Deficit Panel Impasse Intensifies

Democrats Dismiss the Most Recent GOP Plan

Posted November 9, 2011 at 6:43pm

With less than two weeks left for the super committee to find a deal and with no compromise in sight, Democrats say they’re waiting for Republicans while Republicans say they’re waiting for Democrats, but everyone might be waiting for Godot.

Multiple bipartisan negotiating efforts — from Vice President Joseph Biden’s group and the Senate’s “gang of six” to talks between President Barack Obama and Speaker John Boehner (R-Ohio) and the president’s deficit commission — have failed to resolve the fundamental impasse over whether and how to tackle taxes and entitlements. And unless the situation changes soon, despite tempered optimism from some lawmakers outside the room, it appears the super committee may be destined to retell the story of the famous play in which two men futilely wait for someone to appear.

The already delicate, against-the-odds talks hit a low Wednesday, just a day after Republicans made a revised $1.2 trillion offer that included $250 billion to $300 billion in tax revenues and $700 billion in cuts. A smaller group of seven super committee members who met Monday night — before the GOP leaked the plan — met again Tuesday night, according to sources familiar with the talks, but the session was marked by frustration and ended in doubt over whether the group would reconvene anytime soon. At the Monday meeting, Democrats offered a revised plan of their own: a $2.3 trillion package composed of $1 trillion in revenue, $1 trillion in cuts and $300 billion in interest savings.

Sens. Pat Toomey (R-Pa.), Rob Portman (R-Ohio), Max Baucus (D-Mont.) and John Kerry (D-Mass.) huddled Tuesday night with Reps. Dave Camp (R-Mich.), Fred Upton (R-Mich.) and Chris Van Hollen (D-Md.) — as they have been regularly for weeks — to talk about ways to include new revenues. But sources indicate the divisions on taxes, and the amount of tax revenue required to reach a deal, have not been bridged. That Democrats came out against the Toomey plan so vocally Tuesday afternoon, especially considering how tight-lipped participants in the negotiations have been to date, did not help the negotiating process, sources indicated.

As of Wednesday night, super committee Co-Chairmen Jeb Hensarling (R-Texas) and Patty Murray (D-Wash.) had not spoken since Monday, according to Democratic and Republican sources. But some sources insisted such a gap in communication so close to the Nov. 23 deadline should not be considered serious and that the relationship between the two remains good.

Super committee Republicans and Democrats met separately Wednesday, shoring up their positions as the panel digs in for its final two weeks of work. The full committee has not met behind closed doors since last Monday, and there were no plans as of Wednesday evening for the full group to meet this week.

“We are waiting for them to bring us back a fair and balanced proposal,” Murray said after the Democratic meeting. “They clearly understand that the proposal that was given to some of our Members is not fair and balanced, and they understand that they need to bring back a fair and balanced proposal.

“I believe that they understand the dynamics of where we are,” Murray continued.

Democrats circulated a memo Wednesday dismissing the GOP plan — which Toomey largely crafted — charging that lowering the top rate for individual income taxes to 28 percent would require “even more dramatic cuts” to the tax expenditure system than the hypothetical eliminations put forward. Because there are no detailed specifications for the Toomey plan, the document was based on previous scores to other proposals as well as projected cuts that might achieve similar savings.

Meanwhile, Republicans believed they came to the table with a serious offer. In a closed-door, full Senate GOP Conference meeting Wednesday afternoon, the super committee Republicans presented the plan to their colleagues. And though any proposal that touches taxes generally has been dismissed by Republicans, Senators leaving Wednesday’s session indicated the plan was received warmly.

And Members of both parties indicated that including revenues marks a shift in the GOP position — though how large a shift certainly depends on whether you’re viewing the plan from the right or left side of the aisle.

“It recognizes the seriousness of the problems we face and the eagerness of Republicans to get a result,” Senate Republican Conference Chairman Lamar Alexander (Tenn.) said. “If you think about it, Pat Toomey, Portman and [Sen. Jon] Kyl [R-Ariz.] come in and tell a whole roomful of Republicans that we’ve put $250 billion in tax increases on the table and not get a murmur of dissent is remarkable and a major step by Republicans.”

Sen. Lindsey Graham (R-S.C.) said he believed Republicans had crossed “an ideological bridge that I’m impressed with … It’s a huge deal.”

But Democrats believe the ratio of cuts-to-revenues is still off and did not indicate Wednesday that they will make a counter-offer. It puts the panel in a tough spot. Even if Republicans on the super committee wanted to move further on taxes, they may be hampered by rank-and-file Republicans in the House and Senate.

Some Democrats, however, remained hopeful that Republicans could keep moving their way.

“The word ‘revenue.’ It is a breakthrough. I think you have to honest. There haven’t been many who stepped forward. … This is the first time, at least publicly, that we know that it’s on the table,” Senate Majority Whip Dick Durbin (D-Ill.) told reporters Wednesday, before adding that he still believed that no deal would be better than a bad deal.

But Kyl said Democrats need to show some movement on their side. “They need to make the next move; they walked away from our proposal, and we think we have a reasonable offer,” he said.

Steven T. Dennis and Humberto Sanchez contributed to this report.