Nov. 09--With perhaps decades of annual federal deficits still projected, U.S. Sen. Bob Casey sounded confident Thursday that Congress can adopt a major budget deal next year to sharply cut the red ink.
The "grand bargain" quietly under discussion by members of Congress would cut deficits by $4 trillion to $5 trillion over the next decade, enough to signal to financial markets that the nation's governing body has its act together and spur growth, Casey said during an interview Thursday at his downtown Scranton Senate office.
"I'm not as worried about the road or the duration that we have to travel. We just have to get an agreement in place," said Casey, the chairman of Congress'Joint Economic Committee.
Fresh off Casey's re-election Tuesday, the interview centered on the upcoming "fiscal cliff" and negotiating an even bigger deficit-reduction deal in 2013.
The "fiscal cliff" is the name given to the economic damage that most economists believe would follow if Congress allows automatic spending cuts of $1.2 trillion and the expiration of the tax cuts adopted under President George W. Bush to go ahead Jan. 1.
Casey said once the "grand bargain" agreement is done, the economy will rebound further and produce even more revenue to cut into future deficits as investors and business owners gain confidence that federal tax rates and finances will stabilize.
"Priority No. 1 is to get the economy moving faster," he said. "That's central to it."
Proposed higher taxes on the wealthy must be part of eliminating deficits, he said.
"If you get an agreement on upper-income tax rates and derive some revenue from that, that's a part of it," he said. "The other part of it is substantial tax reform. Everyone agrees on that. The disagreement is how to do it and where to do it. But there's broad agreement on the need for tax reform. No one disputes that the corporate (income tax) rate is probably too high. The question is how low do you bring that down."
With tax reform, higher taxes on the wealthy, more spending cuts and "efficiencies" in government, "you can develop a broad and balanced plan that has --at least the beginnings of enough revenue and enough cost reduction," he said. "It's hard, it's going to be difficult to get people to work together, but I do think there are enough people in both parties that understand the gravity of the problem and have enough of a sense of urgency."
The overall federal debt is more than $16 trillion with annual deficits running more than $1 trillion the last four years.
Under a plan proposed by House Budget Committee Chairman Paul Ryan and considered harsh by Democrats, federal deficits will not disappear until 2040. Though Ryan's budget contains a controversial plan to reign in skyrocketing Medicare costs, it does not directly address a shortfall in Social Security revenues.
Based on current estimates, Medicare will only be able to pay 87 percent of benefits starting after 2024 and Social Security only 75 percent of benefits after 2033 if nothing is done to improve their standing.
None of the deficit-reduction discussion so far appears focused on dealing with either problem.
Casey said he expects the new health care reform law to save Medicare money because it will encourage best practices among medical practitioners. He said a stronger economy would produce more payroll tax revenues for Social Security.
Casey said he did not "read too much" into a statement Wednesday by Republican House Speaker John Boehner, who said raising taxes would be unacceptable in the upcoming negotiations. He suggested the remark might be a tactic.
"Sometimes you have leaders that are saying things for positioning that may not reflect where they'll end up when they have to get in a room and have to negotiate something weeks from now," he said.
His hopes are higher for negotiations because the election campaign's end removes a major reason for partisanship and members understand the seriousness of the deficit problems.
"We were on the road in August, on the road for part of September and on the road for October, and I don't care who you are, Democrat or Republican, House or Senate, you heard from people on the street about how much they want people working together," he said. "People don't appreciate folks that are just constantly going to be taking partisan positions."
Casey said members of Congress should not believe the public is happy with their work just because President Barack Obama was re-elected, Republicans maintained control of the House and Democrats of the Senate.
"If that's what someone thinks the message was, they better go back and listen a little more carefully," he said. "I heard it everywhere. Even people that sometimes are very partisan themselves and want you --to maybe be more partisan, even those folks are saying, 'Come on, you guys have got to get something done.'"
Promises of more bipartisanship happen after every election, but Casey said he is optimistic about compromise by both sides because Congress came to a deal to extend tax cuts at the end of 2010, though members on both sides were unhappy with aspects of it.
As for his Senate future, Casey said next year he will have to give up the Joint Economic Committee chairmanship, which rotates every two years between the House and Senate, though he hopes to remain on the committee.
He thinks there's a "50-50 chance" that his committee assignments will change because of retirements and the election of two more Democratic senators.
Casey is a member of the Foreign Relations Committee and chairman of its Subcommittee on Near Eastern and South and Central Asian Affairs; a member of the Agriculture, Nutrition and Forestry Committee and chairman of its Subcommittee on Nutrition Specialty Crops, Food and Agricultural Research; and a member of the Health, Education, Labor and Pensions Committee and the Special Committee on Aging.
Casey said he hopes to remain on Foreign Relations. If opportunities arise to move to more significant committees such as Appropriations, "I'd certainly pursue them," he said.
Though his name has been bandied about occasionally as a possibility, Casey sounded uninterested in running for governor in 2014, even though he did not say no when asked.
"I'm real happy where I am," he said. "I just am real lucky to be where I am. Do you realize how hard these campaigns are? --I'm really happy and fortunate."
(c)2012 The Citizens' Voice (Wilkes-Barre, Pa.)
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