg and Sen. Kent Conrad, would report back to Congress early next year. It is unclear if the support the President announced today would extend to making the recommendations of the Commission binding on the Congress (i.e. subject to an up/down vote instead of just consideration).

It is also unclear if the Senate has the 60 votes that will be necessary to pass the Conrad/Gregg Amendment. If the Senate fails to act, the President's statement today indicates that he will authorize a commission by executive order.


That provision is subject to Constitutional interpretation. There are serious and legitimate concerns over an unelected "commission" essentially writing legislation for Congress to consider. No matter how well-intentioned, the issue is probably best left at making recommendations for the committees of jurisdiction to then consider. This issue will likely be sorted out in the coming weeks.

As the Obama Administration makes a clear pivot to jobs and the economy, deficit reduction is expected to be a key component of the 2010 legislative strategy and the President is expected to take about his proposals in his first State of the Union Address next week.

Below is the full text of the President's statement:


January 23, 2010

STATEMENT BY THE PRESIDENT ON A STATUTORY FISCAL COMMISSION

The serious fiscal situation that our country faces reflects not only the severe economic downturn we inherited, but also years of failing to pay for new policies—including a new entitlement program and large tax cuts that most benefited the well-off and well-connected. The result was that the surpluses projected at the beginning of the last administration were transformed into trillions of dollars in deficits that threaten future job creation and economic growth.

These deficits did not happen overnight, and they won't be solved overnight. We not only need to change how we pay for policies, but we also need to change how Washington works. The only way to solve our long-term fiscal challenge is to solve it together – Democrats and Republicans.

That's why I strongly support legislation currently under consideration to create a bipartisan, fiscal commission to come up with a set of solutions to tackle our nation's fiscal challenges – and call on Senators from both parties to vote for the creation of a statutory, bipartisan fiscal commission.

With tough choices made together, a commitment to pay for what we spend, and responsible stewardship of our economy, we will be able to lay the foundation for sustainable job creation and economic growth while restoring fiscal sustainability to our nation.

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UPDATE: Here is a statement released by House Majority Leader Steny Hoyer:

Hoyer Statement on President's Support for a Statutory Fiscal Commission and PAYGO

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WASHINGTON, DC - House Majority Leader Steny H. Hoyer (MD) released the following statement today after President Obama announced his support for the creation of a statutory fiscal commission:

"I appreciate President Obama's announcement today reiterating his support for statutory paygo and affirming support for a fiscal commission.

"This announcement should eliminate any questions about the President's commitment to creating an effective fiscal commission to deal with our fiscal challenges. It is now up to Republicans to follow his lead by supporting the Conrad-Gregg proposal and, if it fails, working with the President to make a commission created by executive order a success.

"As we work to bring down the deficits created by their reckless policies during eight years in office, I hope Republicans see this as an opportunity to work together to tackle our nation's fiscal challenges."