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Thursday, September 22, 2011 - 10:46

US Deficit Panel Chiefs Show Key Differences Remain on Budget

--Republican Co-Chair Hensarling Says Panel Must Focus on Spend Cuts
--Rep. Hensarling: 'Primary Focus' Must Be To Reform Safety Net Programs
--Democratic Co-Chair Murray Says Panel Must Find 'Balanced' Approach
--Sen. Murray: Must Address 'Both Spending and Revenues'

WASHINGTON (MNI) - It took less than fifteen minutes of opening statements in Thursday's meeting of Congress's Joint Select Committee on Deficit Reduction to underscore that the two leaders of the panel perceive their job in fundamentally different ways.

In his opening statement, Republican congressman Jeb Hensarling, the GOP co-chairman, said that achieving substantial deficit reduction can only occur by a vigorous, relentless bid to control federal spending.

The "primary focus" of deficit reduction efforts, Hensarling said, must be to overhaul the nation's costly safety net programs such as Social Security, Medicare and Medicaid.

He said that any effort that focuses heavily on raising taxes would hurt the economy and fail to control the deficit.

In her opening statement, Democratic senator Patty Murray said the only way serious deficit reduction can occur is to develop a "truly balanced approach."

She said that this summer's debt ceiling agreement focused exclusively on spending cuts. Further deficit reduction, she said, must blend spending cuts and additional revenues.

"We have to address both spending and revenues," Murray said.

The Joint Select Committee on Deficit Reduction met for a private session Tuesday and is now holding its third public hearing Thursday on revenue issues.

In its first two public sessions it has become clear that the panel is divided on whether the focus of deficit reduction efforts should be on spending cuts or a package that includes both spending cuts and additional revenues. Republicans prefer the former, Democrats the latter.

The committee also appears conflicted on the scope of its goals, with some members urging the panel to secure about $4 trillion in budget savings while others want it to be focus on the panel's statutory goal of finding $1.5 trillion in savings.

The Joint Select Committee on Deficit Reduction is charged to submit a report to Congress by Nov. 23, 2011 that reduces the deficit by $1.5 trillion between 2012 and 2021.

The final package, if one is agreed to by the majority of the panel's 12 members, must be voted on without amendment by the House and Senate by Dec. 23, 2011.

If the panel fails to agree on a spending cut package or Congress rejects its plan, a budget enforcement trigger would secure $1.2 trillion in budget savings through across-the-board cuts.

The cuts would be equally divided between defense and non-defense programs but would exempt Social Security, Medicaid and low-income programs.

** Market News International Washington Bureau: (202) 371-2121 **

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