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Roll Call

Deficit Panel Still Has Long Way to Go

Bill Clark/CQ Roll Call
Deficit panel Co-Chairmen Rep. Jeb Hensarling (left) and Sen. Patty Murray are trying to find consensus before Nov. 23.

After weeks of silence, the Joint Committee on Deficit Reduction finally is making noise — but if the spin coming from both parties on their initial proposals is any indication, the panel still has far to go before any agreement can be reached.

Neither Democrats nor Republicans appear to believe that dueling proposals made last week in two days of intense meetings represent a serious effort at bridging the policy gaps that have plagued previous attempts at sweeping deficit reduction. But time is running out for them to produce a package that shaves at least $1.2 trillion from the deficit over 10 years.

The tension between taxes and entitlements is just as prevalent now as it was in bipartisan talks led by Vice President Joseph Biden last spring and in negotiations between Speaker John Boehner (R-Ohio) and the president during the summer.

With just three and a half weeks until its Nov. 23 deadline, it seems the super committee is not yet in a place to break the stalemate. Indeed, aides are bracing for a last-minute push the week of Thanksgiving to approve a plan — if there is one. Leadership currently is involved but likely will have to become even more involved as negotiations intensify. And Republicans and Democrats are quick with insults but short on insight as to how the empowered panel of 12 bipartisan, bicameral lawmakers will come together in any significant way. Some sources tracking the committee’s work noted late last week that the mood around the panel did not feel nearly as positive as it felt at the outset.

The super committee is slated to have its fifth public hearing Tuesday, when the co-chairmen of the president’s fiscal commission — ex-Sen. Alan Simpson (R-Wyo.) and former White House Chief of Staff Erskine Bowles — and ex-Federal Reserve Vice Chairman Alice Rivlin and former Senate Budget Chairman Pete Domenici (R-N.M.) will testify before the panel about their own bipartisan frameworks. Democrats said Republicans resisted having this particular hearing, because outlines co-authored by the four veteran policymakers include tax increases. But as with the other super committee public sessions, the made-for-C-SPAN affair will be more for show than any indication of where the panel is headed.

The clearest signs so far of the group’s direction were revealed last week, when Democrats and Republicans presented their dueling plans behind closed doors. Sources on both sides of the aisle, of course, point to the large differences in revenue raisers as the center of the panel’s difficulties. The Democratic plan included nearly $1.3 trillion in new revenues, while the Republican plan recommended less than $800 billion. Both proposals were panned by their opponents almost immediately.

Presumably after being briefed on both plans, Boehner sounded a pessimistic note Thursday. “I expect it’s going to be difficult to get to an outcome,” Boehner said a press conference. “When I see ... some of what was put on the table, Democrats wanting $1.3 trillion worth of tax increases — this is the same number that was in the president’s budget, the same number that I don’t know if they’ve found any Democrats in the House or the Senate to vote for. So, I don’t think it’s a reasonable number.”

Last week, Democrats put forth a two-pronged approach for dealing with revenues. They would ask for a $300 billion down payment up front in revenue raisers, followed by a guarantee for about $1 trillion in future tax reform. The Democratic proposal would instruct the House Ways and Means Committee and the Senate Finance Committee — chaired by super committee members Rep. Dave Camp (R-Mich.) and Sen. Max Baucus (D-Mont.), respectively — to overhaul the tax code.

The Republican revenue plan, according to sources familiar with the talks, would include approximately $200 billion in premium increases and other fees for Medicare; $200 billion in other mandatory savings, including spectrum sales and reducing agricultural subsidies; $150 billion in individual tax reform; $50 billion in corporate tax revenue; and $40 billion in savings from enacting the chained Consumer Price Index, which would change the way the government measures inflation.

Of the $150 billion in individual tax reform, much of the projected savings would come from phasing out exemptions and lowering rates.

Although the Republican approach includes some bipartisan carrots — the CPI, for instance, has been touted by Members of both parties and leadership — Democrats criticized the overall package and said their Tuesday proposal was made in better faith. Republicans fired back that Democrats’ lack of detail in how to achieve tax reform was indicative of divisions within their own caucus on how to proceed.

It’s unclear just how involved Congressional leadership was in crafting their parties’ opening bids. But sources on both sides of the aisle indicated that none of the four major contingents on the panel would proceed without the blessing of their leaders. Additionally, aides to both the committee and leaders suggest that the lines of communication have been wide open during the committee’s deliberations, from in-person meetings in Boehner’s office to a conference call with Senate Minority Leader Mitch McConnell (R-Ky.).

The pressure is mounting, however, for the panel’s work to pick up pace. Its deadline to vote on a product is the Wednesday before Thanksgiving, but it may need to start submitting pieces of any potential agreement sooner than that in order to allow the Congressional Budget Office enough time to estimate the costs of the deal.

In his first appearance before the super committee in September, CBO Director Douglas Elmendorf told committee members the nonpartisan agency would need to begin receiving pieces of the plan by the beginning of November — especially if it involves serious changes in entitlements — for everything to be scored before the panel’s deadline.

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