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Kerry chosen for debt deal’s key panel

By Theo Emery and Donovan Slack
Globe Staff / August 10, 2011

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WASHINGTON - Senator John F. Kerry has been chosen to serve on the powerful 12-member congressional committee charged with cutting more than $1 trillion from the federal deficit over 10 years, a daunting task that puts the Massachusetts Democrat squarely at the center of the ferocious fight over debt and spending.

Word of Kerry’s appointment to the so-called super committee began leaking out late yesterday afternoon, along with the names of two other Democrats, Max Baucus of Montana and Patty Murray of Washington. Murray will serve as cochair of the committee.

Senate majority leader Harry Reid of Nevada confirmed the appointments last evening.

“As the events of the past week have made clear, the world is watching the work of this committee. I am confident that Senators Murray, Baucus, and Kerry will bring the thoughtfulness, bipartisanship, and commitment to a balanced approach that will produce the best outcome for the American people,’’ Reid said.

The committee will include six Democrats and six Republicans; each of the four top leaders in Congress is responsible for filling three slots.

The committee has been the subject of intense speculation - and some trepidation - since last week when Congress approved a $2.5 trillion deficit reduction package that created the panel. Taxes are almost sure to be a major source of tension for committee members. Democrats have said they hope the committee will raise new revenues, while Republicans have refused to consider any increase in taxes.

The three senators released a joint statement yesterday evening saying the task ahead would be difficult, admitting “there is peril in serving on this committee.’’ But Americans wanted the committee to work “without the red hot partisanship and brinksmanship of the last months,’’ and they pledged to work with Republicans in a serious and bipartisan spirit.

The statement continued: “This is not going to be easy. Our challenge is to find common ground without damaging anyone’s principles. We believe we can get there. This committee was designed to require bipartisanship, and we are going to work hard with our Republican colleagues to attain it.’’

The three appointments are the only ones made public so far. Spokesmen for the three other congressional leaders - House Speaker John A. Boehner of Ohio, House minority leader Nancy Pelosi of California, and Senate minority leader Mitch McConnell of Kentucky - said yesterday they had no announcements. The deadline for their appointments is Aug. 16.

The committee in many respects represents the fulcrum of the debt ceiling agreement struck last week. After an initial set of cuts totaling $1 trillion over 10 years, the 12-member panel must recommend $1.5 trillion more in deficit reduction - potentially including new revenues - by Nov. 23. Congress must act on their recommendations by Dec. 23.

A powerful incentive for the bipartisan committee to agree on recommendations, and for Congress to approve them, is written into the deal. If the panel deadlocks or Congress rejects its plan, spending cuts totaling some $1.2 trillion would kick in automatically, spread equally over areas that Democrats and Republicans want to protect.

The deal was agreed to last week just shy of a deadline that Treasury officials warned was the last possible date to raise the federal government’s borrowing limit without facing default on its obligations.

The deal ended weeks of brinkmanship between Democrats and Republicans. The agreement sparked a brief spirit of bipartisan relief, but that was quickly dashed late last week after a major ratings agency, Standard & Poor’s, downgraded the nation’s long-term debt rating from AAA to AA+.

The nation and financial markets have been in a state of high anxiety since. On Monday, President Obama tried to calm the jangled nerves of the nation and markets, partly by emphasizing the panel’s importance.

He admitted that “there’s some skepticism’’ that the members of the committee will be able to reach a compromise but said that he hoped the tremors in the market would drive home the need for an agreement.

“I intend to present my own recommendations over the coming weeks on how we should proceed. And that committee will have this administration’s full cooperation. And I assure you, we will stay on it until we get the job done,’’ he said.

Reid’s three appointments represent a carefully calibrated approach.

Kerry, who was the Democratic nominee for president in 2004, brings a breadth of Washington experience. He has worked on a number of bipartisan initiatives, including the nuclear arms reduction New START agreement that he cosponsored with Senator Richard Lugar, Republican of Indiana.

He has also mounted sharp attacks against House Republicans as the debt limit debate reached its crescendo, calling the spectacle of discord in Congress a “national embarrassment.’’

He has cautioned about the difficult work ahead, including “huge decisions to make about Medicare, Medicaid, Social Security, defense, our overall budget.’’

On Sunday, he pointedly called Standard & Poor’s downgrade of the US long-term credit rating a “Tea Party downgrade,’’ a term also used by a top White House adviser the same day.

Murray sits on two powerful Senate committees, budget and appropriations, which are both central to the budgeting process. But she is also a top political lieutenant in the Senate as chairwoman of the Democratic Senatorial Campaign Committee, helping Democratic campaigns and candidates.

Last fall, President Obama described the four-term senator as “the mom in tennis shoes who was just looking to help a few people and solve a few problems’’ when she came to Washington.

She voted to pass the debt deal last week but had wanted higher taxes on the wealthy and sought to eliminate subsidies for oil and gas companies. She said in a statement that she was “deeply disappointed that Republicans refused to allow millionaires, billionaires, and oil companies to sacrifice alongside those who will be affected by these cuts.’’

At the same time, Murray signaled she is open to compromise.

“The ‘my way or the highway’ approach to governing needs to end,’’ she said in the statement. “It’s time to stop careening from political crisis to crisis and start coming together on a vision for a nation that puts its people before politics and partisanship.’’

As chairman of the Senate Finance Committee, Baucus has been in charge of writing tax policy in the Senate. A probusiness conservative, he was a member of the bipartisan deficit-cutting commission led by Erskine Bowles and Alan Simpson but voted against its recommendations.

Baucus voted for the debt agreement but was not pleased with it.

“We need a balanced approach to a balanced budget, where millionaires and billionaires chip in their fair share, tax cheats cough up money that’s being hidden overseas, and we protect Medicare and Social Security to keep our sacred promise to seniors,’’ he said in a statement at the time.

Political analysts said Baucus brings in-depth knowledge of the tax code, while Murray is well versed in budgeting and appropriations. But Kerry is something of an odd choice, said Jennifer Duffy, senior analyst at the nonpartisan Cook Political Report.

Duffy surmised that the Bay State senator could be there to represent the more liberal wing of the Democratic Party or to use his foreign policy experience.

“Kerry does have some negotiating skills,’’ she said.

Regardless of who is appointed, Duffy said, she does not have high hopes for the committee. If history is any indicator, she said, they will agree on very little.

“And even if they do, getting it through both houses of Congress and across the president’s desk is a Herculean task,’’ she said.

The committee is expected to be the focus of intense lobbying from special interests. The agreement was barely a day old when a major lobbying group for military contractors, for example, demanded that the panel include members with strong defense experience.

Theo Emery can be reached at temery@globe.com. Donovan Slack can be reached at dslack@globe.com. Follow them on Twitter @temery and @DonovanSlack.