Deficit Commission Ideas Could See Life Even as GOPer Blames Health Care for Impasse

The deficit commission's plan to cut America's debt failed to get a supermajority vote because it did not address the root cause of America's "fiscal insanity" -- health care -- a House Republican lawmaker who served on the panel said Sunday.

Rep. Jeb Hensarling, R-Texas, who was one of three House Republican commission members to oppose the plan, told "Fox News Sunday" that he could still support many of the panel's recommendations, but the overall plan was irrevocably flawed.

"Although this plan of the commission does many great things with respect to trying to flatten the tax code, save Social Security for the next couple of generations, its fatal flaw is its failure to deal with the single largest driver of fiscal insanity, and that is our health care program," Hensarling said.

"And so until we change the architecture of the health care plan that was recently passed by Congress and reform Medicare for future generations, grandfathering all the grandparents, you just don't get there from here. I don't see any road to fiscal sanity without doing that," he added.

Hensarling, the new House Republican Conference chairman, the No. 4 position in the incoming majority next term, joined Reps. Paul Ryan of Wisconsin and Mike Camp of Michigan, in voting against the recommendations Friday in a vote that required 14 of 18 commission members to approve forwarding the package to Congress. Had it passed, it would  have forced an up-or-down vote in Congress this month to cut spending.

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The recommendations received 11 votes. Three Democratic lawmakers, Reps. Jan Schakowsky of Illinois, Xavier Becerra of California and Sen. Max Baucus of Montana also opposed the plan as did Andy Stern, former head of the Service Employees International Union and one of President Obama's appointees to the group.

The sweeping proposal put forth by the panel called for cutting $4 trillion from the budget over the next decade through 59 proposals broken down in six areas from tax and Social Security reforms to freezing discretionary spending and altering health care policy.

In its report, the panel warned that the Congressional Budget Office projects "federal health care spending for Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and the health insurance exchange subsidies will grow from nearly 6 percent of GDP in 2010 to about 10 percent in 2035."

It recommended the government come up with a "federal budgetary commitment" to health care and reform the structural nature of the system to prevent the percentages from growing.

But Hensarling said the commission's estimates -- based on assumptions found in the new health care law that was opposed by all Republicans -- were too optimistic. Other estimates show that the cost of maintaining the president's health care law is $2 trillion over 10 years, which would have to be paid for by raising taxes.

"The deficit is the symptom. Spending is the disease," he said. "There's a number of elements about this plan that I liked. But at the end of the day it still, unfortunately, represents a roughly $2 trillion tax increase on the American people and does not fundamentally address the key driver of our national fiscal crisis, and that is health care."

Sen. Kent Conrad, D-N.D., another member of the panel who voted for the plan, said he disagreed with Hensarling's claim, arguing that the health care law will reduce the debt by $1 trillion over 20 years. He said the deficit panel's plan went even further to slashing spending.

"This proposal from the commission does more. First of all, it deals with the most important thing most economists tell us, which is to change the tax treatment of health care, phasing out the deductions ... the tax exemptions," he said.

Conrad, who appeared with Hensarling on "Fox News Sunday," said changing the tax structure as the commission recommended would resolve many of the concerns raised about the government footing the bill on health care because it would have dropped down the debt in other areas.

The plan "cuts spending $1.5 trillion over the next 10 years. It has dramatic interest savings. It puts Social Security on a solvent course for the next 75 years," Conrad said. It would have revamped the entire tax system, "including lowering the top corporate rate from 35 percent to 28 percent, which most economists say would help us be more competitive and would help us create more jobs."

Regardless of the failure of the debt panel, both lawmakers agreed that with the government borrowing 40 cents of every dollar it spends, Congress can act on the deficit panel's recommendations even without the panel's blessing.

"There's nothing magical about 14 votes. If the speaker and the Senate majority leader want to bring this provision before the Congress, they can," said Hensarling, endorsing Conrad's idea for a summit with Obama and House and Senate party leaders.