Supercommittee wrestles with budget cuts

By Robert Schroeder, MarketWatch

With only about a month remaining before its recommendations are due, lawmakers on the congressional supercommittee charged with finding savings from the federal budget wrestled with cuts to defense, foreign aid and other programs on Wednesday.

At its fourth public meeting, the 12-member panel heard testimony from Congressional Budget Office director Douglas Elmendorf and debated discretionary spending, which includes defense and education and excludes mandatory outlays for Medicare and other programs.

Democrats including Sen. Patty Murray of Washington, one of the panel’s co-chairs, argue that discretionary spending has suffered under deficit-cutting efforts and suggested it be protected. She said it’s less than a fifth of total federal spending but “you would think this small piece of the pie was a whole lot bigger.”

Republicans, meanwhile, are pressing for cuts to discretionary and other spending. Co-chair Rep. Jeb Hensarling, a Texas Republican, said cuts to discretionary spending would be “helpful” but argued for money-saving entitlement changes.

He added that he sees “some common ground” with Murray.

The committee is charged with finding at least $1.2 trillion in savings by Nov. 23. If members fail to agree, cuts of that same amount would kick in across the board.

Elmendorf noted that lawmakers have already taken “significant steps” to rein in discretionary spending. Total discretionary funding, he said in testimony, was the lowest in 2011 as a share of GDP since 2002. 

Recommendations have flooded into the supercommittee, including from the defense industry, oil and gas interests and other industries and interest groups. On Tuesday, a defense industry-backed analysis showed that more than 1 million U.S. jobs could be destroyed by cuts to the defense budget if the supercommittee doesn’t meet its target and automatic cuts kick in. Read more on Political Watch blog.

Murray sought to assure skeptics that the group can agree before its deadline.

“We aren’t there yet, but I am confident we are making progress,” she said.

The committee’s hearing was briefly disrupted by a protestor, who walked up to Elmendorf, stood beside him, and addressed committee members. She was removed by U.S. Capitol police.