Obama's and Dems Reported to Reach Agreement on Austerity Commission

On the eve of the scheduled debate on raising the debt limit in the Senate, various media report that an agreement was reached Tuesday night between the White House and senior Congressional leaders, under which Obama would create a budget-slashing debt commission by executive order, and the Senate would adopt a pay-as-you-go scheme such as the House adopted last summer. This is tied to Obama's planned call for a spending freeze in the Jan. 27 State of the Union address.

Sen. Kent Conrad and a group of about 30 Democrats and Republicans (including Judd Gregg) are arguing for a Peter Peterson-type debt commission which would make recommendations for slashing spending — particularly Medicare, Medicaid, and Social Security — which Congress could not modify, but only vote up or down. But there is sufficient Senate opposition so that this group lacks the votes to get their scheme passed, and there is also significant opposition in the House.

To get around the opposition, Obama will create a commission by executive order, and Congress would agree to allow the commission's proposals to come up for votes in the House and Senate, if 14 of the commission's 18 members agree to its slash-and-burn proposals.

Debate on the debt limit and the Gregg-Conrad proposal began late Wednesday afternoon in the Senate, and at the end of the day it was announced that votes will take place on Thursday.

During Wednesday's debate, both Gregg and his ally John Thune (R-SD) praised the European Union's (Maastricht) restrictions on the ratio of the deficit to GDP (3%) and debt to GDP (60%), and urged that the United States should adhere to these limitations — and give up its national sovereignty to the monetarist central-banking system in the process!

Max Baucus, who opposes the Gregg-Conrad amendment, but is part of the White House agreement, read statements from AARP and other groups — both "progressive" and "conservative" — in opposition to the Gregg-Conrad plan.

Nonetheless, David Walker, the head of the Peter G. Peterson Foundation, who has been ceaselessly campaigning for a commission which would by-pass "regular order" — i.e., the U.S. Constitution — lauded the White House "compromise" agreement, and lied that: "The announcement of an agreement to create a presidentially appointed fiscal commission that will report to the Congress and be assured a vote on its recommendations, is a major step toward putting our nation's financial house in order while protecting our social safety net programs."