Super Committee Stalled After Democrats Reject Latest GOP 'Spitball' Offer On Tax Hikes
WASHINGTON -- The gap between Democrats and Republicans on the debt-cutting super committee appeared as unbridgeable as ever going into the last weekend of its work, with little movement on either side and Democrats rejecting a scaled-back offer from the GOP Friday afternoon, sources said.
One GOP leadership aide said the offer was for $643 billion in cuts. Another broke it down as $229 billion "in fees and revenues"; $316 billion in cuts, $100 billion of which would come from the defense budget; and $98 billion in canceled interest.
The aide further described this as "the low-hanging fruit that everyone agrees on, nothing controversial, no Medicare, no Medicaid, and no Social Security."
But it wasn't all exactly low-hanging fruit to Democrats, who were quick to point out that the revenue component was paltry.
While there would be fees on such things as spectrum use and land sales (according to the GOP aide), the only tax hike that was publicly reported was the elimination of a break for corporate jet owners. The amount of money raised would be $3 billion.
"It wasn't even a formal offer," emailed one Democratic aide. "This is just spitballing by the Speaker's office. Only $3 billion in revenues out of a $600 billion-plus package is even less serious than the [Sen. Pat] Toomey offer. It was laughed at when it was floated. The talks within the Super Committee continue."
Talks may indeed be continuing, but they're running up against deadlines, and sources expected little progress over the weekend. The super committee is supposed to report out recommendations by Wednesday. But it is also required to have those recommendations scored by the Congressional Budget Office first, and that will require at least two days, making the real deadline to agree on a deficit-cutting plan Monday at midnight.
The real sticking point appears to be the treatment of the Bush-era tax cuts, which expire in 2012. The Democrats insist on an end to those cuts as they apply to wealthy taxpayers, and the Republicans want to keep them all. A GOP aide said the last offer was "silent" on the cuts, but the previous Toomey offer kept them -- and indeed lowered overall rates.
The advantage of this latest proffer by the GOP is that it gives Republicans something to point to as evidence that they are trying, and although it does not hit the full target, it takes some of the sting out of the automatic $1.2 trillion in "sequestration" cuts that will kick in if the super committee deadlocks.
As for the Democrats, although they've been saying they want the committee to succeed, they might actually be better off letting the sequestration happen, since the Bush cuts expire already under current law. They would then just have to figure out how to extend the cuts later for the middle class.
"Sequestration will give us progress whether we like it or not. I'd rather have a human hand attached to the progress than, as I said before, the blunt edge of a guillotine," Rep. Xavier Becerra (D-Calif.) told Roll Call. But he added, "I'm not giving up the weekend just so I can watch sequestration take effect."
Also, Democrats think that taking the smaller offer would be giving up valuable ground gained in the debt talks, when they settled on an even split of cuts from defense and domestic spending.
"That would be a cave," a Democratic aide said. "Taking this offer would make it more domestic than defense."
Republicans insisted their offer raised far more than $3 billion in taxes, but the Democrats disagreed vehemently with what the other side considered a tax hike.
"Their definition of white is black," a Democrat said.