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Congress Deficit-Cut Panel Members Hardening Positions as Deadline Nears

Republicans and Democrats on Congress’s supercommittee are hardening their positions less than a week before a deadline to produce a U.S. deficit-cutting plan and challenging each other to make the first move toward compromise.

Representative Jeb Hensarling of Texas, the panel’s Republican co-chairman, said yesterday his party won’t go beyond its offer to increase tax revenue by $300 billion to cut the debt until Democrats offer a plan to address the long-term growth in federal spending on entitlement programs such as Medicare.

“I’m still waiting for Democrats to actually solve the problem” of entitlements, Hensarling told reporters. “Should that come, I would be more than willing to negotiate.”

The supercommittee’s Democratic co-chairwoman, Senator Patty Murray of Washington, told reporters today that Republicans “need to compromise too.”

Murray said Democrats are willing to accept a proposal from Republicans if they agree to increase tax revenue.

It’s “critically important” for lawmakers to reach a deal and Republicans have to “resolve the differences on their side on revenue, and that’s what we’re waiting for,” she said.

Mounting Pressure

Pressure is mounting for both parties to agree on a proposal so the committee can vote by its Nov. 23 deadline. Failure to enact by year’s end a plan that would cut at least $1.2 trillion over the next decade would force that amount in automatic spending cuts beginning in 2013. Democrats oppose reductions in entitlement programs such as Medicare, as sought by Republicans, unless Republicans agree to larger increases in tax revenue.

House Speaker John Boehner, asked about Murray’s comments that her party is waiting for Republicans to propose more revenue increases, said Democrats have failed to offer a plan.

“You need to understand there has been exactly one proposal on the table in the committee” and that “came from the six Republican members,” Boehner, an Ohio Republican, told reporters today.

House Democratic Leader Nancy Pelosi said “the only way we will be able to reach an agreement” is if Republicans accept balance between revenue and spending cuts.

“If the plan is to extend the Bush tax cuts and to repeal the Medicare guarantee for our seniors, that’s not balanced and that’s a place we cannot go,” she said.

‘Pull Something Out’

U.S. Representative Jim Himes, a Connecticut Democrat, said in a Bloomberg Television interview today that “there’s a better than 50 percent chance” the committee will find the $1.2 trillion in cuts.

“The automatic cuts, the sequesters that kick in, they’re pretty brutal, so my guess is that these guys are going to pull something out,” he said.

The committee must present a plan for a cost analysis by the end of the day Nov. 21 to be able to vote on Nov. 23, Hensarling said yesterday, adding: “I’m not giving up hope until that stroke of midnight.”

Two Democratic aides said their party made an offer on Nov. 11 accepting what they said was an overall Republican proposal for $876 billion in spending cuts and $401 billion in new tax revenue, with several changes.

The aides, who weren’t authorized to speak publicly, said their party suggested dropping Republican proposals to raise the Medicare eligibility age and change an inflation formula so Social Security benefits would grow less quickly.

Bush Tax Cuts

Democrats also sought to add money to help create jobs and to bar any permanent extension of income tax cuts enacted under President George W. Bush. Republicans haven’t responded, the Democratic aides said.

The Democratic plan is “a step backwards because it would lock in the largest tax hike in history -- at least $800 billion -- and add an additional $400 billion in job-killing tax hikes without pro-growth tax reform, plus more than $300 billion in stimulus spending,” Michael Steel, spokesman for Boehner, said in a statement.

Earlier last week, Democrats proposed a plan that would include $1 trillion in new revenue, $1 trillion in spending cuts and $300 billion from interest savings.

Hensarling called on President Barack Obama to withdraw a September threat to veto any supercommittee deal that cuts Medicare benefits and doesn’t include significant revenue.

Clarify Threat

“His veto threat has been widely interpreted to mean there can be no reforms of our unsustainable Medicare and health-care spending unless attached to a trillion-dollar tax increase,” said Hensarling. “He should either clarify that veto threat or withdraw that veto threat.”

Josh Earnest, a White House spokesman, responded in a statement that “the president has long insisted on a balanced approach -- something that has broad support among the American public.”

Some lawmakers had hailed Republicans’ offer last week for $300 billion in tax increases as a breakthrough demonstrating new support in the party for higher taxes. After Democrats rejected the plan, talks stalled.

The question is whether Republicans have “said ‘take it or leave it’ and don’t want to negotiate,” said Representative Chris Van Hollen of Maryland before meeting with fellow Democrats on the supercommittee.

‘Darkest Before a Deal’

When there’s still time to talk, an agreement is possible, New Hampshire Republican Senator Kelly Ayotte said.

“As you know in Washington, it’s always darkest before a deal,” she told the U.S. Chamber of Commerce in Washington. “What you see right now with the back and forth, there is still time to work this out.”

Senator Pat Toomey, a Pennsylvania Republican on the supercommittee, outlined his party’s plan last week and said on Nov. 13 on “Fox News Sunday” that he was open to compromise. The Republican proposal would reduce the top income tax rate for the highest earners to 28 percent from the current 35 percent.

To contact the reporters on this story: Heidi Przybyla in Washington at hprzybyla@bloomberg.net; James Rowley in Washington at jarowley@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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