Democrats on Friday rejected a last-ditch bid by Republicans to save the congressional supercommittee from failure, leaving the panel with no apparent path to compromise as the clock ticks toward a Thanksgiving deadline. . . .
Republicans proposed to achieve $640 billion in savings, primarily through cuts to domestic agency budgets, a pay freeze and bigger pension contributions for federal workers, cuts in farm subsidies and an array of other spending cuts and revenue raisers.
So much for Republicans supposed refusal to compromise. So much for the Democratic narrative that the only thing standing in the way of a deal is the GOP’s insistence that all savings come from spending cuts.
But we’ve known for some time this isn’t true. In an interview with Rep. Paul Ryan (R-Wis.) Jim Pethokoukis gives us the clearest answer yet on revenues:
Let’s talk about the SuperCommittee. Would you be in favor of a tax plan that trimmed deductions and used part of the savings to lower rates and part to reduce debt? Some would score that as a tax hike.
That’s what [Sen. Pat] Toomey theoretically put on the table. You’ve got to measure these things in the context of current law and the current path, which is the top rate goes to 44.8 percent and becomes extremely progressive and just destroys small businesses. … So bringing the top rate down to 28 percent and lower for the rest of the scale is a very good thing. I believe from a dynamic standpoint you’ll raise more revenues. I don’t buy those static analysis models anyway. … It’s as if some cardinal sin has been committed here. What matters is that rates are going down. Everybody believes in broadening the tax base and lowering rates and stop picking winners and losers in the tax code and having a very efficient system. And what Toomey produced is perfectly consistent with that. But we won’t get it because Democrats won’t agree to lower rates because they want this class warfare.
It is telling that the Democrats made no counter-offer. A senior Republican Senate adviser familiar with the talks told me, “They came back with a less-than-specific offer that they had previously raised that would have included more than a trillion in tax hikes and about a half trillion in stimulus spending.”
Republicans, and Toomey in particular, have done a good job of demonstrating their seriousness on the supercommittee without violating the core GOP principle, that is, a refusal to raise tax rates and play the class warfare game.
It is noteworthy that Senate Majority Leader Harry Reid (R-Nev.) had nothing concrete of his own to contribute. He waved off the GOP’s effort: “I’m going to be available to talk, if they’re willing to put forward something reasonable. If they’re not willing to put forward anything reasonable, there’s no point in talking.” But where is his plan? (The same place where the Senate’s budget plan for the last two years is located, I guess.) And why no counter-offer to the GOP?
It’s fairly clear here that President Obama and Reid would rather run against the supercommittee’s failure than make a deal that will annoy their base. Republicans should be crystal clear about what they have offered — and what the Democrats have been up to.