Speaking for a majority of the six Democrats on the panel, Sen. Max Baucus (Mont.) on Tuesday urged his GOP colleagues to pick up where President Obama and House Speaker John A. Boehner (R-Ohio) left off in a summer battle over raising the federal debt limit.
Baucus, who chairs the Senate Finance Committee, offered to cut as much as $500 billion from Medicare and other health programs and to adopt a less generous measure of inflation to calculate Social Security benefits, according to aides familiar with the talks. He also called for as much as $300 billion in new measures aimed at stimulating the flagging economy.
Republicans quickly rejected that offer. Senior aides called the tax and stimulus provisions unacceptable. The GOP countered Wednesday with its own plan to tame the debt without raising taxes, leaving the two sides apparently stuck on the same issues that have stymied action for months.
But after weeks of aimless floundering by the “supercommittee,” the exchange marked the beginning of a more serious phase that will determine whether lawmakers can break that political impasse.
Neither side seemed certain where the path would lead. Republicans questioned the timing of the Democratic offer, which came nearly two months after the talks began. Some suggested that Democrats were trying to paint themselves as reasonable negotiators in anticipation that the talks will ultimately fail.
“You have to wonder if this is about positioning instead of about moving to resolution,” said Rep. Dave Camp (R-Mich.), a panel member who chairs the House Ways and Means Committee.
Senate Majority Leader Harry M. Reid (D-Nev.) broached the idea of a “grand bargain” on taxes and entitlements in a meeting last week with Boehner and Senate Minority Leader Mitch McConnell (R-Ky.). Democratic leadership aides said the goal was to determine whether such a deal could come together.
“This was a good-faith effort to put something on the table to see what kind of response we would get,” said one senior Democrat, speaking on the condition of anonymity to discuss the private talks.
But Boehner and McConnell have been steadfast in their refusal to consider tax increases big enough to persuade Democrats to throw their weight behind reductions to popular social programs.
“Their offer is a joke,” said one Democrat with knowledge of the GOP counter-proposal. “Democrats came to the table with an offer that had serious skin in the game for both parties. Rather than offering real solutions, Republicans are just doing more of the same posturing they do every time they walk away from efforts to constructively tackle this crisis.”