Doug Elmendorf, director of the Congressional Budget Office, testifies before the Joint Select Committee on Deficit Reduction on Oct. 26. (Colin Kelly / Staff)
If a $1.2 trillion deficit-cutting deal is not reached and approved by Congress this year, automatic cuts would lead to significant cuts in discretionary spending, according to a new estimate by the Congressional Budget Office.
CBO predicts that defense-related appropriations, not counting overseas contingencies, would be $110 billion — or 16 percent — lower by 2021 than if current spending simply tracked with inflation.
For non-defense appropriations, the figure would be $99 billion — or 15 percent — lower by then.
Overall, discretionary spending would account for 71 percent of the net savings generated by automatic budget cuts that would begin in 2013 if at least $1.2 trillion in deficit reduction is not enacted by Jan. 15
CBO Director Douglas Elmendorf outlined his projection during a Wednesday hearing of the Joint Select Committee on Deficit Reduction, also known as the super committee.
"I think people got a good understanding of what it would mean if the sword of Damocles came down," one committee member, Rep. Chris Van Hollen, D-Md., said afterward.
Under the debt ceiling legislation signed in August, the 12-member House-Senate panel is charged with coming up with a deficit-cutting roadmap by Nov. 23.
Members of the congressional supercommittee sparred Wednesday over big-picture options for reducing the federal budget deficit.
The panel has gotten thousands of budget-cutting ideas from other lawmakers and members of the public, but there was little discussion of specific proposals during the hearing, which lasted barely 90 minutes and was twice interrupted by protesters.
Democrats, such as Sen. John Kerry of Massachusetts, argued that new tax revenue should be part of any significant debt reduction package, while Sen. Rob Portman, R-Ohio, said that lawmakers also need to tackle mandatory spending, which is driven by funding for Medicare and other entitlement programs.
Another hearing of the supercommittee is set for Nov. 1, when members will get an overview of past attempts to bring federal deficits under control.
Both of the committee's co-chairs, Sen. Patty Murray, D-Wash., and Rep. Jeb Hensarling, R-Texas, left Wednesday's session without taking questions from reporters. Earlier, however, Murray said that the panel has been "working very hard" to find common ground.
"We aren't there yet," Murray said, "but I am confident that we are making progress."
Meanwhile, the Washington Post reported Wednesday that one panel member, Sen. Max Baucus, D-Mont., urged his colleagues during a closed-door meeting to aim for $3 trillion in deficit reduction over 10 years, largely through deep cuts in federal health programs. Baucus' proposal includes a call for tax increases, something Republicans quickly opposed, the Post reported.
Also, Politico has reported that a bipartisan group of dozens of House lawmakers plans to press the super committee to aim for $4 trillion in deficit reduction. The newspaper said the group is urging in a draft letter that tax increases not be removed as an option.