On Sunday, Rep. Jeb Hensarling of Texas, the supercommittee’s GOP co-chairman, said he hasn’t “given up hope” that the panel can reach an agreement to reduce borrowing by at least $1.2 trillion over the next decade. But Hensarling also embraced the prospect of failure.
“Listen, it’s been a roller-coaster ride,” he said on CNN. “We haven’t given up hope. But if this was easy, the president of the United States and the speaker of the House would have gotten it done themselves” in talks during this summer’s debt-limit showdown.
Sen. Patrick J. Toomey (R-Pa.), a supercommittee member and the primary author of the latest GOP offer, was only somewhat more encouraging. Talks have reached “a difficult point,” he said on “Fox News Sunday.” “I think we’ve got a ways to go.”
Mathematically, the gap between the two sides on the supercommittee has narrowed. Republicans have offered a $1.2 trillion deficit-reduction package that would cut spending by about $750 billion over the next decade while raising about $500 billion in revenue, including about $300 billion in new taxes. Democrats have offered to trim borrowing by $2 trillion, with that sum equally divided between spending cuts and tax increases.
Hensarling acknowledged that the committee is considering punting some of the hardest details of tax reform into next year, a move that would keep the deficit debate alive through the 2012 election season. In recent days, negotiations have focused almost exclusively on the tax issue, with Senate Finance Committee Chairman Max Baucus (D-Mont.) and House Ways and Means Chairman Dave Camp (R-Mich.), both supercommittee members, struggling to reach consensus on how much new revenue could be generated through an overhaul of the tax code and how to force their committees to achieve that goal.
After a long day of talks Sunday, the two sides were no closer to agreement, according to sources in both parties. Significant differences remained about both the size of the tax target and the form of an enforcement mechanism, with Democrats arguing for a trigger that would automatically raise taxes unless Congress acts.
While Baucus and Camp worked to bridge that divide, other panel members were standing by, waiting to resume broader negotiations. Several said they worry that a supercommittee impasse could destabilize financial markets and undermine the nation’s rickety economic recovery.