The debt supercommittee’s deliberations have largely taken place behind closed doors, and they’ve been in constant flux. That’s made it difficult to keep track of the offers that both parties have put forward in the attempt to agree on at least $1.2 trillion in deficit reduction. The proposals and counterproposals have evolved over time, but the biggest stumbling block — revenue — has remained constant. Here’s a timeline of what the two parties have offered each other, and when:
— Republicans’ first proposal: Republicans rejected that proposal and responded immediately with a $2.2 trillion deficit-reduction package. It included no new revenue through taxes. Instead, it sought to raise $440 billion through higher government fees, Medicare co-pays and/or Medicare premiums for wealthier beneficiaries. It also used “dynamic scoring” to assume $200 billion in additional revenue through economic growth resulting from tax reform. The spending cuts included nearly $700 billion from Medicare and Medicaid and $250 billion through reducing government personnel. Like the first Democratic plan, it included Social Security savings through recalculating the cost-of-living increase.
— Republicans’ second proposal: After Democrats flat-out dismissed the first GOP plan, Sen. Patrick J. Toomey (Pa.) and some other Republicans on the committee are currently backing a $1.45 trillion deficit-reduction proposal. The plan would cut spending by about $890 billion and raise about $250 billion in revenue through limiting deductions and write-offs. The spending cuts would include $190 billion in cuts to discretionary spending, $225 billion from a cost-of-living adjustment for entitlement programs, and $375 billion from health-care savings. An additional $310 billion would come from interest savings and assumed economic growth and improved tax compliance. It’s the first time Republicans have publicly put tax revenue on the table, but it was contingent on a permanent extension of the Bush tax cuts, which would cost $3.7 trillion in revenue over the next 10 years. Toomey also wants to lower the rate for the wealthiest to 28 percent from its current rate of 35 percent. (Toomey has modified his plan from his original proposal, a $1.2 trillion plan that would have had $750 billion in spending cuts and $500 billion in revenue, $300 billion of it from taxes.)
— Democrats’ second proposal: Some Democrats on the committee have responded to Toomey’s plan by floating a $2.3 trillion deficit-reduction package, split between spending cuts and tax increases. The new revenue would include about $300 billion to $350 billion in savings from attacking a specific set of tax breaks, including those going to oil and gas companies and ethanol producers. The remaining $650 billion in revenue would come through a future process of broad-based tax reform that would cap the individual tax rate at 35 percent—instead of letting it rise to 39.5 percent when the Bush tax cuts expire—and enact corporate tax reform. The spending cuts are similar to what was in the original Democratic proposal: $400 billion in discretionary cuts, half from defense spending, $400 billion through Medicare and Medicaid cuts and other reforms and $200 billion from other mandatory spending programs. The plan also assumes about $300 billion in interest savings.
*Update: This post has been updated to reflect the latest iteration of Toomey’s plan. The original post used the numbers from his original proposal