BUDGET:

Obama jobs plan intensifies supercommittee's struggle

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The 12-member bicameral panel tapped to slash $1.5 trillion from the federal deficit will hold its first hearing tomorrow amid new political tension sparked by a White House jobs plan that seeks to add to its workload.

The already-high stakes for the so-called supercommittee, tasked by last month's debt-limit deal to avert automatic federal spending cuts through a package of deficit trims, climbed higher Thursday after President Obama asked its members to find extra savings that would pay for "the full cost of" his new $447 billion jobs plan.

Republicans blanched at the idea that the 12-member debt group "pay for yet another round of stimulus," as supercommittee Rep. Jeb Hensarling (R-Texas), the supercommittee co-chairman, put out a statement urging Democrats to take up GOP deregulation bills as a means to spur job creation.

What's more, while Obama has yet to propose specific offsets for his jobs bill, repealing oil and gas industry tax benefits is all but certain to be among them -- reigniting a fight over subsidies that helped paralyze the congressional energy debate for much of 2011.

Energy taxes may well remain in the background at tomorrow's first supercommittee hearing, where Congressional Budget Office chief Douglas Elmendorf is set to discuss "the history and drivers of our nation's debt and its threats," according to a news release from the debt panel.

But the prospect for targeted tax-law tweaks in the supercommittee's final proposal appeared to rise after its organizational meeting last week. At that event, briefly interrupted by protesters calling for the panel to consider job creation, Hensarling and other Republican members left the door open to raising new revenue through what the Texan called "pro-growth tax reform."

Two more energy and environmental angles to the debt panel's agenda, both originating from the GOP side of the aisle also loom in the background as it starts a six-week sprint toward a statutory deadline for putting deficit plans into legislative language.

The first is the potential for rolling back federal regulations in a final debt-cutting package, which supercommittee member Rep. Fred Upton (R-Mich.) cited during last week's meeting. "[M]ore jobs are at risk because of regulatory burdens and economic uncertainty," said Upton, chairman of the House Energy and Commerce Committee.

Environmental groups already are lobbying against such attempts to halt U.S. EPA and other agency rules through the supercommittee process, but Republicans have a second energy-centric route to the debt panel docket: The jobs they assert could be created by expanding domestic drilling. Led by House Natural Resources Chairman Doc Hastings (R-Wash.), drilling proponents on the Hill are joined by oil-industry allies in pressing for the supercommittee to consider the jobs as well as revenue that could be generated by opening new federal areas to fossil-fuel production (E&ENews PM, Sept. 8).

Schedule: The hearing is tomorrow at 10:30 a.m. in 216 Hart.

Witness: Congressional Budget Office Director Douglas Elmendorf.