The fiscal super committee created by last summer’s deal to raise the debt ceiling was charged with crafting a $1.5 trillion deficit reduction package by Thanksgiving. However, moments ago, the committee’s co-chairs issued a statement officially conceding that “it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline.” For weeks, the GOP has been refusing to even consider new revenue, pairing modest attempts to close loopholes in the tax code with giant new tax cuts centered on the very rich that would add trillions to the deficit. The committee’s co-chairman Rep. Jeb Hensarling (R-TX) even said the GOP would not consider “any penny” in new revenue (a statement that he later walked back). Without a deal, automatic cuts are supposed to be scheduled for 2013, but several congressional leaders have been discussing canceling the cuts, leaving the super committee the latest in a long line of deficit commissions to unable to succeed in their attempt to alter the U.S. budget.
GOP REFUSED TO TAX MILLIONAIRES & BILLIONAIRES: The GOP, in lockstep with anti-tax crusader Grover Norquist and his radical Americans for Tax Reform no-taxes pledge, adamantly refused to include new revenue in a deficit reduction deal. Sen. Pat Toomey (R-PA), one of the super committee’s members, released a plan to raise $300 billion in revenue via closing loopholes in the tax code, but at the same time lowering income tax rates, including taking the top tax rate from its current 35 percent down to 28 percent. A second, smaller plan put forward by the GOP included $640 billion in deficit reduction, with just $3 billion coming from closing tax loopholes. As the Center on Budget and Policy Priorities noted, the Toomey plan would result in a “shift in tax burdens from households at the top of the income scale to low- and middle-income households.” “The Toomey plan still results in the biggest tax cut since the Great Depression. It would be the biggest tax cut since Calvin Coolidge, and we all know how that turned out,” said Sen. Jon Kerry (D-MA) on NBC’s Meet the Press yesterday. “Now, we didn’t come here to do another tax cut for the wealthiest people while we’re (asking) fixed-income seniors to ante up more, people on Medicaid, who are poor, to ante up more.” Sen. Patty Murray (D-WA), who is Hensarling’s co-chair on the super committee, added, “as long as we have some Republican lawmakers who feel more enthralled with a pledge they took to a Republican lobbyist [Norquist] than they do to a pledge to the country to solve the problems, this is going to be hard to do.”
DEMOCRATS PUT SACRED COWS ON THE TABLE, GOP STILL SAID NO TO TAXING MILLIONAIRES: While Republicans have offered merely gimmicks in terms of revenue, Democrats on the super committee offered concession after concession in an attempt to cut a deal. The final Democratic offer included the same level of cuts to Medicare and Medicaid and the same level of reductions in government programs as the Toomey plan, along with $400 billion in revenue, for a total package that included $5 in spending cuts for every $1 in revenue. For comparisons sake, compared to a current policy baseline (that assumes all the Bush tax cuts get extended), the Bowles-Simpson deficit reduction plan included a one to one spending cuts to revenue ratio. The $400 billion in revenue that Democrats offered in the super committee was half what House Speaker John Boehner (R-OH) reportedly offered during the debt ceiling negotiations. The Democrats’ rightward-leaning offers came at the same time that the public has shown, in poll after poll, that it favors increasing taxes on the rich and preserving the social safety net in any deficit reduction deal. In fact, even supposedly anti-government Tea Partiers oppose cuts to Medicare and Social Security by a 76-22 margin, while 68 percent of millionaires favor raising their own taxes.
AUTOMATIC CUTS UNDONE?: According to the terms of the debt ceiling agreement ,the inability of the super committee to agree to a deal triggers $1.2 trillion in automatic spending cuts in 2013, split about evenly between discretionary spending and defense. However, conservatives have already begun plotting a way to negate those cuts. “The sequestration is not engraved on golden tablets. It is a notional aspiration,” Sen. John McCain (R-AZ) said earlier this month. “And I think we’d have sufficient support to prevent those kind of cuts from being enacted because of the impact it would have on national security.” Rep. Buck McKeon used 9/11 imagery to warn against the cuts actually taking place. Defense Secretary Leon Panetta has also gotten in on the action, saying that if the defense cuts in the deal were enacted, “in effect, it invites aggression.” However, as Center for American Progress Senior Fellow Larry Korb writes, “Panetta grossly exaggerates when he says it would be disastrous if projected levels of defense spending are reduced by an additional $500 billion if the bipartisan “super committee” deadlocks and automatic cuts go into effect. Adding $500 billion (from the super committee) to the $450 billion already being cut would mean total reductions of $950 billion over the next decade, or about 15 percent. Since the defense budget has grown by more than 50 percent over the past 10 years, it can easily absorb a 15 percent reduction — which would be about half the defense cuts of Presidents Eisenhower and Nixon and less than that of George H. W. Bush.” President Obama has said he “will not accept any measure that attempts to turn off the automatic cut trigger.”
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