Formally created in the August deal that allowed the federal debt ceiling to be increased, the Joint Select Committee on Deficit Reduction has been hung up almost from the start on the key stumbling block of the 112th Congress: taxes. The six Republicans on the so-called supercommittee have been reluctant to give in to tax increases, while the six Democrats have only been willing to agree to cuts to popular entitlement programs if there are accompanying increases in taxes on the wealthy.
Republicans have offered more than $250 billion in what they consider increased tax revenue, but Democrats have dismissed the proposal because it would permanently extend the Bush era tax cuts that would lock in lower tax rates for high-income earners.
“It’s been a roller coaster ride,” Rep. Jeb Hensarling (R-Tex.), co-chairman of the supercommittee, said Sunday on CNN’s “State of the Union.”
Here are three possible outcomes from the final days of negotiating:
1 — Deal
Democrats, led by Sen. Patty Murray (Wash.), the supercommittee co-chairman, are adamant that the final outcome be “balanced,” their code for including large amounts of new tax revenue and cuts to entitlement programs such as Medicare and Medicaid. They are offering nearly $500 billion in cuts to health-care entitlements, along with roughly $250 billion in savings over the next decade to other mandatory spending programs such as agriculture subsidies.
After initially resisting any tax increases, Republicans made an offer that included some tax hikes and a similar level of new revenue based on the sale of federal properties, other accounting maneuvers and assumptions in economic growth based on a revamped tax code. Any deal would appear to require a higher level of tax increases, accepted by Republicans, and a Democratic agreement to dig deeper into entitlements.
Because of the precarious political position this places both parties in, insiders now believe that a simple seven-vote majority will not be sufficient. Instead, they think it will have to be at least eight votes, split evenly, to give the deal enough momentum to then win passage in the GOP-controlled House and the Democratic-run Senate.
If such a deal is reached before Thanksgiving, congressional leaders are not likely to leave the legislation laying around until the Dec. 23 deadline for its floor consideration. Instead, the House would likely come back after the Thanksgiving holiday and spend a week educating its members about the plan, and then hold a vote the week of Dec. 5.