Coons, O'Donnell Avoid Details on Closing Deficit

Published Oct 27, 2010. By Ben Evans.

WASHINGTON (AP) Deficit spending may be the driving issue in this year's election, but don't look to Delaware's leading Senate candidates for concrete plans to cut costs or raise taxes to balance the budget.

Instead, Democrat Chris Coons and Republican Christine O'Donnell are offering broad assurances that they will root out savings if elected an age-old pledge that lawmakers have a hard time executing in Washington.

Sure, Coons and O'Donnell both agree that spending is a problem and have pointed to areas they would cut. O'Donnell says she would scale back the Education Department and fight local earmarks. Coons suggests eliminating some farm subsidies and cutting weapons programs that the Pentagon has been trying to phase out.

But such trimming barely makes a dent in the $1 trillion-plus annual deficits facing the country, and there is little talk of finding new revenues.

Joshua Gordon, policy director for the bipartisan Concord Coalition, an advocacy group for balanced budgets, said the dynamic is common on the campaign trail, with candidates trying to show they understand the frustration with deficits while also talking around the hard choices that must be made.

"You really have to say you're going to do one of two things that people don't like: cut spending or raise taxes," Gordon said. "It's risky politically."

Coons and O'Donnell have both shied away from politically unpopular cuts to fast-growing entitlement programs such as Social Security and Medicare that budget experts say that, without reforms, will be the major driver of spiraling deficits.

Coons, the New Castle County executive who balanced his local budget by raising property taxes and cutting spending, has said tough choices must be made. But he has campaigned more on defending benefits than reducing them. He has ruled out options such as raising the retirement age for Social Security.

"There are going to be big challenges ahead," he said in a recent debate, "and I think we need to send to Washington people who have real experience balancing budgets, making hard choices."

O'Donnell has come closer to proposing cuts. She says "everything should be on the table," including raising the retirement age or increasing premiums for Medicare. She has also floated the idea of lower benefits for wealthier seniors.

"We've got to take drastic measures," she said in a recent debate.

But when pressed, she stops short of saying benefit reductions will be necessary, and instead focusing on cutting "waste, fraud and abuse" that she says cost the nation billions of dollars a year.

At the same time, O'Donnell wants to boost defense spending, which now accounts for about 20 percent of the budget, and she has sworn off tax increases. In fact, she wants to extend all of the Bush-era tax cuts expiring later this year, a move that would cost the Treasury some $3.9 trillion over the next decade.

Coons, too, would extend the bulk of the tax cuts, but has suggested he would support President Barack Obama's plan to end cuts for families earning $250,000 or more a move that would shave about $700 million off the cost.

Coons says he would repeal oil and gas industry tax breaks that he says are costing about $4 billion a year, and he would follow Defense Secretary Robert Gates' plan to cut the Pentagon's budget by $100 billion over five years and phase out weapons programs that the Pentagon no longer requests but that lawmakers have kept alive because the work creates jobs in their states.

Coons says it's time to soon begin withdrawing troops from Afghanistan, in a war that now is estimated to cost more than $100 billion a year. O'Donnell supports a long-term commitment, saying the U.S. should remain in the country until it is more stable.

All told, the federal government spent some $3.5 trillion in the just-ended 2010 fiscal year, up about 9 percent from the previous year largely because of increased costs from the recession, such as rising unemployment benefits and food stamps.

The extra costs, along with depressed tax revenues, produced a near-record $1.3 trillion deficit.

Anger about deficits fueled by frustration over Obama's $814 billion economic stimulus and former President George W. Bush's $700 billion Wall Street bailout has generated a backlash among voters this year, putting Democratic power at risk.

Democrats say the recession would have been worse if the government hadn't stepped in, and they note that most of the bailout, which began under Bush with strong Republican support, has been repaid. Conservatives argue the programs are textbook examples of Washington's uncontrolled spending.

Looking forward, many budget experts say lawmakers must focus on the entitlement programs that expand automatically each year as new participants qualify for benefits. Social Security, Medicare and Medicaid, which already account for about 40 percent of the budget, could soon swamp the budget, they say.

"It's a weird election because there is a lot of discussion about fiscal issues and yet in some ways ... the whole outcry about the current deficits is really missing the problem," Gordon said. "People are upset about programs like the stimulus bill or the (bailout) that, in the scheme of things, in the long-term, don't really have much to do with making fiscal policy sustainable."