Amid a flurry of counter-proposals from the deficit-reduction committee, House Speaker John Boehner (R-Ohio) on Thursday rejected a Democratic offer to slash $3 trillion from future debts because it contained significant tax increases.
While GOP negotiators offered a slimmer package of savings with virtually no tax hikes, Boehner said the Democratic request for $1.3 trillion in new tax revenue was a non-starter and gave his most pessimistic outlook to date that the so-called “supercommittee” would achieve its deficit target by its Thanksgiving deadline.
“I don’t think it’s a reasonable number,” the speaker said of the tax proposal, suggesting it was time “to get serious” in order to avoid an automatic trigger of $1.2 trillion in spending cuts if the panel does not reach an accord. “I’m not surprised that we’re having some difficulty, because this isn’t easy. It’s going to be very hard.”
The supercommittee, tasked with finding a minimum of $1.2 trillion in savings by Nov. 23, reached a new level of urgency this week as the calendar drew closer to the deadline. The leaks of the counter-offers revealed the first signs of the work that has been going on mostly behind closed doors for the past seven weeks.
The evenly divided 12-member panel huddled again Thursday morning, followed by a separate meeting later of the six Democrats.
Some lawmakers and aides saw the public battle as an omen for partisan gridlock as each side positioned itself to blame the other for failure. Some saw the kick-start of what will now become the furious final three weeks of talks, with each side now knowing the outer limit of the other’s position. Still others saw it as the inevitable sort of leak that is commonplace on Capitol Hill despite this group’s previous leak-proof record.
Democrats said Thursday they had put forward a good-faith offer that included legitimate savings against the swelling federal debt and included a package of more than $300 billion in stimulus for the sagging economy. “We’ve always said there are two important things—get the economy moving and have jobs and to have a balanced approach,” said committee member Rep. Chris Van Hollen (D-Md.), as he emerged from the Democrats’ strategy session. “Any package needs to be judged on that test.”
Democrats on Tuesday had presented a plan to achieve $3 trillion in deficit savings over the next decade, cutting as much as $500 billion from Medicare, Medicaid and other health programs and raising $1.3 trillion in new revenue.
Boehner on Thursday criticized the health-care savings, particularly $50 billion from Medicare.
“Let’s understand, over the next 10 years we’re going to $10 trillion on Medicaid,” he said. “I just think there’s a lot more room there to help find common ground.”
Republicans, instead, have offered more than $2 trillion in savings over 10 years, highlighted by nearly $700 billion in spending reductions to Medicare and Medicaid. According to lawmakers and aides familiar with the GOP proposal, it includes an offer of more than $600 billion in savings from new tax revenue. But the two sides are in deep dispute because Republicans want to count these increased receipts based on the expectation of surging economic growth — a standard that neutral budget observers have declined to use in the past.
The instant partisan rancor sparked by the leaked details of the two plans was a familiar retread of past rounds of deficit reduction talks, including a weeks-long discussion in the summer as Boehner and President Obama sought a “grand bargain” along the lines of what Democrats offered Tuesday.
Boehner eventually walked away from that deal over Obama’s insistence of $1.2 trillion in new tax revenue, but the president also faced a revolt among his own liberal supporters. Those party liberals reacted bitterly to this week’s news that the supercommittee’s Democrats were pushing similar offerings, even though the proposal was contingent on increased taxes on the wealthy and some corporations.
“We continue to dangle the carrot of Social Security and Medicare,” said Rep. Raúl M. Grijalva (D-Ariz.). “They’re not biting. All it does is call into question where our party stands on those issues.”
If a bare majority of the panel agrees on a debt-reduction plan, it would move through Congress with special procedural protections against any amendment or filibuster in the Senate. If the committee fails, across-the-board reductions will be triggered in January 2013 and fall heavily on the Pentagon. This has prompted House GOP leaders to begin a series of intense education sessions for rank-and-file lawmakers, urging them to support whatever deal the committee reaches, considering it better than the deep cuts to the national security budget.