Paying for Obama's plan: It's complicated

@CNNMoney September 9, 2011: 4:00 PM ET

NEW YORK (CNNMoney) -- Even if President Obama had gotten a standing ovation for everything he proposed in Congress on Thursday, his $447 billion jobs bill still wouldn't pass if it isn't paid for.

And the president made clear that he knew it. "Everything in this bill will be paid for. Everything," Obama told lawmakers.

Specifically how that will happen is not at all clear.

Obama asked the 12-member debt super committee, already charged with proposing between $1.2 trillion and $1.5 trillion in debt reduction over a decade, to add the cost of the American Jobs Act to its goal.

If the panel were to do that, its new target would move closer to $2 trillion. That prospect didn't sit well with some of the committee members.

"[T]he president is essentially tasking a committee designed to reduce the deficit to pay for yet another round of stimulus," Republican Rep. Jeb Hensarling, who co-chairs the committee, said in a statement. "This proposal would make the already-arduous challenge of finding bipartisan agreement on deficit reduction nearly impossible."

Meanwhile, Democratic Sen. Max Baucus told CNN that the president's request would make the committee's job more difficult than it already is.

National debt: The 5-minute primer

What's most difficult for the super committee is that it has only 11 weeks and a huge partisan chasm to bridge before it can reach consensus on any amount of deficit reduction.

However, it will not suffer from a shortage of ideas. A number of bipartisan debt-reduction plans that would cut deficits by at least $4 trillion have been proffered in the past year. The best known of these is the so-called Bowles-Simpson commission created by the president.

And Obama said he would submit his own debt-cutting plan to the super committee on Sept. 19. He characterized it as "ambitious -- a plan that will not only cover the cost of this jobs bill, but stabilize our debt in the long run."

Obama said his recommendations will include additional spending cuts that would phase in gradually, "modest adjustments" to Medicare and Medicaid, and a tax reform plan "that asks the wealthiest Americans and biggest corporations to pay their fair share."

Those ideas may or may not fly with the super committee. But even if they do, paying for Obama's plan will reduce the super committee's options for meeting its original target.

In that sense, coming up with another $450 billion in debt reduction would make the committee's job more difficult.

But it doesn't have to. It all depends on what the committee's end goal is, said Bob Bixby, executive director of the Concord Coalition, a deficit watchdog group.

Several members at the group's first meeting Thursday said they hoped the committee would exceed its $1.5 trillion target and consider proposing tax and entitlement reform. In other words, at least some members appeared to be aiming for a so-called grand bargain in which both Democrats and Republican make difficult concessions.

So adding $450 billion to their charge might actually make it easier to go for a grand bargain. That's because aiming for even more savings will require putting everyone's sacred cows on the table, Bixby said.

But not everyone on the panel wants a grand bargain.

Republican Sen. Jon Kyl said tax and entitlement reform would be too hard for the committee to achieve.

The problem is that if the committee takes Kyl's advice, it would be unable to address the main drivers of the debt. And its choices of what to trim would be greatly narrowed.

"If they don't want to go for a grand bargain [Obama's request] certainly makes their job more difficult," Bixby said.

--CNN's Ted Barrett contributed to this report. To top of page

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