Pelosi’s selections complete key debt panel

Some try to figure chance of success

By Robert Pear and Jennifer Steinhauer
New York Times / August 12, 2011

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WASHINGTON - The House Democratic leader, Nancy Pelosi, rounded out the membership of a powerful new deficit-reduction panel yesterday by appointing three of her top lieutenants who have led opposition to cuts in Social Security, Medicare, and Medicaid.

The new appointees are Xavier Becerra of California, the vice chairman of the House Democratic Caucus; James E. Clyburn of South Carolina, the assistant House Democratic leader; and Chris Van Hollen of Maryland, the senior Democrat on the House Budget Committee.

In announcing her choices, Pelosi said the new panel, the Joint Select Committee on Deficit Reduction, must find ways to stimulate economic growth and create jobs.

Van Hollen articulated the Democrats’ theme: “Putting America back to work is the best and most immediate way to reduce our deficit.’’

Within hours of the announcement, the Investment Company Institute, a trade association for mutual funds, sent out invitations to a fundraiser for Becerra prominently citing his role on the panel.

“This will be Mr. Becerra’s first event since being named’’ to the panel and “could give all attendees a glimpse into what will most assuredly be the primary topic of discussion between now and the end of the year,’’ said invitations to the Aug. 31 event, sent by James R. Hart, a lobbyist for the institute. The suggested contribution is $1,500 a person.

Ianthe Zabel, a spokeswoman for the institute, said the group “takes full responsibility for the language in the outgoing email and the decision to send it out Thursday afternoon.’’

The invitations illustrate the lobbying frenzy touched off by the new panel, which will have wide latitude to propose changes in tax policy and spending, including entitlement programs and the Pentagon budget. A bill written by the panel would not be open to amendment and would go onto a fast track intended to guarantee that both houses of Congress vote on it by Dec. 23.

With the 12 panel members now named, lawmakers and lobbyists were trying to calculate its chances for success.

The panel members are all team players. They represent their caucuses and the congressional leaders who appointed them. Prospects for a deal thus depend on the leadership of both parties.

Senator Jon Kyl, an Arizona Republican, is loyal to Senate Republican leader Mitch McConnell of Kentucky and is unlikely to agree to any compromise that would displease him.

A cochairwoman of the panel, Senator Patty Murray of Washington, is a member of the Senate Democratic leadership team and is likely to discourage freelancing by other Democrats on the panel.

Some panel members, such as Becerra and the GOP cochairman, Representative Jeb Hensarling of Texas, have over the years repeatedly highlighted differences between the parties on the issues that will preoccupy the committee for the next 15 weeks.

If a majority of the panel reaches agreement, lawmakers said, it is likely to grow out of a consensus fostered by a handful of potential dealmakers such as Senators John Kerry, a Massachusetts Democrat, and Republican Rob Portman of Ohio.

Two other panel members who lead the tax-writing committees of Congress could nudge the group toward a deal that raises revenue without raising tax rates. Democratic Senator Max Baucus of Montana, chairman of the Finance Committee, and Representative Dave Camp of Michigan, a Republican who chairs the Ways and Means Committee, have held many hearings on proposals to overhaul the tax code.

Camp said yesterday that he would not rule out tax changes that generate additional revenue as a result of economic growth.

“I don’t want to rule anything in or out,’’ Camp said in an interview. “I am willing to discuss all issues that might help us reduce our short- and long-term debt and grow our economy. Everything is on the table, until we as a group rule it out.’’

“Economic growth and job creation in the private sector - that’s what we need to use as a benchmark about any policy, but particularly tax policy,’’ he said.

President Obama and Democratic leaders in Congress say additional revenue must be part of any deficit-reduction deal. Republicans have adamantly opposed tax increases.

The economic slump in the US and the debt crisis in Europe could jolt some panel members out of entrenched positions. Pressure for a deal may also come from investors and credit rating agencies such as Standard & Poor’s, which cited “political risks’’ and the rising debt burden in the US when it lowered its rating of long-term Treasury securities last week.

The new deficit-reduction law could also prompt panel members to seek a deal because if they fail to agree, spending would be cut across the board.