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Former Rep. Tim Penny

Glen Stubbe, Star Tribune

Former Rep. Bill Frenzel

Cheryl A. Meyer, Star Tribune

Penny, Frenzel offer insider view of fiscal cliff talks

  • Article by: COREY MITCHELL
  • Star Tribune
  • December 19, 2012 - 8:23 AM

WASHINGTON -- As negotiations over the looming fiscal cliff push ahead, a couple of old Minnesota budget hands have come out of retirement to work frantically to steer the nation away from the precipice.

Former Minnesota U.S. Reps. Bill Frenzel and Tim Penny are co-chairs of the Committee for a Responsible Federal Budget, the umbrella organization for the Campaign to Fix the Debt. That has given them an insider's view as the powerful new group has amassed more than $40 million and field offices in 18 states since July, all in an attempt to influence the budget talks.

With its mix of influential politicians, corporate CEOs and former federal policy leaders, Fix the Debt has scored face-to-face meetings with President Obama, Capitol Hill leaders and key White House staff to urge compromise.

"We're not saying, 'Find a specific solution,' we're saying, 'Find a solution,'" Frenzel said. "We like to think of ourselves as quiet advisers."

In the past, the Committee for a Responsible Federal Budget counseled the House and Senate budget committees, offering advice from retired congressional budget hawks and former federal budget directors.

"There is great value in people who have been championing these issues for a long time," said Frank Micciche, chief of staff for the nonpartisan think thank and a vice president with Fix the Debt.

But the stakes are higher now than Frenzel and Penny can ever recall.

Failure to halt the automatic federal spending cuts and tax hikes set to begin on Jan. 1 could result in deep defense cuts, bring 30 million more middle-class Americans under an alternative minimum tax once intended for the rich, and deal another blow to the nation's health care system with further reductions to Medicare and Medicaid.

"The cliff is real, and the fall will be painful," Frenzel wrote in an opinion piece for U.S. News and World Report last month. "Responsible politicians will avoid it at all costs."

Business backing questioned

Rather than laying out specific plans for solving the budget impasse, Fix the Debt has touted the value of shared sacrifice for Democratic and Republican leaders, advocating the principles of former U.S. Sen. Alan Simpson and former Clinton White House Chief of Staff Erskine Bowles, who co-founded the group.

When the two led Obama's Deficit Reduction Committee in 2010, they produced a report calling for a painful mix of tax increases, government spending cuts and changes that would restrict access to Social Security and Medicare to cut back costs. Congress shunned the idea then, but, as the cliff looms, it has gained a second life on Capitol Hill.

The approach has some critics. The organization gets nearly all its money from corporate donations, giving rise to questions from groups like the Institute for Policy Studies, which claims that Fix the Debt's plans to seek cuts to Social Security and Medicare are a veiled effort to secure corporate tax breaks at the expense of the poor and elderly.

Penny said that Fix the Debt's "core principles" call for supporting economic growth and protecting the country's vulnerable citizens. "Their alliance here is strictly focused on the big picture," he said.

Seeing the potential for fiscal disaster on the horizon, business leaders began reaching out to the Committee for a Responsible Federal Budget about a possible partnership as early as 2010, Frenzel said.

UnitedHealth Group, of Minnetonka, is among more than 70 corporations that have joined the campaign's Fiscal Leadership Council. This fall, Simpson and Bowles barnstormed the country, stopping in Minnesota to bring a message to business leaders: Remind Minnesota's lawmakers that failing to find a solution for the country's ongoing budget woes is not acceptable.

"There's nothing evil about business," said Robert Bixby, executive director of the Concord Coalition, an advocacy group focused on ending the country's deficit spending and promoting a balanced federal budget. "But if it begins to look like there's some sort of agenda not aimed at deficit reduction, that's a problem."

Beyond the cliff

Among the nearly 150 former members of Congress who support the campaign are Minnesota's Sen. Norm Coleman and Reps. Martin Sabo and David Minge. Sabo and Minge also sit on the board of the Committee for a Responsible Federal Budget.

"Everything has to be on the table," Sabo said. "The problem's big enough that nobody's going to like the final solution."

On Capitol Hill, Frenzel served as lead Republican on the House Budget Committee and Penny led the Democratic Budget Group. Based on their experience from past budget battles, they expect Fix the Debt's work to stretch into the next Congress for issues that won't be resolved in these budget negotiations, such as tax code reform and the debate over raising the nation's borrowing limits.

"We'd love to be legislated out of business, but it doesn't look like we're headed that way," Frenzel said.

Corey Mitchell is a correspondent in the Star Tribune Washington Bureau. Twitter: @CMitchellStrib

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