SC’s Graham, Clyburn on panel seeking budget, deficit deal

jself@thestate.comOctober 29, 2013 

Budget Battle

Sen. Lindsey Graham, R-S.C., speaks with reporters on Capitol Hill, Wednesday, Oct. 16, 2013, in Washington. Time is growing short for Congress to prevent a threatened Treasury default and stop a partial government shutdown. (AP Photo/Carolyn Kaster)

CAROLYN KASTER — Associated Press

  • The next debate A 29-member bipartisan panel of U.S. House and Senate members – including U.S. Sen. Lindsey Graham, R-Seneca, and U.S. Rep. Jim Clyburn, D-Columbia, assistant Democratic leader in the House – was formed following the deal that ended the 16-day partial federal government shutdown. The group, which starts its work Wednesday, is charged with working out budget and deficit-reduction plans.

    •  The panel has until Dec. 13 to produce a long-term plan to pay for the government’s operations and reduce deficits.

    •  To avoid another shutdown, Congress must reach an agreement by Jan. 15, when government appropriations run out.

    •  Congress also has suspended the debt limit until Feb. 7, setting up another possible deadline confrontation.

South Carolina’s two ranking members in Congress – U.S. Rep. James Clyburn, D-Columbia, and U.S. Sen. Lindsey Graham, R-Seneca – share some ideas for cutting spending and reducing the nation’s $17 trillion debt.

Both, for instance, say they favor making it easier for companies to bring into the United States profits now held overseas. Both want to improve the country’s infrastructure and favor replacing across-the-board sequestration budget cuts. They might even be able to agree on increasing the retirement age.

But the differences between the two – both on a 29-member congressional committee that starts work Wednesday, charged with drafting a budget and deficit-reduction plan by Dec. 13 – show just how big a challenge members of Congress will face in reaching a consensus.

“I don’t mind meeting people more than halfway. But I don’t think it’s more than halfway when the attitude of the other side is: ‘It’s my way or the highway,’ ” Clyburn said. He added that there will be no deal if that attitude – which many Republicans use to describe Democrats, too – persists.

“We need presidential leadership,” Republican Graham said. “The president was AWOL (during the government shutdown negotiations). He needs to sit down with the leaders of the House and the Senate and agree on a number and say, ‘We’re going to fund the government through next September.’ ”

Some see little chance for a “grand bargain” to address long-term budget and debt issues, like the one that President Barack Obama and House Speaker John Boehner, R-Ohio, tried and failed to reach in 2011.

Mistrust and ideological differences between the two political parties will make consensus a challenge, said Jordan Ragusa, a College of Charleston political science professor. “How do you create a compromise when both sides want very different things?”

The latest attempt at collaboration comes on the heels of a 16-day partial federal government shutdown after a standoff between congressional Republicans and Obama over the Affordable Care Act. The health reform law’s insurance exchanges launched Oct. 1 with widespread technical woes. Obama refused to negotiate on GOP demands to tie defunding or delaying his signature legislation to a plan to pay for government and temporarily raise the nation’s borrowing limit.

Amid intensifying public disapproval of the shutdown, Republicans agreed to continue funding the government at current levels – including the across-the-board cuts known as the sequester – in exchange for income verification for consumers who seek health insurance subsidies through the new exchanges.

Seven of the nine members of South Carolina’s congressional delegation – all except Graham and Clyburn – voted against the deal that reopened the government.

Graham has criticized the Republican strategy that contributed to the shutdown. He says it was ill-conceived to think Obama would agree to defund the legislation creating health care reform, also called Obamacare.

But Graham said he is confident the bipartisan congressional committee will find a way to fund the government through the end of the federal fiscal year, next Sept. 30. However, Graham said the debate over whether to raise the nation’s borrowing limit – a debate Congress put off until Feb. 7 – is “going to be the hard one.”

“I’m not going to vote for a long-term debt-ceiling increase until we address why we’re in debt, and that’s entitlement reform,” he said.

Differing opinions on where to cut

In separate interviews with The State newspaper last week, Graham and Clyburn agreed on some points they plan to take to the congressional committee.

For instance, both said the nation needs to find a way to bring back into the country profits that corporations “park” overseas to avoid paying taxes. Lowering the tax rate companies pay when bringing money back into the United States would encourage them to reinvest in operations here, creating jobs.

Graham and Clyburn both said any deal Congress approves must include a plan for improving roads, bridges and other infrastructure that companies depend on to operate.

They also agree that the automatic, across-the-board sequestration budget cuts, designed to cut $1.2 trillion in federal spending over a decade, must be replaced with more reasonable, sensible cuts.

But to replace the sequestration cuts, lawmakers must agree on offsetting budget cuts elsewhere. That challenge may prove difficult, considering the sequestration cuts were triggered by a similar panel’s inability to reach an agreement in 2011.

“Those of us who served (on the panel) sat down and tried to find common ground, and we were not successful,” said Clyburn, who was on the 2011 committee.

Graham said “entitlement reform” must accompany any deal. He supports an Obama deficit-reduction panel’s recommendation to change the way that inflation impacts government benefits. That move, ultimately, would result in reduced government payouts, which has been unpopular among congressional Democrats. That change could produce enough savings to replace the sequestration cuts, Graham said.

“If we could make some small entitlement changes ... like (Obama) proposed, and we did some things to flatten out the tax code to generate some savings, I think we have the making of a small deal that over time would really benefit the country,” he said.

Graham also would support “means testing” the benefits the government pays the wealthy, reducing payouts to high-income Social Security and Medicare recipients, and raising the retirement age.

Clyburn says he could support a higher retirement age for some workers but not all.

For example, he said a higher retirement age unfairly would burden industrial workers who do strenuous physical work. “Why is it fair to say to a coal miner that you have the same retirement age as this banker?” Clyburn asked.

Clyburn also would like to increase the cap on income that is taxed for Social Security. Currently, a taxpayer pays Social Security tax on roughly the first $110,000 earned. Clyburn would hike that to $200,000, increasing the taxes flowing into the Social Security system.

Graham said raising the caps would work only if Congress caps benefits to curb rising costs.

Raising taxes, cutting ‘entitlements’

Efforts to raise tax revenues through tax increases or closing existing tax loopholes also will be controversial.

Though unpopular among some Republicans, limiting tax deductions would generate a trillion dollars for the treasury, money currently being “given away through deductions in the tax code,” Graham said.

Graham – whose three opponents in June’s GOP primary are likely to seize on any effort he makes to reach a deal with Democrats – said he is open to compromise if Democrats will bend on Medicare and Social Security reforms.

However, Clyburn is not confident that Republicans who talk about closing loopholes, which allow companies to avoid paying income taxes, actually will vote to do so. Closing loopholes is “tantamount to raising taxes” in the eyes of Republicans, he said.

He also is wary that reforms will center too much on cutting “entitlements” – a description of Social Security and Medicare that Clyburn rejects as misleading because workers have paid into the programs so they can receive benefits later.

“We do need to have discussions and figure out how best to resolve issues,” he said. “But for us to say we cannot have deficit reduction unless all of the deficit reduction comes out of the hide of poor people and seniors living on a fixed income, that is just not going to happen.”

Reach Self at (803) 771-8658.

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