For Debt Committee, No Final-Hour Deal Apparent

Nov 21, 2011
Originally published on November 21, 2011 2:53 pm

Monday is the last day the congressional supercommittee can reach a deficit-reduction deal and still make its Wednesday deadline. The legislation has to be publicly available for 48 hours before a vote, and the clock is ticking. But instead of announcing an agreement, the committee is widely expected to admit it has failed.

The supercommittee was created with the hope that 12 members of congress, six democrats and six republicans, sitting together in a room could accomplish what so many others could not. The goal was $1.2 trillion in deficit reductions over a decade, but it appears that the supercommittee wasn't so super after all.

Its kryptonite: fundamental differences between the two parties over taxes and entitlements, though mostly it was about taxes.

"There is one sticking divide, and that is the issue of what I called shared sacrifice," committee co-chairwoman Sen. Patty Murray, D-Wash., said on CNN's State of the Union Sunday.

That is, if programs like Medicare and Medicaid are going to be on the table, Democrats on the committee believe the Bush-era tax cuts for the highest income earners should be allowed to expire.

"The wealthiest of Americans — those who earn over a million dollars every year — have to share, too," Murray said. "And that line in the sand, we haven't seen any Republicans willing to cross yet."

Offers Made

About a week and a half ago, the Republican side did offer $300 billion in increased revenue, but only if the Bush-era tax cuts were made permanent, with upper-income tax rates actually going down even further. Democrats weren't willing to accept the rate cut.

Meanwhile, Republicans say Democrats weren't willing to give enough on reforms to entitlement programs like Medicare and Medicaid.

"Nothing new came out of this. From the Democratic side, it was the same thing: raise taxes, pass the president's jobs bill, no entitlement reform," Sen. Jon Kyl, R-Ariz., said on NBC's Meet the Press. "On the Republican side, you had the one true breakthrough, and that was this new concept of tax reform, which can generate revenue."

Democratic Sen. John Kerry of Massachusetts was also on NBC. He said Democrats offered "huge, hard, tough, horrible" reductions in programs they hold dear.

"We put every single sacred cow on the table," Kerry said. "They know that they could have had many things that a lot of us hate to even talk about publicly."

But in exchange, Democrats wanted tax changes the Republicans weren't willing to give.

A Missed Opportunity

"Each side was prepared to offer more if they thought the other side was operating in good faith," said Alice Rivlin, a senior fellow at the Brookings Institution who served as budget director for President Clinton.

Rivlin has served on two bipartisan commissions that came up with deficit-reduction plans, and she advised the supercommittee. She calls the apparent failure of the committee a disappointment and a missed opportunity.

"Each side distrusted the other. The Democrats were afraid to offer serious entitlement cuts because they thought the Republicans will just take that and not give any revenues," she said. "The Republicans said if we offer serious revenues, the Democrats will just take that and they're not serious about the entitlement cuts."

So members of the supercommittee spent Sunday morning positioning themselves to make the other guy look bad, instead of putting the finishing touches on a grand deficit-reduction deal — and it all came back to taxes.

"It's not about assigning blame, but we are unaware of any Democratic offer that didn't include at least a trillion-dollar tax increase on the American economy," Texas Republican Rep. Jeb Hensarling said on Fox News Sunday.

Democrat Patty Murray blamed a Republican anti-tax pledge to the group Americans for Tax Reform.

"As long as we have some Republican lawmakers who feel more enthralled with a pledge they took to a Republican lobbyist than they do to a pledge to the country to solve the problems, then this is going to be hard to do," she said.

Everyone went into this knowing that bridging the partisan divide was going to be hard. It appears, with less than a year until the election, it was just too hard, even for a supercommittee.

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LINDA WERTHEIMER, HOST:

It's MORNING EDITION from NPR News. I'm Linda Wertheimer.

STEVE INSKEEP, HOST:

And I'm Steve Inskeep.

To understand the latest development on Congress's deficit reduction committee, it helps to recall how we got here.

WERTHEIMER: Over the summer, Republican lawmakers insisted on big deficit reductions. Their battle with Democrats took the nation to the brink of defaulting on its debts. The Fed chairman said the battle probably disrupted the economy. And afterward, Standard & Poor's downgraded U.S. debt.

INSKEEP: A bitter compromise established a congressional committee to find bipartisan debt reductions. That was the solution lawmakers approved for a problem that they defined as vital to our children and grandchildren.

WERTHEIMER: Today is the deadline for the so-called supercommittee to announce their plan. But it's widely expected the committee will admit it has failed.

NPR's Tamara Keith reports.

TAMARA KEITH, BYLINE: The supercommittee was created with the hope that 12 members of Congress, six Democrats and six Republicans, sitting together in a room could accomplish what so many others could not. The goal was $1.2 trillion in deficit reductions. But it appears the supercommittee wasn't so super, after all. Its kryptonite: fundamental differences between the two parties over taxes and entitlements, though mostly it was about taxes.

Democratic Senator Patty Murray is co-chair of the committee and she appeared on CNN's "State of the Union" yesterday.

SENATOR PATTY MURRAY: There is one sticking divide, and that is the issue of what I call shared sacrifice.

KEITH: That is, if programs like Medicare and Medicaid are going to be on the table, then Democrats on the committee believe the Bush era tax cuts for the highest income earners should be allowed to expire.

MURRAY: The wealthiest of Americans, those who earn over a million dollars every year, have to share too. And that line in the sand, we haven't seen any Republicans willing to cross yet.

KEITH: About a week and a half ago, the Republican side did offer $300 billion in increased revenue, but only if the Bush era tax cuts were made permanent, with upper income tax rates actually going down even further. Democrats weren't willing to accept the rate cut. Meanwhile, Republicans say Democrats weren't willing to give enough on reforms to entitlement programs like Medicare and Medicaid.

Republican Senator Jon Kyl from Arizona spoke on NBC's "Meet the Press."

SENATOR JON KYL: Nothing new came out of this. From the Democratic side, it was the same thing - raise taxes, pass the president's jobs bill, no entitlement reform. On the Republican side, you had the one true breakthrough, and that was this new concept of tax reform, which can generate revenue.

KEITH: Democratic Senator John Kerry of Massachusetts was also on NBC. He says Democrats offered, quote, "huge, hard, tough, horrible reductions in programs Democrats hold dear."

SENATOR JOHN KERRY: We put every single sacred cow on the table. They know. They know that they could have had many things that a lot of us, you know, hate to even talk about publicly, because we're going to get, you know, people are going to say what - you were thinking about doing all of those things?

KEITH: But in exchange, Democrats wanted tax changes the Republicans weren't willing to give.

Alice Rivlin is a senior fellow at the Brookings Institution and was budget director for President Clinton.

DR. ALICE RIVLIN: Each side was prepared to offer more if they thought the other side was operating in good faith.

KEITH: Rivlin has served on two bipartisan commissions that came up with deficit reduction plans and she advised the supercommittee. She calls the apparent failure of the committee a disappointment, a missed opportunity.

RIVLIN: Each side distrusted the other. The Democrats were afraid to offer serious entitlement cuts, because they thought the Republicans will just take that and then not give any revenues. The Republicans said if we offer serious revenues, the Democrats will just take that and they're not serious about the entitlement cuts.

KEITH: And so members of the supercommittee spent Sunday morning positioning themselves to make the other guy look bad, instead of putting the finishing touches on a grand deficit reduction deal. And it all came back to taxes.

Here's Republican Congressman Jeb Hensarling of Texas, on Fox News, Sunday.

REPRESENTATIVE JEB HENSARLING: It's not about assigning blame. But we are unaware of any Democratic offer that didn't include at least a trillion-dollar tax increase on the American economy.

KEITH: Democrat Patty Murray blamed a Republican anti-tax pledge to the group Americans for Tax Reform.

MURRAY: As long as we have some Republican lawmakers who feel more enthralled with a pledge they took to a Republican lobbyist than they do to a pledge to the country to solve the problems, this is going to be hard to do.

KEITH: Everyone went into this knowing that bridging the partisan divide was going to be hard, though it appears with less than a year until the election, it was just too hard, even for a supercommittee.

Tamara Keith, NPR News, the Capitol. Transcript provided by NPR, Copyright NPR.