What Are the Odds? Deficit Panel Proposals Face Uphill Climb in Congress - Fox News

The co-chairmen of the president's deficit commission are urging politicians not to "wimp out" as they roll out dozens of recommendations aimed at slicing trillions from the long-term deficit and stabilizing the national debt. 

But with a herd of sacred cows being brought out for slaughter, interest groups for months have lined up to decry parts of the plan. A vote is set for Friday and there are already doubts that the document can win the 14-vote supermajority on the 18-member panel it needs to advance to Congress in one piece. 

That leaves the question of what, if any, proposals and ideas lawmakers might draw from in the next Congress, where incoming Republicans are vowing to focus on fiscal discipline. Sen. Kent Conrad, D-N.D., said Wednesday that even if the report does not clear the commission, chaired by Erskine Bowles and former Sen. Alan Simpson, the panel has "moved the ball forward" -- the Budget Committee chairman suggested he would advance some kind of budget-tightening proposal next year. 

FoxNews.com takes a look at some of the key, and in many cases controversial, proposals contained in the 59-page report, and the chances they have at coming up for a vote in some form next year. 

Discretionary Spending Freeze -- Good Chance 

Given that lawmakers on both sides of the aisle have talked about imposing some kind of freeze or limit on discretionary spending, it would seem likely that the commission's call for a federal spending reality check would find friends in Congress. 

The commission's recommendation is more severe than others on the table, calling for a spending freeze in 2012, pre-2008 crisis levels in 2013 and subsequently a cap on growth to half of inflation all the way through 2020. That's about 17 percent less than what President Obama has requested. 

Maybe that goes too far for some members. The Center on Budget and Policy Priorities argues that limits of that magnitude would significantly impair the government's ability to function. But Obama, as a starting point, has already called for a three-year freeze on nonsecurity discretionary spending. Republicans want discretionary limits and so do Blue Dog Democrats, who said in a statement Wednesday that "elements" of the commission proposal "deserve real consideration." 

That makes a vote in the House, to be led next year by Republican Speaker-Designate John Boehner, more likely than in the Senate. Rep. Paul Ryan, R-Wis., who is poised to take over the House Budget Committee, praised the spending limits on Wednesday as "pretty good." 

Cap on War Spending -- Low Chance 

Though calls for discretionary spending cuts often ignore the Defense Department, the commission report calls for requiring the president to proposal an annual limit for war spending. 

This proposal would break out the so-called "Overseas Contingency Operations" for the current wars into a separate category with a limit of its own, as well as impose a "general security spending cap." 

But with new security threats emerging out of Iran, North Korea and terror cells around the world -- and dozens of Republicans soon entering the House - the current budget-tightening led by Defense Secretary Robert Gates might be all lawmakers can stand. 

"I don't know how you do that, and I can't imagine Republicans agreeing to that," said Michael Tanner, senior fellow with the Cato Institute, when asked about the war spending cap. 

Federal Pay Freeze -- Good Chance 

Obama cleared the way for this kind of proposal on Monday when he called for a two-year freeze on federal civilian pay. Though it earned him a backlash from unions and Democratic lawmakers who represent districts heavy with federal workers, the commission gives him some backup. The report goes further, calling for a three-year pay freeze for federal workers as well as a three-year pay freeze for members of Congress. 

It's unclear whether legislation will fall somewhere in the middle, but Republicans have already indicated they'll back the president on a federal freeze. 

Change to Mortgage Interest Deduction -- Low Chance 

The commission proposes a host of changes to the tax system, some of which might find their way into proposals next year. 

But one item that probably won't be in any bill, Tanner said, is a cut to the mortgage deduction. 

"You're talking about something that's really sacrosanct," he said. "It might be dumb economics but ..." 

Tanner said the mortgage issue would make a great "30-second attack ad" against anyone who votes for it. He predicted the commission's tax proposal as a whole would fade as lawmakers continue to push their own ideas for tax reform. 

The interest deduction provides a big incentive, built into the U.S. tax code, for Americans to buy property. The proposal does not eliminate it, but caps the applicable mortgage at $500,000 as opposed to $1 million and only applies it to primary residences. 

The proposal includes several other tax changes, including a call to cut and simplify income tax rates. 

Gas Tax Hike -- No Chance 

At a time when Washington is in lockstep agreement about the need to shield the middle class from a tax increase, the idea of raising the gas tax is a tough sell. 

The commission, calling for Congress to fully fund the Transportation Trust Fund, recommends bumping up the federal gas tax by 15 cents per gallon between 2013 and 2015. 

Ron Haskins, a senior fellow with the Brookings Institution, gave the idea a precisely "zero percent" chance of passing. 

"Anything that's a new tax or a big expansion of an old tax ... I think has a very low probability," he said. 

Social Security Overhaul -- Low Chance 

They don't call it the third rail for nothin'. Though the commission calls for Social Security changes merely to make the system solvent, not reduce the deficit, interest groups have raised alarm for months about the possibility of beneficiaries taking a hit. Liberal advocacy group Demos swiftly issued a statement Wednesday morning saying the plan "slashes Social Security at a time when fewer Americans can count on a secure retirement." 

Under the plan, the retirement age would gradually increase to 68 by 2050 and 69 by 2075. The benefit formula would change, cost-of-living adjustments would not be as large and the cap on income taxed for the program would rise. 

Haskins called the proposals "totally reasonable" and said lawmakers could very well introduce some of the elements in the form of a bill. But as for an actual floor vote on sweeping changes to Social Security, he gave it about a 30 percent chance. 

Medicare Overhaul -- Low Chance 

Part of the problem with making Medicare changes, while necessary to stabilize the federal budget, is that Republicans demonized the idea of any cuts to the elderly during the health care overhaul debate. 

Some elements of the commission's Medicare plan could come up for a vote, like a repeal of the so-called CLASS Act -- Republicans have long railed against the long-term care program and could use the report as justification to advance a repeal. 

But the report also calls for a change in the deductible structure and other reforms, which would either be decried as too much or too little or too dangerous. 

Besides, Ryan has been pushing a plan of his own and made his disappointment with the commission's proposal known Wednesday. 

"My primary concern with this plan is health care," Ryan said. "I do not believe that this sufficiently fixes the health care problem and guess what? Our debt problem is the health care problem." 

Simpson and Bowles argue that policymakers are going to have to confront these issues and still expressed hope Wednesday that the commission would approve the entire package, sending the whole thing to Congress. Bowles said voters are telling him "not to wimp out." 

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Pelosi's decision: What will her new role in Congress be? - USA Today

By William M. Welch, USA TODAYNancy Pelosi, the first woman to serve as speaker of the House, faces a decision: whether to seek to return to her old job as leader of the Democratic minority.Easily re-elected by voters in her heavily Democratic district in San Francisco, Pelosi could instead decide to step away from Congress where she has served for a quarter century, now that she no longer commands a House majority.

After a grueling campaign in which Republicans around the country demonized her as the face of a liberal Democratic Party, retirement at age 70 might seem an appealing option.

Pelosi could also take a third course: serving out her new two-year term as a House member, but not seeking a leadership post in the Democratic caucus.

Her immediate predecessor, former House speaker Dennis Hastert, opted to return to Congress as a rank-and-file Republican— outside the leadership — after voters handed Democrats and Pelosi majority control of the House four years ago. Hastert returned to private life in 2007, resigning his Illinois-based House seat halfway through his term.

Pelosi kept quiet about her plans in advance of this week's elections, saying she expected Democrats to retain the majority. Now that they have lost it, she has scheduled an interview with ABC News for Wednesday night.

"The outcome of the election does not diminish the work we have done for the American people," Pelosi said in a statement on election night as the size of the Democrats' loss became clear. "We must all strive to find common ground to support the middle class, create jobs, reduce the deficit and move our nation forward."

Some Democratic House members, including Rep. Heath Shuler of North Carolina, had warned they might not support her for another leadership term next year. Shuler won his third term on Tuesday.

Martin Frost, a former Democratic House member from Texas, says that was all bluster, adding Pelosi could return to the minority leader's post if she wants too. He noted that the longest-serving House speaker, Sam Rayburn, spent two brief periods with Democrats in the minority, 1947-48 and 1953-54 while maintaining his leadership post. After both terms in the minority, Rayburn regained the speaker's position when his party returned to the majority. He served as speaker for a total of 17 years.

The question, though, is would Pelosi want to do that — and would her Democratic colleagues want it as well.

"It's her call," said Frost, who lost to Pelosi in 2002 in the race for Democratic leader. "She might decide this is enough. I can't see an effective challenge (within the House Democratic caucus) to her."

Frost says that in Pelosi's four years as speaker of the House, she proved among the most effective to hold the post and helped President Obama win passage of the massive health care law, an $814 billion economic stimulus package and other goals.

Frost also credits her with how she handled becoming the target of Republican attacks in districts far from her own, and says Republicans found in her — a woman representing liberal San Francisco — an easy target.

"Part of this is because she's a woman," Frost says. "I don't think they could have done this to a male speaker. There are a lot of people who were not happy to have a woman in a position of leadership."

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Makeup of New Congress Increases Odds of Gridlock - Wall Street Journal

Come January, the House will be composed of an energized conservative Republican majority and a Democratic minority that has become more liberal. At the same time, a more closely divided Senate could make it harder to assemble the 60 votes needed to pass most bills.

Getty Images Senate Majority Leader Harry Reid speaks in Las Vegas on Tuesday, after defeating Republican Sharron Angle in a hotly contested race.

That could be a recipe for legislative gridlock.

In the past year, Senate Majority Leader Harry Reid (D., Nev.) has struggled to pass legislation even with a 59-seat majority, thwarted by Republican filibusters. The election's outcome remained uncertain in Alaska and Washington state, but it's clear Democrats will emerge with a far smaller majority of 52 or 53 seats out of 100.

In such a narrowly divided Senate, a bipartisan coalition will be required to tackle any difficult issue. Yet some Democrats leaving the Senate, like Arkansas's Blanche Lincoln and Indiana's Evan Bayh, are among the most open to working with Republicans.

Senate, House, governors' and other races at the state, district and county level

Mr. Reid said the election results left the parties no choice but to work together—and that he wanted to do so. But he also said Republicans have been uniformly obstructionist over the past two years.

"The ball is in their court," Mr. Reid. "We made the message very clear that we want to work with the Republicans. If they're unwilling to work with us, there's not a thing we can do about it."

GOP leaders don't see it that way, saying voters rewarded them for blocking Democratic initiatives.

"What the American people were saying yesterday is they appreciate us saying no to things the American people indicated they were not in favor of," said Senate Minority Leader Mitch McConnell (R., Ky.).

Now, he said, it's up to the Democrats to move the Republicans' way.

That might be easier said than done, with the new Senate still including a strong faction of impassioned liberals, like Sen. Bernie Sanders (I., Vt.), as well as a group of staunch conservatives like Sen.-elect Rand Paul (R., Ky.).

With every senator having the ability to bring the Senate to a halt under its arcane rules, gridlock in the chamber is a serious risk.

The House is likely to be even more polarized than the Senate. The resurgent Republican majority appears responsive to the populist spirit of the tea party. The Democratic minority, having suffered many losses among its conservative members, will be more broadly liberal.

Twenty-two out of the 53 members of the conservative Blue Dog Democrats lost on Tuesday night, and another five are retiring, significantly weakening a group that has sought to bridge the gap between the two parties.

Many of the centrists who lost were first- or second-term members from conservative districts, and Democrats will have a far smaller foothold in the South and Midwest.

House Minority Leader John Boehner (R., Ohio), who is expected to become speaker in January, told reporters he hoped to work with President Barack Obama, but he didn't mention House Democrats.

Mr. Boehner did speak of "incorporating members of the tea party," which may not bode well for working with the opposition Democrats.

Rep. Lynn Woolsey (D., Calif.), who co-chairs the Congressional Progressive Caucus, noted that her liberal group lost only four of its 82 members, in contrast to the Blue Dogs.

"We're not going to give up progressive values just to look like we're cooperating with the tea party," Ms. Woolsey said in an interview. "We cannot become timid."

Beyond the Blue Dogs, Democratic casualties in the House included powerful committee chairmen such as John Spratt of the Budget Committee, Ike Skelton of the Armed Services Committee and Jim Oberstar of the Infrastructure and Transportation Committee. All of them were noted for working with Republicans.

Tuesday's results did suggest a renaissance of Northeastern Republicans in Congress, a species that had been all but extinct. The House will have at least five new Republicans from Pennsylvania, five from New York and two from New Hampshire.

Some may be open to making common cause with Democrats on certain issues. "Centrists Republicans will play a larger and vastly more important role in this new Congress," said former Rep. Tom Davis (R., Va.), who heads the centrist Republican Main Street Partnership.

But given the passion of the small-government activists who powered the Republican sweep, there was little talk of compromise Wednesday in the House. Just hours after polls closed, Republicans faced a messy leadership battle that underlined the dynamic within the party.

Rep. Jeb Hensarling (R., Texas) announced a run for chairman of the House Republican Conference, the fourth-ranking position in the House GOP. He was quickly endorsed by Rep. Eric Cantor (R., Va.), a top Republican leader.

Rep. Michele Bachmann (R., Minn.), a high-profile leader of the tea-party movement, announced she was running as well. Neither Mr. Hensarling nor Ms. Bachmann is known for compromising with Democrats, and Ms. Bachmann in particular is given to comments that outrage liberals.

House Democrats faced their own leadership questions as they awaited word from Speaker Nancy Pelosi (D., Calif.) about her next step.

Some Democrats expected she would resign her leadership post rather than become minority leader, and perhaps leave Congress entirely. That is what Republicans Newt Gingrich and Dennis Hastert did after they lost the speakership.

Pelosi spokesman Brendan Daly said she had not yet made her plans known. If Ms. Pelosi doesn't remain, Rep. Steny Hoyer (D., Md.) would likely become House Democratic leader.

Some Democrats have wondered whether Mr. Hoyer, a centrist who enjoys strong support from the Blue Dogs, would face a challenge in a more liberal-dominated caucus, but so far none has surfaced.

—Alexandra Berzon
and Louise Radnofsky contributed to this article.

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