The supercommittee failed because Republicans refused to compromise
By Chris Van Hollen,
On Sept. 8, six Democrats and six Republicans sat down to breakfast at the first meeting of the Joint Select Committee on Deficit Reduction. We all knew that congressional gridlock had brought us together, but I arrived with high hopes that we would be able to make the tough decisions needed to address the twin challenges of job growth and deficit reduction. We did not succeed — and a huge opportunity was missed.
Our failure is being cast as the result of both parties refusing to give ground, and attempts at explanation are dismissed as partisan finger-pointing. That is a convenient narrative, but it ignores the facts.
Often in politics there is no objective measure for reasonable compromise. Fortunately, in this case the public has a measuring stick against which to judge competing claims. The recommendations made by the president’s bipartisan National Commission on Fiscal Responsibility and Reform (known as Simpson-Bowles, after the Republican and Democratic co-chairs) provide a model for comparing the major plans offered by both sides during the supercommittee deliberations.
First, consider the ratio of spending cuts to revenue increases in Simpson-Bowles vs. the plans discussed by the supercommittee. As documented by the nonpartisan Center on Budget and Policy Priorities, when you factor in the $900 billion in budget cuts Congress made this year, Simpson-Bowles recommended about $2 in cuts for every $1 in revenue. By comparison, the major Democratic plan reflected a ratio of $6 in cuts for every $1 in revenue. The center noted that the Democratic plan “stands well to the right of plans” offered by Simpson-Bowles and other bipartisan groups. By contrast, the Republican plan fell far short of all other bipartisan plans. Compared with the Simpson-Bowles base line, it relied entirely on spending cuts and actually reduced revenue by permanently locking in tax cuts for the highest-income earners.
Second, Democrats were prepared to make important reforms to entitlement programs. While strongly opposing Republican proposals to end the Medicare guarantee and force seniors into the private insurance market without adequate support, we were prepared to put on the table all the Medicare and Medicaid reforms recommended by Simpson-Bowles. In total, the mandatory health-care savings proposed by the major Democratic plan equaled those in Simpson-Bowles. And when faced with the Republicans’ “cuts only” approach to Social Security, we considered a plan to strengthen that essential retirement security program through a mix of new revenue and reforms — the same approach taken by Simpson-Bowles and other bipartisan groups.
Third, in an effort to reach agreement, Democrats presented a plan with significantly lower revenue than in Simpson-Bowles. Relative to their base lines, the Democratic plan would have raised about $450 billion, almost $1 trillion less than Simpson-Bowles.
There has been much misinformation about the Republican tax proposal. The Republican claim to have raised $300 billion in “new tax revenue” is misleading. In reality, their willingness to raise $250 billion of that revenue was conditioned on Democrats agreeing to make permanent more than $800 billion of the Bush tax cuts for the wealthiest Americans, which are scheduled to expire at the end of next year — thereby locking in $550 billion of tax breaks for the top 2 percent of earners. Their proposal was further conditioned on reducing tax rates while dramatically cutting various deductions. Analyses by the nonpartisan Joint Committee on Taxation and other independent groups indicate that the Republican plan to drop the top rate from 35 percent to 28 percent, while slashing deductions and preserving the current low rates on capital gains, would very likely increase the tax burden on many middle-income families and give the superwealthy a massive tax cut.
Overall, the Republican tax proposal fell nearly $2 trillion short of the revenue raised in Simpson-Bowles and, in comparison, increased the deficit by $500 billion.
While zealously guarding tax breaks for the highest earners, Republicans refused a Democratic proposal to temporarily extend and increase the payroll tax holiday for all working Americans next year. As a result, in January every U.S. worker will face a tax hike — at a time when consumer demand is likely to remain weak and the economy fragile. Republicans also rejected Democratic proposals to use some of the savings generated from our deficit-reduction plan to finance immediate job creation efforts and extend unemployment compensation to people out of work through no fault of their own.
When measured against the bipartisan standard set by Simpson-Bowles, supercommittee Democrats made every effort to move to the middle and put forward a deficit-reduction plan that met the test of balance. Republican proposals, however, fell far short, relying totally upon spending cuts and achieving $1 trillion less in total deficit reduction.
After weeks of intense talks, the failure to break the political gridlock is disappointing. We can no longer afford to punt on the difficult choices that we have been elected to address. The path to a balanced and fair solution is clear — but unless both sides are prepared to muster the political will, we cannot get there.
The writer is a Democratic representative from Maryland and ranking Democrat on the House Budget Committee.