With a Thanksgiving deadline fast approaching, a powerful congressional panel devoted to debt reduction is running in rhetorical circles, unable to break the impasse over taxes that has long blocked aggressive action to tame the national debt.
Though the committee’s 12 members have been meeting for nearly two months in closed-door sessions, lawmakers, aides and others involved in the process say they have yet to reach consensus on the most basic elements of a plan to restrain government borrowing.
The special congressional debt reduction supercommittee is opening its first meeting with promises to work together to slash the deficit and lift the sluggish economy.(Sept. 8)
Graphic breaks down President Obama’s plan to find more than $3 trillion in budget savings over a decade.
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There is no agreement on the scope of their ambitions: Should they aim to meet a savings target of at least $1.2 trillion over the next decade or “go big” with savings of $4 trillion or more? Nor is there agreement on a benchmark against which to measure those savings. And while individual ideas for savings abound, the committee has yet to assemble a comprehensive framework that would demonstrate its ability to produce a plan of any size before the Nov. 23 deadline.
Committee members say there is still time to cut a deal and have congressional budget analysts assess it. But the lack of progress is raising alarms on Capitol Hill and beyond as lawmakers and other observers grow increasingly worried that the panel is running out of time.
“The clock is ticking,” Rep. Chris Van Hollen (D-Md.), a committee member, said Wednesday. “The next three weeks will be make-or-break for the success of this committee.”
The panel — officially called the Joint Select Committee on Deficit Reduction and unofficially dubbed the “supercommittee” — was created this summer in the wake of an epic battle to raise the legal limit on government borrowing. House Republicans refused to lift the ceiling without a plan to restrain the debt. But they also refused to raise taxes, rejecting a deal with President Obama that would have made significant cuts to federal health and retirement programs in exchange for around $1 trillion in new revenue over the next decade.
In the end, Democrats agreed to accept caps on agency budgets to reduce spending by more than $900 billion by 2021 and to create the supercommittee, which was tasked with identifying additional savings. If the committee, comprising six lawmakers from each party, fails to reach an agreement that wins congressional approval by Christmas, $1.2 trillion in additional across-the-board cuts will be triggered in January 2013.
Democrats have argued that the trigger would force Republicans to the bargaining table over taxes because the automatic reductions would fall heavily on the Pentagon. But so far, that tactic has not worked. House Speaker John A. Boehner (Ohio) and other GOP leaders have yet to show any appetite for significant tax hikes in advance of the 2012 election, when they hope to campaign against Democrats on the issue.
Supercommittee members have discussed a two-stage process that would first cut entitlement spending and close several tax loopholes, such as a write-off for corporate jets. Then, the tax-writing committees in the House and Senate would be instructed to overhaul the tax code to lower rates and raise sufficient additional revenue to meet the committee’s overall target.