House Democrats tap 3 for deficit super committee

By Richard Cowan and Donna Smith

WASHINGTON (Reuters) - Democrats named three loyal party lieutenants to a deficit reduction "super committee" on Thursday, charting what could be a path to partisan deadlock with all 12 members now appointed.

Representatives Chris Van Hollen, Xavier Becerra and James Clyburn -- all veterans drawn from leadership -- were appointed by House Democratic Leader Nancy Pelosi.

Markets have been looking for signs that a wide deal on tax or entitlement reform might emerge from the panel, but it is under time constraints -- it must report recommendations by November -- and most of its members are party loyalists.

In the fight over the federal deficit, Democrats have dug in to resist cuts in spending for big social programs, such as Medicare and Medicaid, while Republicans have so far refused to consider any tax increases to raise new government revenues.

Lawmakers battled from these entrenched positions for more than three months before agreeing on August 2 to raise the debt ceiling, avoiding a U.S. default, and creating the panel, known as the Joint Select Committee on Deficit Reduction.

It must find $1.5 trillion in additional budget savings over 10 years and issue recommendations before Thanksgiving. Those savings can include spending and tax measures.

Congress must vote on the recommendations, on an up-or-down basis with no amendments, by December 23. If either of the two deadlines goes unmet, $1.2 trillion in automatic budget cuts will be triggered in 2013 -- a prospect expected to motivate lawmakers to make something meaningful out of the committee.

Republicans on Wednesday named mostly no-new-taxes hardliners to the super committee, although one of them, Representative Dave Camp, said on Thursday that he would not rule out tax increases if they could boost economic growth.

Camp, chairman of the tax-writing House Ways and Means Committee, said in a Reuters interview that the deepening global financial crisis would prompt him and other committee members to pull together.

"I don't want to rule anything in or out," Camp said. "I am willing to discuss all issues that might help us reduce our short and long-term debt and grow our economy."

'GRAND BARGAIN'

Camp will be joined on the panel by fellow House Republicans Fred Upton and Jeb Hensarling, who will be co-chair. Senate Republicans named on Wednesday were Jon Kyl, Rob Portman and Patrick Toomey, a Tea Party favorite.

The other co-chair will be Democratic Senator Patty Murray. Two other Senate Democratic member are John Kerry and Max Baucus, chairman of the powerful Senate Finance Committee.

Clyburn is the No. 3 House Democrat. Becerra is also a leadership official. Van Hollen is the top Democrat on the House Budget Committee and former chairman of the House Democratic Campaign Committee. All are close Pelosi allies.

In announcing her three picks, Pelosi said, "We must achieve a 'grand bargain' that reduces the deficit by addressing our entire budget, while strengthening Medicare, Medicaid and Social Security."

All six of the Republicans on the panel are known as opponents of tax increases, some more than others.

"We can't have great confidence that we're going to get a 'grand bargain' but the option is there and I think the opportunity is there," said Norm Ornstein, a fellow at the conservative think tank American Enterprise Institute.

"The one thing that may provide an impetus now is forces beyond the control of members of Congress and what's occurring on the ground. From the riots in England to the extraordinarily shaky state of Europe with serious problems in Italy, Portugal, Spain ... we really do have the possibility of a global depression. And if that isn't enough to jolt people out of their ideological positions, maybe nothing is.

(Writing by Kevin Drawbaugh, Editing by Howard Goller)