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Congress’ Deficit Panel Talks Echo Fraught 1990 Budget Deal: News Analysis

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Democratic members of the Super Committee charged with proposing $1.5 trillion in deficit reduction before Thanksgiving say tax hikes must be on the agenda.

In an opening volley in the newly formed committee, Sens. Patty Murray, D-Wash.; Max Baucus, D-Mont.; and John Kerry, D-Mass., stake their territory in an opinion piece in Wednesday’s Wall Street Journal, arguing an early 1990s bipartisan deficit-cutting deal provides a precedent for today’s challenges.

“We know it may seem like the problems we face are intractable,” the senators wrote. “But we were around in the 1990s when Democrats and Republicans came together to balance the budget and put us on the path to eliminating our national debt … We did that by making tough choices and casting tough votes—including raising revenue.”

The Senate Democrats are apparently referring to the 1990 budget agreement, which came on the heels of what was then an unprecedented run-up of budget deficits during the Reagan years. Many of the circumstances were similar.

Under the then-governing Gramm-Rudman-Hollings Balanced Budget Act, failure to cut the deficit would have resulted in automatic cuts unpopular on both sides of the political aisle—similar to the sequestration mechanism in the current law that would force across-the-board cuts if agreement is not reached.

This poison-pill agreement would require that half the cuts come from defense and half from domestic spending (excluding Social Security and Medicare), making a failure to reach agreement nearly unimaginable.

Indeed, Defense Secretary Leon Panetta added his voice to the debate on Tuesday, speaking with students at National Defense University. Panetta urged the Super Committee to find cuts outside of an already wounded defense budget, which has seen reductions even as U.S. military commitments have increased in the past year. “We recognize that we’re in a resource limitation here, and that we’ve got to deal with those challenges,” he said. “But I don’t think you have to choose between our national security and fiscal responsibility.”

While Republicans are especially loathe to see further cuts in defense, all six members of the Republican Super Committee delegates are signatories to the Americans for Tax Reform’s no-new-taxes pledge. The anti-tax commitment has historical resonance.

The 1990 deficit reduction deal created a furor among Republicans angry that then President George H.W. Bush reneged on his famous 1988 campaign pledge: “Read my lips: no new taxes.” The 1990 budget deal only progressed toward resolution once Bush publicly agreed to tax increases, a move that may have doomed his re-election in 1992 despite his soaring popularity amid the first Gulf War.

Murray, Baucus and Kerry allude to these high stakes when they write of the 1990 deal: “Some of our colleagues lost their seats because of the decisions they made.”

The Super Committee delegates will doubtless continue to stake out their positions prior to Sept. 16, the date by which they are required to have their first meeting. Legislative committees and President Barack Obama have till mid-October to make their recommendations.

And the Super Committee has till Nov. 23, the day before Thanksgiving, to vote on its plan, which Congress must pass by Dec. 23, the Friday before Christmas, to avoid triggering $1.5 trillion in the cuts that most of Washington desperately wishes to avoid.


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