Homer Alaska - Business

Story last updated at 12:57 PM on Wednesday, August 31, 2011

Murkowski, Begich discuss their views on federal debt

By Tim Bradner
Morris News Service - Alaska

Alaska U.S. Sen. Lisa Murkowski, a Republican, has moved squarely to the center in the raging debate in Congress over cuts to the federal deficit and federal spending. Murkowski says revenue-raising measures must be part of the solution to the federal budget problem along with spending cuts.

She's not advocating tax increases for most Americans, but she thinks the very wealthy should at least pay the same tax rates as most people, and corporations can afford to lose a few of their lucrative tax loopholes.

"With $14 trillion in our national debt, everything needs to be on the table: entitlements, spending and taxes. Whatever we do, we will be criticized from all sides, but we need to have tax reform as part of the cafeteria of choices, and it must be comprehensive," Murkowski said.

Home for the congressional August recess, Murkowski addressed Commonwealth North Aug. 23, outlining her ideas for the first time to an Alaska audience.

Alaska's other U.S. senator, Democratic Sen. Mark Begich, also is in Alaska for the recess. In a briefing for the Journal of Commerce Aug. 22, Begich said the new bipartisan committee formed to recommend a budget plan by Thanksgiving faces an extremely difficult task.

Begich said he thinks the odds are about 50-50 the panel of six Republican and six Democrats formed under the recently enacted federal Budget Control Act will be able to forge recommendations that will get seven votes, a majority of the group. If a plan can get the needed votes, Congress must vote on it by Christmas.

The Budget Control Act requires a cut of $917 billion from the budget over 10 years and tasked the new committee of 12 to find upward of $1.5 trillion in cuts over the same period.

Murkowski said she doesn't think raising taxes is an answer, but the overall tax code needs to be simplified and made more fair. She endorsed recent comments by billionaire Warren Buffet that Congress should stop "coddling" the super-rich.

"Warren Buffet pays a tax rate of 17 percent and the people who work for him pay at rates of 32 percent to 35 percent. Tell me where there is equity in this system," the senator said.

Murkowski is more optimistic than Begich that a solution can be reached by the committee of 12 because a lot of groundwork on consensus-type approaches has actually been laid, including the Simpson-Bowles Commission headed by former U.S. Senator Alan Simpson of Wyoming and Erskine Bowles , a former Clinton chief of staff, who forged a set of middle-of-the-road recommendations.

Another working group headed by Vice President Joe Biden and the so-called "Gang of Six," a group of three Republican and three Democratic senators with sharply differing views managed to find consensus recommendations, even though they weren't adopted, at least yet.

"I was encouraged by the recommendations of the Gang of Six," Murkowski said.

Some ideas from these and other groups that are being discussed include changes in the big and costly entitlement programs by shifting the way inflation is calculated for automatic increases and increasing the age for eligibility for full Medicare and Social Security benefits, Murkowski said.

If a majority of the committee of 12 can't agree on a plan or if a plan isn't adopted by Congress in December, the Budget Control Act requires spending cuts to be made across-the-board with a good share of those coming from the Department of Defense budget, Murkowski said.

"Think about what $50 billion to $60 billion a year in cuts to the defense budget might mean for our military bases in Alaska," Murkowski said.

In his briefing, Begich said he is optimistic that Alaska's bases will be able to hold their own in the coming review of defense spending because the state's key advantages in having space for ground and air combat training are not available elsewhere.

"Initially, the focus will be on foreign bases of our military. I cannot understand, for example, why we still need to post two brigades in Germany," Begich said. Korea is different matter, given the real threat from North Korea.

The infrastructure being invested to help the military in Alaska will help supporters of the Alaska bases argue their case, and the state should do its part to help with these infrastructure investments, Begich said. "We need to be aggressive in demonstrating a commitment to help," the senator said.

The approval by Gov. Sean Parnell and the state Legislature in state matching funds for federal money for the new $180 million Tanana River bridge is an example of what should be done, the senator said. The new bridge will help Army units reach training areas on the south side of the river on a year-around basis.

Tim Bradner is a reporter for the Alaska Journal of Commerce.