Nov. 16 (Bloomberg) -- With a week remaining before the deadline to find a way to cut the U.S. deficit, the anti-tax and entitlement-protecting camps of Congress’s supercommittee are hardening their positions.
Texas Representative Jeb Hensarling, the panel’s Republican co-chairman, said today 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 not moving this particular offer,” Hensarling told reporters. “I’m still waiting for Democrats to actually solve the problem” of entitlements. “Should that come, I would be more than willing to negotiate.”
Earlier, supercommittee co-chairwoman Senator Patty Murray of Washington said Democrats “are not going to accept a plan that gives a tax break to the wealthiest Americans and balances all of this incredible challenge we have on the backs of middle-class Americans.”
Democrats are insisting that Republicans accept a higher amount of new tax revenue. Murray said today, “I heard some of the comments and I hope that they have not walked away.”
Pressure is mounting for both parties to come together on a plan so the committee can vote by its Nov. 23 deadline. Failure to enact a debt-cutting plan of at least $1.2 trillion this year would force $1.2 trillion 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.
The committee needs to 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, adding, “I’m not giving up hope until that stroke of midnight.”
Hensarling also called on President Barack Obama to withdraw a September threat to veto any supercommittee deal that cuts Medicare benefits and doesn’t include significant revenues.
“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.”
$1 Trillion in Revenue
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. They are weighing whether to reduce their demand for new tax revenue to about $800 billion, a Democratic aide said yesterday.
A second Democratic aide said the spending cuts in any new proposal also would be smaller, without giving an amount. Both aides weren’t authorized to speak publicly.
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 Democratic Representative Chris Van Hollen of Maryland today before meeting with fellow party members on the supercommittee.
Asked yesterday whether he believed a deal was coming together, Arizona Senator Jon Kyl, a Republican on the panel, said, “I’m not sure.”
‘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,” Ayotte told the U.S. Chamber of Commerce in Washington today. “What you see right now with the back and forth, there is still time to work this out.”
A bipartisan group of senators and House lawmakers today reiterated their call for the panel to “go big” with a deal of as much as $4 trillion. Earlier, 45 senators signed a letter calling for a larger plan, while a separate House letter got 102 signatures.
“The seriousness of the debt challenge can only be met with an equally serious and bipartisan determination to do what needs to be done,” House Minority Whip Steny Hoyer, a Maryland Democrat, said at a news conference. Dozens of lawmakers joined him, including Senator Lamar Alexander of Tennessee, the chamber’s No. 3 Republican leader, and Senator Richard Durbin of Illinois, the No. 2 Democratic leader.
‘More on the Table’
Alexander suggested he was willing to accept more tax revenue than Hensarling offered. Noting that Republicans have offered more revenue and Democrats have offered to reduce entitlements, he said, “Both need to put more on the table and get a result and we’re here to support them.”
Yesterday, House Speaker John Boehner of Ohio said fellow Republicans’ proposal, including $300 billion in new tax revenue through a tax-code overhaul, was a “fair offer.” He also said that if the supercommittee reached an agreement he believed the House could pass it.
Overhauling the tax code would be a “step in the right direction,” Boehner said.
Senator Pat Toomey, a Pennsylvania Republican on the supercommittee, outlined his party’s plan last week and said Nov. 13 on “Fox News Sunday” that he was open to compromise. His proposal would reduce the top income tax rate for the highest earners to 28 percent from the current 35 percent, and increase the Medicare eligibility age to 67 from 65.
Texas Senator John Cornyn, a Republican, said through an aide today, “I continue to hope the supercommittee will work to reform our tax code, close loopholes and lower rates. Senator Toomey’s plan prevents the largest tax increase in American history from going forward and lowers rates for every American. I believe this is a credible proposal that deserves serious consideration.”
Senator John Kerry, a Massachusetts Democrat on the committee, said in response to Hensarling’s comment: “When people go public and say what they’re willing or not willing to do it isn’t as helpful as sitting at a table and trying to work through these things. My hope is we have time.”
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