Jacob Lew responded Thursday to a report that some senators are working on legislation that would trigger tax hikes and spending cuts if Congress fails to live within spending targets.
At a Monitor-sponsored lunch with reporters on Thursday, the director of the Office of Management and Budget was asked about the lead story in Thursday’s Wall Street Journal. According to that report, a bipartisan group of senators is working on legislation that would trigger automatic tax hikes and spending cuts if Congress fails to live within mandatory spending targets.
“It is an important thing that there are conversations like that going on,” Mr. Lew said.
His remarks about the senatorial talks were cautious in tone. "It is very early in the process.... We need to watch where their conversations go,” Lew said.
He also noted, “We talk all the time to a lot of members of Congress. I don’t want to overstate the degree of our involvement. But obviously we do have interactions."
President Obama has stressed that bipartisan action will be needed to deal with America’s rising debt levels and interest costs. According to the Journal story, senators working on the plan include Democrats Richard Durbin of Illinois, Kent Conrad of North Dakota, and Mark Warner of Virginia. Republicans involved in the process are Tom Coburn of Oklahoma, Michael Crapo of Idaho, and Saxby Chambliss of Georgia.
The legislators are said to be considering rewriting the tax code to eliminate loopholes and thus lower tax rates, an idea raised by the National Commission on Fiscal Responsibility and Reform headed by Erskine Bowles and Alan Simpson. The senators are also apparently discussing caps on defense and nondefense spending and changes to entitlements like Medicare, Medicaid, and Social Security.