Deficit gridlock looms, supercommittee deadlocked

Sen. John Kerry, D-Mass., mem­ber of the Joint Select Com­mit­tee on Deficit Reduc­tion, often called the Super­com­mit­tee, speaks to reporters fol­low­ing a closed-door meet­ing on Capi­tol Hill in Wash­ing­ton Fri­day. (Asso­ci­ated Press | Manuel Balce Ceneta)

ANDREW TAYLOR

DAVID ESPO

Asso­ci­ated Press

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.

Posted by AP News on Nov 18 2011. You can follow any responses to this entry through the RSS Feed. Comments can be made below.