Deficit Panel Members Trade Plans

Party Leadership More Involved With Super Committee as Negotiations on Savings Heat Up

Posted October 26, 2011 at 6:33pm

After a rare public hearing Wednesday, the Joint Committee on Deficit Reduction met yet again behind closed doors — this time to hear the GOP proposal for how to achieve the panel’s goal of reducing the deficit by at least $1.2 trillion over 10 years.

Democrats offered a proposal worth $2.5 trillion to $3 trillion in savings at a private session Tuesday, as Roll Call previously reported. 

The consecutive meetings Tuesday and Wednesday and the exchange of proposals played more like negotiating tactics and a battle for leverage — a necessary, though at times tense, step forward — than a presentation of proposals that are close to a final product.

“I think it is important that the committee do the most that it can do,” Sen. John Kerry (D-Mass.) said, heading into the panel’s closed-door meeting Wednesday. “We are in the process of learning what that is, the boundaries of what the committee can do.”

Details of the GOP plan were not available at press time. However, there were clues about where Republicans might be headed.

Republican leaders have publicly bristled at including revenue raisers in the super committee’s final product, but outside sources suggested that the issue of business-tax reform has been raised recently among the GOP. Leadership aides and sources close to the committee would not confirm definitively whether business-tax reform was included in Wednesday’s Republican offering.

The inclusion of business-related tax provisions — potentially on a small scale — is in line with both on-the-record statements made by Republican committee members and the trajectory of previous deficit reduction negotiations.

Earlier this month, super committee Co-Chairman Jeb Hensarling (R-Texas) said he believed that tax reform could be taken up by the panel, especially if it did not include any changes to individuals’ taxes.

“There is seemingly some common purpose in doing business-entity tax reform,” Hensarling said in a story reported by CQ Today. “You understand it’s an area of potential commonality, particularly with what the president has said in the past, and certainly it’s something that a number of Members are interested in.”

Republicans were still making changes to their offering in the 24 to 48 hours leading up to the super committee’s Wednesday afternoon private session, sources said. The six GOP members of the panel met Tuesday in the office of Speaker John Boehner (R-Ohio) to discuss their progress, but aides to leaders and super committee members declined to say whether that meeting was before or after Sen. Max Baucus’ (D-Mont.) presentation. Still, the flurry of conversations suggest that GOP members of the committee may be united in their approach. When the Democrats presented their plan Tuesday, some of the House Democrats on the panel had concerns about possible cuts to Medicare.

After the private GOP presentation, the second-floor Capitol office of super committee member and Senate Minority Whip Jon Kyl (R-Ariz.) became a hub of activity. Around 5 p.m., the three Republican Senators on the super committee huddled in Kyl’s office suite for a conference call with Senate Minority Leader Mitch McConnell (R-Ky.), who is out of town for recess, to update him on the panel’s progress.

Shortly before 6 p.m., super committee member Rep. Chris Van Hollen (D-Md.) entered Kyl’s office, with the Democrat and two Republican Senators exiting shortly after. Though Members have been meeting all the time, the uptick in activity — especially with the involvement of leaders — may suggest the talks have entered a more serious stage.

After details of the Democratic proposal leaked Tuesday, lawmakers and aides around the committee were especially tight-lipped. Inside accounts of discussions in the room, as well as meetings with leaders like the one in Boehner’s office,  have been few and far between since the panel began its work in August.

On Tuesday, Baucus, the Senate Finance chairman, presented a plan supported by most, though not all, of the super committee’s Democrats that would be composed of tax increases nearly equal to spending cuts to hit the target. His offering was met with harsh criticism by GOP members of the panel, according to sources familiar with the panel’s workings.

In previous bipartisan negotiations — particularly those between Boehner and President Barack Obama — tax reform was discussed. Ultimately, the GOP spurned the deals over fears they would raise taxes. Democratic sources insisted Tuesday night and Wednesday morning that their party’s plan, which includes billions of dollars in Medicare reform, resembles the “grand bargain” pursued twice last summer by Boehner and Obama.

That plan in one of its final iterations, however, included a ratio of about 3-to-1 in spending cuts to revenues and did not embrace serious tax code reform.

Sources on both sides of the aisle, close to the committee and to leadership, suggested that Democrats were using the term “grand bargain” to loosely describe a plan that included tax code reform in exchange for long-term structural entitlement reform.

In the super committee’s Wednesday public hearing, lawmakers appeared to agree that any plan that seriously reduces the deficit must go beyond cuts merely in discretionary spending.

Hensarling, in his statements at the public panel, revealed that he believed any significant proposal adopted by the committee would include entitlement reform, but how those levels compared to those in the plan presented by Democrats, estimated to be from $400 billion to $500 billion, was not immediately clear.

If the panel fails to reach agreement before its Nov. 23 deadline, a combined $1.2 trillion in across-the-board discretionary spending cuts, including more than $400 billion in defense spending, will be made.

The super committee did not have a meeting on its schedule for Thursday at press time, according to sources. However, the panel has been meeting frequently as time ticks toward its deadline, and the schedule has been subject to change.