When was the last time you heard a politician announce: “I don’t care if I get re-elected!” “Let’s do what’s right for the country…”
Career politicians are more concerned with keeping their job rather than doing their job.
In fact, Republicans’ obsessive drive to shield the wealthy from modest tax increases has been the biggest obstacle to a deal all year. Supercommittee Republicans finally offered an 11th-hour package of revenue increases, which Democrats rightly criticized as having too many strings attached. That should have been the start of productive talks, but it turned out to be a dead end.
Democrats, though, are hardly blame-free. Obama took a largely passive role as the supercommittee bickered. And for months, the administration and key Democrats have clung to the erroneous notion that Social Security — the largest single program in the federal budget — needed no changes because it didn’t add a penny to the deficit. The retirement program is already in the red, and CBO estimates it will add a half trillion dollars to the deficit over the next decade.
Sometimes, it seems like the only people who lack common sense are those who represent us at the Statehouse or in Washington. But let’s be honest: Blaming elected officials for the dearth of common sense in the political arena is a copout.
We everyday citizens empower them by deluding ourselves that we deserve what each of us wants, no matter how dissimilar, and that we can have it all — government programs and tax cuts.
That thinking has brought us to the precipice of financial disaster. Perhaps by today, common sense prevailed and the 12-member bipartisan congressional debt committee, dubbed the “ supercommittee,” has worked out a deal before a Wednesday deadline triggers $1.2 trillion in cuts over the next decade.
That thinking has brought us to the precipice of financial disaster. Perhaps by today, common sense prevailed and the 12-member bipartisan congressional debt committee, dubbed the “ supercommittee,” has worked out a deal before a Wednesday deadline triggers $1.2 trillion in cuts over the next decade.
At this writing, I’m betting there is no deal. Congress hasn’t passed an actual budget for almost three years, so compromising on a rational plan to pay down the national debt, now at a staggering $15 trillion, would appear to be a pipe dream.
Democrats insist that they were closing in on the framework of an agreement, but that Republicans backed away from their willingness to accept significant revenue increases in exchange for cuts in the growth of entitlement programs. They said Mr. Boehner sealed the fate of the panel on Thursday by offering a package that had a mere $3 billion in new revenue, far less than an earlier Republican plan.
Republicans, who agreed that there was a potential framework a week ago, counter that the deal was spoiled by Democrats, who refused to lock in the level of entitlement savings or tax changes they would accept, and began to demand more revenues to match any substantive entitlement changes. Democrats also would not agree to a framework for tax reform, Republicans said.
Barring an unexpected turnaround before Monday’s deadline, the failure of the special Congressional deficit committee will be the third high-profile effort to fall short of a deal in the last 12 months, including a bipartisan deficit commission and talks last summer between President Obama and Speaker John A. Boehner.
Grover Norquist: the tax lobbyist with an iron grip on the GOP
Man whose influence is blamed by Democrats for the refusal of Republicans to sign up to a deficit-cutting deal with tax rises
What a surprise, not, our elected leaders in Washington have again failed to exercise their mandate, provide leadership, solve a simple yet thorny problem – cut spending and raise revenue.
In August, when the Joint Select Committee on Deficit Reduction was promulgated as a result of the debt crisis legislation, the six senators and six representatives were tasked with recommending $1.2 trillion in spending cuts to reduce the deficit, or else $1.5 trillion would be cut in domestic and defense spending. Now, the real fun begins, watching our elected leaders squirm and place blame for predictable kick the can – pin the tail on the other side. Both parties are accountable for this mess our country is in since each held unassailable power in the previous decade.
Unlike partisan ideologues like Paul Krugman who contend inaction is the best remedy for this dilemma, anyone with common sense can recognize that all of our national problems are self-inflicted due to the lack of leadership that goes back othe Jimmy Carter days. If the stuporcommittee had bren successful, the people and the markets would have gained a modicum of hope that the country could move forward.
‘Supercommittee’? More like stupor committee.
By Dana Milbank, Published: September 13
So what’s so super about the “supercommittee”?
The Joint Select Committee on Deficit Reduction , as the supercommittee is known formally, held a first meeting last week that consisted entirely of speech-making by the panel members. The panel followed that triumph by holding a hearing Tuesday morning devoted in large part to trading blame for the deficit.
“We have a spending-driven debt crisis,” announced Rep. Jeb Hensarling (Tex.), the Republican co-chairman. “I hope that we’ll be able to dwell somewhat today on just how significantly the big entitlement programs are the long-term drivers of this problem.”
Rep. Xavier Becerra (D-Calif.) countered that “the biggest portion” of the shortfall, other than the effects of the economic collapse, “are the tax cuts in 2001 and 2002, the Bush tax cuts.” The wealthy, he argued, “should be willing and ready to ante up, to meet their patriotic duty to contribute revenues.”
There are skeptics who say prospects are bleak that the supercommittee will come up with anything resembling a comprehensive solution to the deficit problem. I think those skeptics are too optimistic.
As the committee learned Tuesday in testimony from Congressional Budget Office Director Doug Elmendorf, they must have legislation in hand by the beginning of November to meet their own late-November deadline. Yet if Tuesday’s hearing was any indication, they can’t agree on the nature of the problem.
“The fundamental question,” Elmendorf lectured the blame-crazed lawmakers, “is not how we got here but where you want the country to go.”
The chief congressional bean counter, highly regarded by both sides as a neutral referee, laid out the choices: If you want to keep entitlement programs the way they are, you’re going to need big tax increases and sharp cuts to everything else government does. If you want to keep taxes where they are, you’re going to need severe cuts to entitlement programs as well as to everything else.
The answer should be obvious to reasonable people: all of the above. To prevent a ruinous rise in taxes or devastating cuts to Medicare and Social Security, there will need to be smaller tax increases and smaller entitlement cuts.
A who’s who of the debt supercommittee
Supercommittee’s secrecy disappoints Republican House freshmen
By Rosalind S. Helderman, Published: November1
A number of Republican House freshmen who came to Washington promising to slash government spending are increasingly worried that the congressional supercommittee, to which that task has now fallen, is operating too much in secret and that the lack of transparency could doom the enterprise.
Despite a few open sessions, including one on Tuesday, they worry that the panel’s mostly private negotiations will produce a result that does not represent the kind of revolutionary change they had hoped to bring to the Capitol.
Some are concerned that the legal mandate of the 12-member panel — to cut the deficit by $1.2 trillion to $1.5 trillion over the next decade — is too small. Some fear that they may be asked to sign on to the group’s product in December, without much time to review it, and warned of dire consequences if they do not get on board.
But most of all, they are disappointed that the supercommittee has been operating almost entirely behind closed doors. Though the group held its fifth public hearing Tuesday, its members have spent hours huddled behind closed doors and have offered only vague public comments about the progress of their talks.
Supercommittee must not ‘fail the country,’ Bowles says, offering his own plan
By Lori Montgomery, Published: November 1
Erskine Bowles, the former White House chief of staff who has worked for months to tame the national debt, bluntly warned members of a congressional panel Tuesday that they will “fail the country” if they do not break the impasse over taxes that is blocking a far-reaching agreement.
“I know most of you. . . . I have great respect for each of you individually,” Bowles told the 12 lawmakers gathered before him in an ornate House hearing room for the fifth public meeting of the debt-reduction supercommittee. “But collectively, I’m worried you’re going to fail. Fail the country.”
House Republicans make cross-party pitch to embolden debt ‘supercommittee’
By Rosalind S. Helderman andLori Montgomery, Published: November 2
A group of 40 House Republicans for the first time Wednesday encouraged Congress’s deficit reduction committee to explore new revenue as part of a broad deal that would make a major dent in the nation’s debt, joining 60 Democrats in a rare bipartisan effort to urge the “supercommittee” to reach a big deal that could also include entitlement cuts.
The letter they sent represents a rare cross-party effort for the rancorous House, and its organizers said they hoped it would help nudge the 12-member panel to reach a deal that would far exceed the committee’s $1.5 trillion mandate.
Among those who signed were several dozen Republicans who had previously signed a pledge promising they would not support a net tax increase. Among the Democratic signers were some of the House’s most liberal members who have opposed entitlement cuts.
Rep. Emanuel Cleaver II (D-Mo.), chairman of the Congressional Black Caucus, said the effort was to help Congress avoid being “cornered by the paralysis of small potatoes.” Rep. Cynthia M. Lummis (R-Wyo.), a member of the conservative Republican Study Group, said the intent was to compel the supercommittee to craft a strategy “so big, so comprehensive, so inclusive that any great statesman or stateswoman could hardly resist voting for it.”
“To succeed, all options for mandatory and discretionary spending and revenues must be on the table,” the group wrote, adding that previous deficit reduction task forces have suggested a goal of reducing the debt by $4 trillion over the next decade. “Our country needs our honest, bipartisan judgment and our political courage.”
The letter comes as pessimism that the supercommittee can find agreement by a Nov. 23 deadline is running high on Capitol Hill.
Aides to both sides have said the six House members and six Senators who serve on the panel are stuck on the same issue that has divided previous efforts to cut the deficit — Democrats want Republicans to accept sizable new revenue generation before agreeing to significant entitlement cuts and Republicans do not want to back a tax increase.]
Republican supercommittee members spent Wednesday shuttling between leadership offices, in discussions over potential revisions to an offer they sent to Democrats last week, aides said.
That proposal, which would slice $2.2 trillion from future borrowing over the next decade, included less than $100 billion in actual tax increases. Those increases would come entirely through revising the index used to measure inflation. Republicans argue they would get another $200 billion through encouraging economic growth.
Part of Wednesday’s discussion appeared to be whether to boost the tax offer by proposing to end some corporate subsidies such as tax breaks for oil and gas companies.
The bipartisan letter sent Wednesday included no specifics — it did not, for instance, commit its signers to supporting a tax increase, as many Democrats have urged, but merely urged that the committee consider revenue.
Still, Republicans said the number of members of their party who signed was significant, given fear among many members it would nevertheless be interpreted as endorsing taxes, particularly by Grover Norquist, the Americans for Tax Reform president. Norquist urges elected officials to sign a pledge that they will not raise taxes.
Rep. Steven C. LaTourette (R-Ohio) said if he had a nickel for every one of the Republicans who said they supported the letter’s goal but feared how Norquist would react, “I’d be rich and retired, and we’d have 200 signatures on the letter.”
LaTourette, a close ally of House Speaker John A. Boehner (R-Ohio), said the new coalition was a sign that Republican leaders are now willing to unite with Democrats on a grand bargain that would address both revenue and entitlements, even if it meant leaving behind some of the GOP’s hardline voices.
Norquist played down the letter’s significance, noting it merely asked the committee to consider all options.
“Consider anything,” he said. “Just don’t vote for a tax increase.”
And several Republicans who signed the letter were careful to note they were not endorsing a net tax increase — but rather a broad rewrite of the tax code that might close loopholes and lower rates, while still producing more government revenue.
The complex math of tax reform was highlighted Wednesday in a report from congressional tax analysts that cast doubt on a Republican plan to slash the corporate tax rate to 25 percent. The nonpartisan Joint Committee on Taxation concluded that eliminating existing loopholes and tax breaks would generate only enough cash to cut the rate to 28 percent.
The report was requested by Rep. Sander M. Levin (Mich.), the senior Democrat on the House Ways and Means Committee.
Levin noted in an interview that even getting the corporate rate down to 28 percent would require wiping out many critical tax incentives for manufacturers and the energy sector, a move many lawmakers may not want to take.
“If there’s a discussion of tax reform, it needs to be informed,” Levin said, “not just a stab in the dark.”
Republicans offer tax deal to break debt impasse; Democrats dismiss it
By Lori Montgomery, Published: November 8
Congressional Republicans have for the first time retreated from their hard-line stance against new taxes, offering to raise federal tax collections by nearly $300 billion over the next decade as part of a plan to tame the national debt.
But Democrats rejected the offer Tuesday — along with the notion that Republicans had made a significant concession that could end the long-standing political impasse — leaving a special debt-reduction committee far from compromise with less than two weeks until its Thanksgiving deadline.
Dems present offer to cut deficit by $2 trillion
ANDREW TAYLOR, Associated Press, DAVID ESPO, Associated Press
Updated 07:11 a.m., Thursday, November 10, 2011
WASHINGTON (AP) — Democrats on Congress’ supercommittee secretly presented Republicans with a revised deficit-cutting proposal earlier this week that calls for a blend of $1 trillion in spending cuts and $1 trillion in higher tax revenue over the next decade, officials in both parties said Wednesday night, adding that compromise talks remain alive though troubled.
The previously undisclosed offer scaled back an earlier Democratic demand for $1.3 trillion in higher taxes, a concession to Republicans. At the same time it jettisoned a plan to slow the growth in future cost-of-living increases in Social Security benefits, a provision liberal Democrats oppose.
The one-page proposal was handed to Republicans at a meeting Monday night attended by some but not all members of the supercommittee. At the same session, GOP lawmakers in attendance advanced a revised proposal of their own that signaled for the first time they would be willing to accept higher revenues as part of a plan to cut deficits over the next decade.
Given the unusual secrecy of the meeting and the committee’s Nov. 23 deadline to produce at least $1.2 trillion in savings, it appeared that the pace of activity on the panel was accelerating. Less clear was whether there was still time to bridge enormous differences on priorities, or whether each side was laying the groundwork for trying to blame the other in case gridlock triumphs.
The committee, comprising six Republicans and six Democrats, has been working for weeks. Evidence of progress has been scarce, with Republicans demanding large cuts in benefit programs such as Social Security and Medicare, while Democrats pressed for additional tax revenue as a condition for agreeing to make deep spending cuts.
Few details are known of the session Monday night, except that Sen. Pat Toomey, R-Pa., outlined a plan on behalf of the four Republicans in attendance, and Sen. Max Baucus, D-Mont., countered with the revisions in an earlier Democratic proposal.
One official said the meeting lasted several hours.
Any progress that may have been made by the panel has largely been overshadowed in the past two days by a Democratic campaign to dismiss the GOP proposal as a prescription for deep tax cuts for the wealthy at the expense of the middle class.
In a sign of the political struggle unfolding, Democrats circulated a four-page analysis that relied not on a review of what Toomey outlined, but on what they described as a different, similarly drawn proposal.
Republicans countered that for all the rhetoric, both sides had shown flexibility on the issues that long have been at the root of Congress’ inability to compromise on sweeping plans to cut deficits.
“Republicans have put revenues on the table. Democrats have put entitlements on the table,” said Sen. Lamar Alexander, R-Tenn. “They both need to put more of each on the table.”
Alexander said the so-called supercommittee could expect help from a bloc of 45 senators that have signed on to a letter pledging support for a deficit bargain that mixes new revenues with curbs on the growth of government benefits programs.
Democrats sounded far less upbeat.
“I have yet to see a real, credible plan that raises revenue in a significant way to bring us to a fair, balanced proposal,” said Sen. Patty Murray, D-Wash., the co-chair of the 12-member supercommittee.
In something of a dissent, the No. 2 Senate Democratic leader, Richard Durbin of Illinois, said he considered this week’s GOP offer “an honest effort” and “a breakthrough that can lead to an agreement. That’s what we need.”
Asked why he considered it to be a breakthrough, he told reporters, “The word ‘revenue.’ It is a breakthrough.”
Durbin said the bipartisan group of 45 senators planned to release a statement later Wednesday urging the supercommittee to keep working toward a target in the $4 trillion range, well above its mandated savings target of $1.2 trillion to $1.5 trillion.
In response, a spokesman for House Speaker John Boehner dismissed what Democrats had presented earlier in the week. “Right now, we are waiting for a response to what the second-ranking Democratic Leader in the Senate called ‘a breakthrough’ – and we’ve seen nothing,” saidMichael Steel.
The revised Democratic plan totaled $2.3 trillion in savings over the next decade, including projected savings in interest costs the government would realize from lower deficits, higher than the GOP $1.6 trillion blueprint.
Democrats proposed spending on Medicare would be restrained by $350 billion over a decade, and on Medicaid, by $50 billion.
Another $200 billion would come from defense, and an identical amount from a broad swath of government programs ranging from the parks to transportation.
Democrats also called for an overhaul of the tax code that would result in an individual rate of no higher than 35 percent and a scaling back of itemized deductions.
Republicans, too, favor tax reform. In his presentation, Toomey called for a top rate of 28 percent, which appears to require deeper cutbacks in the existing deductions than Democrats favor in order to yield $250 billion in higher revenue.
Aides in both parties requested anonymity to describe the GOP proposal, and they differed on some of the details.
Broadly speaking, however, the GOP plan would raise new revenues of at least $500 billion, both skimmed off the top as Congress completes an overhaul of the tax code and from proposals such as auctioning broadcast spectrum, raising Medicare premiums and increasing aviation security fees.
The plan also would cut spending by about $700 billion, mixing a less generous cost-of-living adjustment for Social Security beneficiaries with further cuts to agency operating budgets and curbs on the booming growth of Medicare and the Medicaid health care program for the poor and disabled.
Lower interest payments on the national debt would provide the remaining savings.
Deficit Panel Members Seeking to Avoid Blame
By ROBERT PEAR
Published: November 8, 2011
WASHINGTON — Members of a Congressional panel on deficit reduction are no longer trying just to solve the nation’s fiscal problems. Some are desperately trying to avoid blame for the possible collapse of a process concocted by Senate leaders to break an impasse between those who want to raise taxes and those who would prefer to cut spending by focusing on entitlement programs.
After weeks of calculated silence, the two parties have begun shoving out rival versions of the same message: If the joint committee cannot reach agreement, the other side will be responsible.
Republicans, long opposed to tax increases, said Tuesday that they might allow $250 billion to $300 billion of additional tax revenue as part of a deal to shave $1.2 trillion from federal deficits over the next 10 years.
Democrats were quick to dismiss the offer because, they said, it came with a proposal that would permanently reduce individual income tax rates, including those for the most affluent Americans — a group that Democrats would like to see contribute more to deficit reduction.
Members of both parties said Tuesday that they saw a glimmer of hope that the panel could strike a deal and vote on its recommendations by the statutory deadline of Nov. 23, just two weeks off.
Senator John Kerry, Democrat of Massachusetts and a member of the committee, said that the latest Republican overture represented a “slight change.”
“I would not characterize it as substantial yet, but it is a change,” he said. “We have some distance to travel.”
Democrats said they worried that the ideas floated by Republicans like Senator Patrick J. Toomey of Pennsylvania might be largely a public relations gesture, to deflect Democratic complaints that Republicans were responsible for the current impasse.
Some of the new revenue under the Republican proposal would come from limiting tax breaks that primarily benefit upper-income households. Some would come from other sources like fees charged for government services, higher Medicare premiums for high-income people, sales of federal lands and surplus federal property, and perhaps oil drilling in part of the Arctic National Wildlife Refuge, a proposal that has failed to win broad Democratic support over the years.
Democrats pointed to the nontax revenue as evidence that Republicans were still not serious.
“The Republicans’ insistence on no new taxes was not working,” said a Democratic senator close to the negotiations. “So Republicans have now offered a tiny bit of tax revenue. To be serious, they must offer much more.”
A Democratic aide close to the talks said the latest Republican proposal was unacceptable because it would lower the top tax rate on the most affluent Americans to 28 percent in 2013, from the current 35 percent. Under existing law, the rate is scheduled to rise to 39.6 percent in 2013.
“This plan would provide the very wealthiest Americans with one of the largest tax rate cuts ever,” the Democratic aide said. “It’s a shell game — a thinly veiled attempt to appear to put revenue on the table while simultaneously removing far more with massive tax cuts for wealthy Americans. This plan is not a solution that Democrats or middle-class Americans would ever be willing to accept.”
Another Democratic aide said the proposal would be “a windfall for millionaires.”
A Republican close to the talks said it was Democrats who had been intransigent, demanding tax increases as part of any deal.
The House will not approve a bill that raises tax revenue unless it also reduces tax rates, the aide said, adding, “We put tax revenues on the table, and Democrats don’t know what to do.”
Posted at 11:14 AM ET, 11/13/2011
Supercommittee hasn’t ‘given up hope,’ Hensarling says
By Felicia Sonmez
The co-chairman of Congress’s special debt “supercommittee” said Sunday that the panel’s 12 bipartisan members remain hopeful that they can reach a deal before their Nov. 23 deadline.
“We haven’t given up hope,” Rep. Jeb Hensarling (R-Texas) said on CNN’s “State of the Union.” “But if this was easy, the president of the United States and the speaker of the House would have gotten it done themselves.”
Deficit Panel Seeks to Defer Details on Raising Taxes
By ROBERT PEAR
Published: November 13, 2011
WASHINGTON — With a little over a week left to reach a deal, members of the Congressional deficit reduction panel are looking for an escape hatch that would let them strike an accord on revenue levels but delay until next year tough decisions about exactly how to raise taxes.
Under this approach, the panel would decide on the amount of new revenue to be raised but would leave it to the tax-writing committees of Congress to fill in details next year, well beyond the Nov. 23 deadline for the panel itself to reach an agreement. That would put off painful political decisions but ensure that the debate over deficit reduction stretched into the election year.
“There could be a two-step process that would hopefully give us pro-growth tax reform,” Representative Jeb Hensarling of Texas, the top Republican on the panel, said Sunday on the CNN program “State of the Union.”
Members of Congress and their aides said they were still skeptical that the panel could agree on a mix of spending cuts and revenue increases to reduce budget deficits by $1.2 trillion over 10 years, the minimum set by law.
If the panel falls short, a series of automatic cuts, split evenly between military and civilian programs, would take effect, starting in 2013. Some fear that such a failure could lead to the kind of stock market slide and loss of investor confidence that accompanied stalled efforts to raise the federaldebt limit earlier this year.
A recent proposal by Republicans on the panel, to raise $300 billion in tax revenue over 10 years, led to some optimism that the committee might at least come up with a partial deal that could reduce the amount of automatic cuts.
Senator Richard J. Durbin of Illinois, the No. 2 Senate Democrat, said the Republicans’ willingness to discuss higher tax revenue was “a breakthrough.” But as Democrats studied the offer, they found much to criticize.
Until now, the main obstacle to a deal was Republicans’ unwillingness to raise taxes and Democrats’ unwillingness to make significant cuts in the growth of Medicare,
Medicaid and Social Security without tax increases. To shave deficits by $1.2 trillion without raising revenue or touching entitlement programs could require deep cuts in domestic spending, the military or both.
On supercommittee, growing doubts about reaching a debt deal
Obama administration quietly bracing for debt supercommittee failure
By Anne E. Kornblut, Published: November 15
White House officials are quietly bracing for “supercommittee” failure, with advisers privately saying they are pessimistic that the 12-member Congressional panel will find a way to cut $1.2 trillion from the deficit as required.
In public, however, the official administration stance is that failure is not an option.
If the supercommittee can’t reach a deal . . .
Supercommittee members face rising pressure from all sides
A special-interest wishlist for the supercommittee
‘Secret farm bill’ primed for passage in debt deal
By Erik Wasson – 11/15/11 05:15 AM ET
Lawmakers on the House and Senate Agriculture committees are trying to write a new five-year farm bill through the supercommittee process.
The legislators are using the supercommittee to avoid what would be a more public, election-year debate in 2012, when the current farm bill expires and new legislation would be scheduled for writing, according to critics of the effort.
“We call it the secret farm bill,” said one environmental activist, who worries that if the lawmakers succeed, it will prop up U.S. farm payments through 2017.
War savings and debt reduction: Take two
By Lori Montgomery, Published: November 14
The congressional “supercommittee” is looking to count as budget savings as much as $700 billion that the nation no longer plans to spend on the wars in Iraq and Afghanistan over the next decade, an accounting gimmick that has drawn fire from both Democrats and Republicans.
In deference to that criticism, aides from both parties said the panel would not count war savings toward its primary debt-reduction goal of at least $1.2 trillion. Instead, they are considering using the savings to “pay for” other priorities, such as extending emergency unemployment benefits and a temporary payroll tax cut currently enjoyed by every American worker.
Budget analysts were appalled by the idea. Robert Bixby of the bipartisan Concord Coalition called war savings “the mother of all budget gimmicks.” But aides in both parties said an agreement to use war savings to offset the cost of urgent expenses could help build support for a broader accord on the debt, which is likely to require lawmakers to support politically painful spending cuts and tax increases.
“There is around $917 billion to be saved over the next 10 years from the overseas contingency account. And we ought to count that,” Rep. James E. Clyburn (D-S.C.), a supercommittee member, said on “Fox News Sunday.” “We ought to use that savings. . . to plow it into job-creation programs that would get people back to work, and paying taxes, and off of food stamps and off of unemployment.”
With a Thanksgiving deadline fast approaching, supercommittee members are still struggling toward a compromise on the broader package. Talks through the weekend focused on the issue of taxes, with Democrats pressing Republicans to up their offer to generate about $300 billion in new tax revenue over the next decade through a rewrite of the tax code that would lower rates but eliminate expensive deductions.
Republicans indicated a willingness to do so, aides said, but only in exchange for additional reductions to soaring Social Security and Medicare costs.
Gridlock on deficit panel looms over stock rally
BY DAVID K. RANDALL
AP BUSINESS WRITER
NEW YORK – Like the sequel of blockbuster horror movie, the debt ceiling may strike again.
In an echo from early August, a gridlocked bipartisan Congressional committee must find a way to agree on a deficit reduction plan by Nov. 23rd. Congress itself must then pass the bill, without changes, by Dec. 23rd.
If it doesn’t, $1.2 trillion in spending cuts will automatically take effect beginning in 2013. Analysts worry that the looming cutbacks, which are scheduled at time when the economy is expanding at an annual rate of just 2.5 percent, could knock the U.S. back into another recession.
That’s because the cutbacks wouldn’t be the only drag on the economy. If Congress isn’t able to agree on the deficit framework, there’s little hope they will extend stimulus measures like unemployment benefits, a payroll tax cut and Bush-era income tax cuts that have helped bolster consumer spending, said David Kelly, chief market strategist at JP Morgan Funds. That combination may halt the economy in its tracks, leading to more layoffs and weaker business confidence right when the unemployment rate is still stuck at 9 percent.
“Everyone’s attention has been focused on Europe lately, but this is a real issue that’s being ignored,” Kelly said.
For investors, that means that it could be another good time to get defensive. Analysts suggest raising cash, buying highly-rated corporate bonds, and increasing the holdings of health care, utilities and consumer staples companies that aren’t as dependent on a growing economy for profits.
This potential stumbling block comes as investors have otherwise been feeling pretty optimistic. The S&P 500 index has jumped 15 percent since Oct. 3, when it hit a low for the year, after Greece finally got a new financial rescue package in place and on encouraging signs of strength in the U.S. economy. The S&P 500 jumped another 1.9 percent Friday after Italy passed an economic reform that may help it avert a financial crisis.
“We’ve had two of the three big concerns in the market largely resolved over the last month,” said Mark Lamkin, head of Lamkin Wealth Management. “But the third is Washington, and there’s no telling what will happen.”
Some of those concerns are already playing out in the stock market. So-called defensive sectors have done better than the rest of the field, a sign that investors are still cautious. Healthcare companies in the S&P 500 are up 7 percent since the debt panel was announced in August. Utilities, meanwhile, have jumped 10.5 percent. The S&P 500 itself is up 5.4 percent over the same time. That’s a sign investors are putting a premium on reliable earnings.
The looming government cutbacks might be holding back the most defensive group of stocks around: weapons manufacturers. More than $500 billion of the automatic cuts would come from the military, and the rest from other areas of the federal budget. Defense companies Lockheed Martin and Northrop Grumman haven’t received the boost investors would normally expect after each company reported surprisingly strong quarterly results Oct. 26. Each company is up roughly 6.5 percent since the deficit panel was announced, only about a percentage point above the broad S&P 500 index.
Northrop Grumman CEO Wes Bush told analysts during a conference call that the company is readying itself for the possibility of broad cuts in government spending. “It’s certainly going to be a more challenging environment,” over the next year, he said.
Despite its 2.5 percent growth rate last quarter, the economy remains fragile. The Federal Reserve recently lowered its economic outlook for 2012. The central bank predicted that the economy will grow at a rate of about 2.7 percent next year. That is a full percentage point below a forecast from June, and below the 3 to 5 percent annual growth rate that is considered healthy. Economists at JP Morgan have a far gloomier forecast: 1.7 percent.
Few investors have much faith that Washington will pass the next deficit-cutting bill in time. Congress was barely able to reach an agreement to raise the government’s debt ceiling ahead of the Aug. 2 deadline. The possibility that the U.S. government could default on its debt and a subsequent downgrade by Standard and Poor’s that cut the nation’s credit rating for the first time sent financial markets in a tailspin.
The Dow Jones industrial average plunged 11 percent over the first six trading days of August. Yields on Treasurys, which move in the opposite direction of their price, fell to the lowest since the 1950s.
Lamkin, the wealth manager, said he is already preparing for the deficit panel to stall. He’s recently moved more of his client’s money to cash. He’s staying away from U.S. Treasury debt because a massive rally has already pushed the yield on the 10-year note down to a puny 2.06 percent. Instead, he’s buying intermediate corporate bonds from blue chip companies like International Business Machines Corp. and Microsoft Corp. that yield more than 3 percent.
“We’re hoping that it’s not going to come to this, but this past summer showed that we have to be ready for the worst,” he said.
Supercommittee: Boehner calls tax plan fair offer
Posted: Nov 15, 2011 3:42 AM ESTUpdated:
Nov 15, 2011 10:03 PM EST
By ANDREW TAYLOR and DAVID ESPO
WASHINGTON (AP) – House Speaker John Boehner publicly blessed a Republican deficit-reduction plan Tuesday that would raise $300 billion in additional tax revenue while overhauling the IRS code, bucking opposition by some GOP presidential hopefuls and colleagues wary of violating a longstanding point of party orthodoxy.
Boehner, the top Republican in Congress, spoke as time grew perilously short for agreement by the deficit-fighting “supercommittee.” The panel has until a week from Wednesday to vote on any compromise, but several officials said that in reality, perhaps as little as 48 or 72 hours are available to the six Republicans and six Democrats.
Prospects for a deal got even dimmer Tuesday evening as the top Republican on the debt panel, Rep. Jeb Hensarling of Texas, said his party’s negotiators “have gone as far as we feel we can go” on tax hikes. He said on the CNBC cable network that the panel is “somewhat stymied.”
Hensarling’s counterpart, Sen. Patty Murray, D-Wash., said her party is still waiting on a “credible offer” from Republicans with larger tax increases.
The movement by Boehner and others on taxes is important, but his endorsement does not mean all Republicans will follow him or that a deal is in sight. Republicans have been unified for two decades in opposition to higher taxes, while Democrats on the supercommittee insist on additional revenue before they will agree to cuts in benefit programs like Medicare as part of a compromise.
The speaker said that the plan, outlined a week ago to Democrats on the committee, was “a fair offer.” Adding tax reform would generate economic growth, he said, speaking as the supercommittee groped uncertainly for a compromise to reduce red ink by $1.2 trillion or more over a decade.
Any deal must be certified by the nonpartisan Congressional Budget Office as meeting the $1.2 trillion target, circulated to lawmakers and then posted publicly before the committee takes formal action. Failure to act would trigger $1.2 trillion in automatic deficit cuts in 2013 that both sides say they want to avoid.
The full committee hasn’t met in several days, but various subgroups have been in near constant contact.]
More than deficit reduction is at stake, one year into an era of divided government.
Democrats are hoping to add elements of President Barack Obama’s jobs legislation to any deficit-cutting deal, including extensions of a Social Security payroll tax cut and unemployment benefits that are due to expire at the end of the year. A comprehensive rewrite of farm programs may hang in the balance, too, and lawmakers also must pass legislation to assure sufficient funds to reimburse doctors who treat Medicare patients.
As the pace of private talks intensifies, the two sides vie publicly for the high ground in public opinion.
“I am still hopeful that a few Republicans will put their country first and come to us with a credible offer with real revenue,” Sen. Patty Murray, D-Wash., co-chair of the supercommittee, told reporters as she emerged from a late-afternoon meeting.
Earlier, the Republican Senate leader, Mitch McConnell of Kentucky, said GOP members on the committee outlined a proposal several days ago and have yet to receive a response from Democrats. “It’s been a long week, waiting for a counter-proposal,” he said.
The twin issues of taxes and benefit programs have long been stumbling blocks in budget negotiations.
No-tax oath begins to chafe in debt discussions
November 15, 2011|By Joelle Farrell, Inquirer Staff Writer
A quarter of a century ago, antitax crusader Grover Norquist began asking politicians to pledge to “oppose and vote against tax increases.” Pledge they did, from state capitals to Capitol Hill.
A few, such as South Jersey’s Rob Andrews, were Democrats. For Republicans, the no-tax oath became an article of faith, second only to filing papers for candidacy.
Norquist’s Americans for Tax Reform group now lists 238 House members, 41 senators, and 13 governors (including Gov. Corbett) among the signers.
But the bonds between the pledge and some of its signers could be loosening.
A growing number of lawmakers, including Andrews, say they no longer feel bound by the pledge. Others have tried to wriggle out of it with wishy-washy words or tacit acknowledgments that a tax-neutral solution to the economy’s relentless woes may not work.
“I still maintain that increasing taxes on individuals or businesses during an economic downturn is not the way to go,” U.S. Rep. Jon Runyan (R., N.J.) said last week in a statement. “Having said that, we are facing unprecedented economic challenges.”
The pledge has drawn increased scrutiny as Congress’ 12-member “supercommittee” nears its Nov. 23 deadline for crafting a plan to reduce the deficit by at least $1.2 trillion in 10 years.
Amid talk of a possible impasse, 100 House members, including 40 Republicans, urged the panel to show “political courage” and work toward a bipartisan accord.
“All options for mandatory and discretionary spending and revenues must be on the table,” the Nov. 2 letter read.
Antitax groups lashed out immediately.
“In Washington-speak, this is code for raising taxes,” Americans for Prosperity declared in a blog post.
The signers of the offending Nov. 2 letter included three Pennsylvania congressmen – Pat Meehan of Delaware County, Mike Fitzpatrick of Bucks, and Charlie Dent of the Lehigh Valley.
All three had also signed the pledge.
Though Meehan does not think raising taxes during a deep recession “is a good idea or will create jobs,” his spokeswoman, Maureen Keith, noted in an e-mail that the letter he and 99 others signed says “all options for mandatory and discretionary spending and revenues must be on the table.”
Asked whether “all options” include raising taxes, Keith sent no reply. (Neither Fitzpatrick nor Dent responded to requests for comment.)
Experts say the wriggling shows lawmakers are mindful of the public’s frustration with partisan gridlock – especially as major elections near.
“I think they’re very, very conscious of the fact that they’re going to be up in 2012, and they do not want to be seen as inflexible,” said Ross Baker, a Rutgers University political scientist.
As the deadline for deficit-cutting nears, a few signers have done more than wriggle.
“We’re on track to owe $20 trillion, and to be beholden to some pledge when the future of the country is at stake is kind of silly,” U.S. Rep. Steven LaTourette (R., Ohio), who signed in 1994, told the Christian Science Monitor.
Even LaTourette’s ally and fellow Ohioan, House Speaker John A. Boehner, brushed off Norquist as “some random person” when reporters prodded him earlier this month to discuss Norquist’s influence.
Andrews, a Camden County Democrat, was at the end of his freshman term in Congress when he signed the pledge in 1992. On Thursday, he said in an interview that he had felt 1991′s income-tax increases “were harmful and not going to do us any good at that time.”
He also said he believed the pledge committed him for only a single term.
When word of Andrews’ latest views got out, Norquist slammed him on Twitter.
“Andrews: The tax pledge is promise to oppose tax hikes as long as one is in congress. Not until you change your mind,” Norquist wrote Tuesday. He said that had been spelled out “in Questions and Answers attached to pledge you signed.”
Andrews fired back: “@GroverNorquist wants us 2read fine print. I say – read the Constitution! lets uphold the national interest, not his agenda.” Asked for Norquist’s comments on all this, spokesman John Kartch referred a reporter to Norquist’s recent remarks to the Wall Street Journal: that the idea of the pledge lasting only one term was “the silliest argument I’ve ever heard,” and that a candidate “who says, ‘I’m not going to raise taxes on you, please vote for me’ – and then keeps his word – is a good thing, not a bad thing.”
To be sure, Norquist’s backing remains “something that a lot of GOP legislators seek,” said political scientist Chris Borick of Muhlenberg College. “But they also have to seek middle ground on a number of issues that the public is very much interested in having practical solutions for.”
Borick cited voters’ rejection of several conservative ballot issues on Tuesday.
“The middle is speaking a little louder” than in 2008 or 2010, he said. “2012 might be a place where the extremes are out of fashion and people are looking for pragmatic, reasonable options – and sometimes that means bending.”
GOP supercommittee members’ tax plan gives party an identity crisis
By Peter Wallsten, Published: November 16
Growing Republican support for raising taxes to help reduce the deficit has prompted a GOP identity crisis, sparking a clash within the party over whether to abandon its bedrock anti-tax doctrine.
Tensions have mounted in recent days as two of the GOP’s most fervent anti-tax stalwarts on Capitol Hill — Sen. Patrick J. Toomey (Pa.) and Rep.Jeb Hensarling (Tex.) — have lobbied party colleagues behind the scenes to forgo their old allegiances and even break campaign promises by embracing hundreds of billions of dollars in tax hikes.
The two conservative lawmakers have pushed the increases as part of their work on the bipartisancongressional “supercommittee” tasked with finding at least $1.2 trillion in deficit reductions by a Thanksgiving deadline. Their plan, which also addresses entitlement spending, would generate at least $300 billion in new tax revenue over the next decade by overhauling the tax code to lower rates but also eliminate deductions and loopholes.
Their work has been met with a furious backlash as fellow conservatives inside and outside Congress expressed amazement that two of their biggest allies appear now to be foes.
“We’ve not had a conversation like this within the party in two decades,” said Rep. Patrick T. McHenry (N.C.), who on Wednesday gathered signatures from about 70 House Republican colleagues for a letter to the supercommittee leadership, calling any tax increase “irresponsible and dangerous to the health of the United States.”
Describing Hensarling as a “mentor,” McHenry added: “It’s a very tough situation.”
The conservative group Americans for Prosperity, which has fought taxes, began a campaign targeting 40 House Republicans who have expressed an openness to new taxes. The group invited constituents in Virginia and Florida to call in to telephone town hall meetings Wednesday night and purchased radio ads in five states charging that the members “don’t get it” when it comes to tax policy.
Critics say that giving any ground on taxes would violate party doctrine that has not been challenged since President George H.W. Bush broke his “read my lips” pledge as part of a 1990 budget deal.
Although it’s not clear how many Republicans are willing to raise taxes, the numbers have been growing in the House and Senate. Activists say they fear that the presence of rock-ribbed conservatives in that camp and support in the business community for a deal of some sort could be spurring widespread defections.
More Republicans moved Wednesday to push their party toward accepting new taxes — putting the issue in historic terms.
“This is about more than money,” said Sen. Alexander Lamar Alexander (Tenn.), a member of the Senate’s GOP leadership team. “It’s about whether the president and the Congress can competently govern, about whether we can face up to the biggest problem facing our country and, working together, can we solve that problem?” He added that both parties “need to put more on the table and get a result.”
Lawmakers urge supercommittee to ‘go big’ on deficit reduction
By William Branigin, Lori Montgomery and Anne E. Kornblut, Published: November 16
A bipartisan group of lawmakers from both houses urged the deficit-reduction supercommittee Wednesday to “go big” as it nears a deadline to avoid mandatory across-the-board cuts, telling the panel it has significant congressional support for a deal that would cut the deficit by about $4 trillion.
But Democrats and Republicans on the supercommittee later held separate meetings amid mounting pessimism that the 12-member panel would be able to reach an agreement.
Posted on Wednesday, November 16, 2011
Big bipartisan group of lawmakers pushes debt-panel to aim high
By David Lightman | McClatchy Newspapers
WASHINGTON _ With the deadline for a supercommittee deficit-reduction deal closing in, more than 150 members of Congress from both political parties made a renewed push Wednesday for a $4 trillion package.
But that doesn’t appear likely to happen, since the Joint Select Committee on Deficit Reduction is struggling even to come up with its mandated goal of at least $1.2 trillion in deficit reduction.
Senate Republican Conference Chairman Lamar Alexander of Tennessee urged the panel members to compromise.
“This is about more than money. It’s about whether the president and Congress can competently govern,” Alexander said.
With a week to go before they must vote, lawmakers on the supercommittee engaged in another day of private meetings and public bickering.
Co-chairman Rep. Jeb Hensarling, R-Texas, said he’d be willing to consider morerevenue, but not until Democrats offered more serious steps to cut entitlement programs such as Medicare.
“What I’ve had yet to see is a (plan) that fundamentally solves the problem,” he said, adding that he would not rule out any option. Democrats remained huddled in private meetings discussing strategy.
If the 12-member panel of six Democrats and six Republicans does not succeed, or Congress rejects its proposals, automatic across-the-board spending cuts, half from defense and half from domestic programs, would be triggered starting in 2013. Social Security and programs for lower-income people would be exempt, and Medicare cuts would be limited to providers, not beneficiaries.
The bipartisan coalition, which includes some leaders from both parties, is trying to give the dealmakers a push. At least 45 senators and 102 members of the House of Representatives pledged support for the bigger goal. Any package needs 51 Senate and 218 House votes to succeed.
“The time is now for the supercommittee to be brave and go big,” said Rep. Heath Shuler, D-N.C., one of the effort’s organizers.
“There’s no more time for partisan finger-pointing,” added Rep. Mike Simpson, R-Idaho. “Frankly, the American people no longer have the stomach for it.”
They offered no specifics but pointed to recommendations from previous bipartisan debt panels that urged a combination of higher taxes and spending reductions.
Among the Capitol Hill leaders offering support was House Minority Whip Steny Hoyer, D-Md.
“We want them to know that there is a large and significant number of us in both chambers who want such a deal and are ready to give it a fair shot,” he said.
The supercommittee aims to have recommendations ready by Monday, so that the nonpartisan Congressional Budget Office can analyze them and make sure the plan meets the deficit-reduction targets set by law last summer. The committee would then have until Nov. 23 to vote.
If a panel majority approves its plan, Congress will have until Dec. 23 to vote on it. The most prominent Republican proposal would cut about $1.5 trillion over 10 years. It would raise $500 billion to $600 billion in new revenues; $250 billion would come from changes in taxes. Individual rates would drop, with the top rate, now 35 percent, dipping to 28 percent, while many deductions would be limited.
Hensarling said Republicans would be willing to negotiate, but not until Democrats propose bigger entitlement savings.
“I’m not going to negotiate against myself,” he said.
One major Democratic plan would save $2.3 trillion, including $1 trillion in new revenues and $400 billion in Medicare and Medicaid cuts. Republicans are unenthusiastic about it.
Proposals appear to be constantly changing. Top congressional leaders have been involved in strategy sessions, and committee members have been meeting at times in small groups.
“Many of us continue to be optimistic,” said Rep. Xavier Becerra, D-Calif., a committee member. He said there were “any number of micro-discussions taking place.”
Senate Majority Leader Harry Reid, D-Nev., was less upbeat.
“I was hoping there would be a lot of handholding and hugs and pats on the back and we’d be headed off to Thanksgiving,” he said Tuesday. “But at this stage, we’ve seen a few arm locks” and “headlocks.”
Hensarling warned against drawing any conclusions from the gossip coming out of the private talks.
“Clearly, we are approaching the stroke of midnight,” he said. “I’m not giving up hope until that stroke of midnight.”
Capitol Hill Democrats, Republicans far apart on deficit deal as deadline looms
By Associated Press, Published: November 16
WASHINGTON — As the nation’s debt soared past $15 trillion, congressional Republicans and Democrats approached stalemate Wednesday in a yearlong assault on federal deficits, stymied still by politically charged disagreements over taxes and the future of enormously expensive government benefit programs.
The talks at a standstill, Democratic officials familiar with the work of Congress’ debt-reduction supercommittee disclosed they had floated a secret counteroffer late last week to generally accept a Republican framework for a $1.5 trillion compromise, while differing on numerous key details.
Democrats signaled a willingness to cut spending by $876 billion, including $225 billion from Medicare and $50 billion from Medicaid, these officials said, and raise tax revenue by $400 billion, far less than they had earlier demanded.
They also recommended using $700 billion in unspent funds from the wars in Iraq and Afghanistan for a $300 billion jobs program along the lines President Barack Obama wants, plus steps to protect the upper middle class from the alternative tax and extending financing for doctors who treat Medicare patients.Republicans acknowledged receiving the offer but rejected it for several reasons, including because it would have permitted Bush-era tax cuts to expire. The Democratic revenue package would have eliminated unspecified tax breaks but not reformed the entire tax code.
“This particular conversation was a step backwards because it would lock in the largest tax hike in history — at least $800 billion — and then add an additional $400 billion in job-killing tax hikes without pro-growth tax reform, plus more than $300 billion in ‘stimulus’ spending,” said Michael Steel, spokesman for House Speaker John Boehner, R-Ohio.
The supercommittee has until Nov. 23 to approve legislation that cuts future deficits by at least $1.2 trillion over a decade. Failing that, automatic spending cuts totaling that amount would take effect beginning in 2013. That’s a result that lawmakers on both sides of the political divide — particularly defense hawks — say they oppose.
In debt talks’ new phase, blame game overshadows fiscal blueprint
By Lori Montgomery and Paul Kane, Published: November 16
Negotiations over the national debt entered a troubling new phase Wednesday on Capitol Hill as lawmakers appeared to spend more time trading blame for the impasse than in talks aimed at developing a blueprint to reduce borrowing.
With a Thanksgiving deadline getting closer, Democrats on the bipartisan “supercommittee” revealed details of a plan they offered to Republicans late last week that would have cut spending by nearly $900 billion over the next decade in exchange for just $400 billion in new taxes.
The proposal represents an apparent shift from earlier Democratic debt-reduction proposals, which demanded as much as $1.3 trillion in new taxes through 2021. It also appeared to mark a big step toward the latest Republican position, which called for about $300 billion in new taxes.
But Republicans said the offer was a ruse that included at least $800 billion in new taxes from the expiration of the George W. Bush-era tax cuts in January.
“It would lock in the largest tax hike in history — at least $800 billion — and then add an additional $400 billion in job-killing tax hikes without pro-growth tax reform,” said Michael Steel, a spokesman for House Speaker John A. Boehner (R-Ohio). In that regard, Steel said, the offer was “a step backward” that Republicans summarily rejected.
Democrats said the proposal did not address the Bush tax cuts.
Democrats and Republicans on the supercommittee said talks were nonetheless continuing in an effort to identify at least $1.2 trillion in savings before next Wednesday’s deadline. But it was unclear which of the panel’s 12 members were engaged in those talks and whether they had any chance of succcess.
“We are still working very hard to get to a fair and balanced deal. It’s what the country expects,” said Sen. Patty Murray (Wash.), the supercommittee’s Democratic co-chairman. “It’s the challenge that we have. We believe we can get there.”
Members of the panel and their aides talked late into the night Tuesday and reassembled in separate partisan huddles Wednesday morning. But no meetings were scheduled with members of both parties present, and all sides acknowledged that no deal was at hand.
God and the supercommittee
With the congressional supercommittee tackling the federal debt crisis apparently gridlocked, Senate Chaplain Barry C. Black on Thursday tapped a higher power.
Opening the chamber’s session in the morning, he asked for God’s blessings on lawmakers, as he usually does — and then asked for the Almighty to shed some providential wisdom particularly on the 12 members of the committee struggling to lower the future debt increases by $1.5 trillion.
WASHINGTON — Sen. Rob Portman said today that if a bipartisan congressional committee cannot meet a Wednesday deadline to come up with a plan to cut the deficit by as much as $1.5 trillion, he is open to altering part of the law that would impose mandatory $500 billion cuts to the Department of Defense.
His comments signaled the first time that Portman, a key Republican member of the 12-member “super committee,” has publicly left room for the possibility that the committee won’t reach its goal.
Deficit gridlock looms, supercommittee deadlocked
By David Espo and Andrew Taylor
Associated Press / November 18, 2011
WASHINGTON—Deadline nearing, the deficit-reduction talks in Congress sank toward gridlock Friday after supercommittee Democrats rejected a late Republican offer that included next-to-nothing in new tax revenue. Each side maneuvered to blame the other for a looming stalemate.
The panel faces a deadline of next Wednesday, the day before Thanksgiving, and lawmakers on both sides stressed they were ready to meet through the weekend in a last-ditch search for compromise.
But there was little indication after a day of closed-door meetings that a breakthrough was likely, both Democrats and Republicans emphasizing long-held political positions.
“Where the divide is right now is over taxes, and whether the wealthiest Americans should share in the sacrifices,” said Washington Sen. Patty Murray, the Democratic co-chair of the panel.
But Michael Steel, a spokesman for House Speaker John Boehner, said Republicans had offered “a balanced, bipartisan plan – the fact that it was rejected makes it clear that Washington Democrats won’t cut a dime in government spending without job-killing tax hikes.”
While prospects for a deal faded, House Democrats checked a Republican attempt to pass a balanced budget amendment to the Constitution. The vote was 261-165, or 23 shy of the two-thirds majority required. GOP lawmakers voted overwhelmingly in favor, while Democrats generally opposed it, sealing its doom.
The vote on a noisy House floor contrasted to the secretive proceedings inside the supercommittee, a panel that projected optimism when it began its quest for a deficit deal late last summer but has yet to come to any significant compromise.
Republicans disclosed during the day they had outlined an offer on Thursday for about $543 billion in spending cuts — leaving Medicare, Medicaid and Social Security untouched — and $3 billion in higher tax revenue.
Most if not all of the recommended savings were items that Democrats have agreed to in earlier talks, but only, party officials said, on condition they part of a larger deal in which Republicans agreed to additional tax increases.
Democrats have long demanded that Republicans agree to significant amounts of higher taxes on the wealthy as part of any deal, and they quickly rejected the offer, according to officials in both parties.
It was unclear where the talks would turn next, but the GOP proposal suggested the discussions had effectively moved into a range of savings far below the $1.2 trillion the committee has been seeking.
It also appeared Republicans were jettisoning a plan for $300 billion in higher tax revenue, an offer that had exposed internal GOP divisions when it was presented two weeks ago. It also has failed to generate momentum for a compromise among Democrats.
If the panel fails to reach agreement, $1.2 trillion in automatic spending cuts are to take effect beginning in 2013, a prospect that lawmakers in both parties say they want to avoid.
That is particularly true among defense hawks, who argue that the Pentagon cannot sustain the estimated $500 billion in cuts that would be required on top of the $450 billion already in the works.
In a letter to Murray and Rep. Jeb Hensarling, R-Texas, the GOP chairman of the supercommittee, the head of the House Armed Services Committee warned of “immediate, dire and in some cases irrevocable” damage to the nation’s military. “Our ability to respond to national security crises or humanitarian disasters would be disrupted,” added Rep. Howard P. (Buck) McKeon, R-Calif.
Republicans familiar with the GOP plan said it included $543 billion in spending cuts, fees and other non-tax revenue, as well as the $3 billion corporate jet provision. There also would be $98 billion in reduced interest costs.
Officials familiar with the offer said it would save the government $121 billion by requiring federal civilian workers to contribute more to their pension plans, shave $23 billion from farm and nutrition programs and generate $15 billion from new auctions of broadcast spectrum to wireless companies.
It also would claim about $100 billion in savings from Pentagon civilian personnel costs and another $35 billion by increasing the fee that mortgage giants Fannie Mae and Freddie Mac charge lenders to guarantee repayment of new loans. The fee increase would add $15 a month to the monthly cost of an average new mortgage.
The per-ticket security fee to pay for Transportation Security Administration operations at the nation’s airports would increase, and $18 billion would come from savings within Postal Service accounts.
‘Supercommittee’ at impasse as deadline approaches
By Friday evening, a sense of gloom enveloped the Capitol, which was nearly completely vacant as members of the House and Senate returned to their states for a week-long Thanksgiving break.
Deficit Panel Faces a Rift Over Who Ought to Pay
By ANNIE LOWREY and ROBERT PEAR
Published: November 19, 2011
WASHINGTON — The second-ranking Senate Republican declared Saturday that the work of a special Congressional committee on deficit reduction was all but over, and said efforts to strike a bipartisan deal had been worthy but unavailing.
As he emerged from his office in the Capitol, the Republican, Senator Jon Kyl of Arizona, a committee member, spoke of the panel in the past tense, using sober words to describe a seemingly unsuccessful 10-week quest for a compromise. Asked to describe the focus of a possible compromise, Mr. Kyl said, “I’m not sure there is one.”
Chronology of Failure
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- Sesquicentennial of the Civil War
- Sgt Dennis Weichel and Afghanistan
- Snow Scenes around the world
- Soldier Stories
- Spirit in the Sky Classic Rock
- SSG Johnson surprises Skylar – HAPPY
- State by State casualties Afghanistan
- State of our Democracy
- State of the Economy
- Stories about the After life Service is the currency of Salvation
- Stories World War I and II
- Supercommittee FAILure
- Syrian Spring updated
- Tea Party Hearty
- Ten Conditions for Change
- Ten Conditions for Change I
- Ten Conditions for Change II
- The 911 Conspiracy
- The Connected Class con
- The FED is private
- The Great Helmsman
- The Know Nothing President-cy
- The Military Industrial Complex
- The Rich Get Richer
- There are the Jobs
- This Is EVIL
- Trump for President
- Truth to power The People
- Tsar Putin the Terrible
- Tunisian Revolution
- UNDERWATER PHOTOGRAPHY
- Unfair Competition equals Free Trade
- Vanishing America
- Veterans Aging Prematurely
- Veterans Issues
- Washington’s Farewell Address
- Waterloo and Trafalgar
- WEAKest President in History
- What About Hillary?
- What about Scientology
- What Does Romney Stand For
- What I know From Experience
- What I wrote in 2008
- What President Morsi Really Thinks
- What you think about Obama
- What you think about Romney
- Where is Obama?
- who cares gr$$dy NFL
- Why Americans hate their government
- Why Romney Lost
- Why the Arab Spring is important
- Wicked Winter Weather
- Wisdom about Fools
- World War Two obituaries
- Xi Jinping and China
- Xi Jinping new leader in China
- Zero Some Game