Supercommittee GOP, Democrats swap offers

[October 27, 2011]  WASHINGTON (AP) -- Republicans on Congress' deficit-reduction supercommittee outlined a plan Wednesday that includes spending cuts but none of the increases in tax revenue sought by Democrats, completing an initial exchange of offers that left the two sides far apart despite weeks of secret talks.

Officials also said a Democratic proposal on Tuesday and the GOP counter-proposal 24 hours later both included a provision to slow the annual cost-of-living increases in future Social Security benefits, suggesting it could become part of any compromise that might emerge.

The Republican offer calls for somewhat more than $2 trillion in deficit savings over a decade, according to officials in both parties. Less than half of that amount would come from increases in items such as Medicare premiums, the sale of public lands and airport fees -- measures that increase government revenue without changing personal or corporate taxes.

Spending cuts include about $500 billion from Medicare over a decade and another $185 billion from Medicaid, these officials said.

By contrast, Democrats want $1.3 trillion in higher tax revenue, a similar amount in spending cuts and enough other savings elsewhere in the budget to reduce deficits by more than $3 trillion over the coming decade while financing a $450 billion jobs bill along the lines that President Barack Obama is recommending.

The officials who described the rival approaches did so on condition of anonymity, saying they were not authorized to provide details of the committee's confidential discussions. In private, each side also disparaged the other, providing yet another indication that the panel's deliberations have not shown significant progress.

Still, the exchange marked a quickening in the pace of activity by the committee after dozens of hours of closed-door meetings, and with time running out, senior leaders in both parties are becoming more involved. Another committee meeting was set for Thursday.

The panel of six Republicans and six Democrats has until Nov. 23 to recommend deficit savings of $1.2 trillion. But in fact, most if not all of the decisions must be made by early next month to give the nonpartisan Congressional Budget Office time to render precise estimates on their costs on future deficits.

Whatever the committee recommends must be approved by both houses of Congress in December if lawmakers want to avoid automatic spending cuts of $1.2 trillion across a range of federal programs.

There were signs of Democratic dissension one day after Sen. Max Baucus, D-Mont., outlined a proposal on behalf of his party's negotiators that included changes in large government benefit programs.

According to several officials, he called for $1.3 trillion in increased tax revenue over a decade, and $1.3 trillion in spending cuts. Another $1 trillion in savings would come from the presumed reduction of Pentagon costs in Iraq and Afghanistan and $500 billion more from a reduction in interest costs resulting from declining deficits.

Those savings would be on top of cuts that Congress approved earlier in the year of nearly $1 trillion.

For Democrats on the committee, it appeared that the most contentious of the items would slow the growth of monthly checks to recipients of Social Security and other benefit programs, curtail Medicare spending by $400 billion over a decade and Medicaid by another $75 billion.

Several Democrats said during the day that the presentation had the support of a majority of the six Democrats on the panel, leaving the impression that at least one, and possibly two, of the party's lawmakers had not signed on. They also stressed that Obama has previously endorsed each of the proposals they made, including the one to adjust the government's calculation for inflation in a way that curtails the growth of benefit programs.

Others suggested that Rep. James Clyburn, D-S.C., a member of the party's leadership, and Rep. Xavier Becerra, D-Calif., had not agreed to support the recommendations.

Aides to the two men would not confirm the accounts.

By contrast, Republicans appeared to avoid any ideological pitfalls in their counter-offer, pulling well back from a position that House Speaker John Boehner, R-Ohio, took earlier in the year in private talks with Obama.

In those discussions, Boehner and the president discussed legislation to enact tax reform that was assumed to result in economic expansion and increases in tax revenue of $800 billion over a decade.

After the collapse of those talks, Republicans have struggled in the ensuing months to avoid any conflict with Grover Norquist, a prominent conservative activist and author of a pledge not to raise taxes that many GOP lawmakers have signed.

In fact, tax reform has figured prominently in the deficit committee's private discussions, according to officials in both parties, and is viewed as a possible key to an agreement.

Under this theory, if Republicans are willing to agree that additional revenue that results from reform does not constitute a tax increase, it might entice Democrats to agree to savings from Medicare and other government benefit programs that account for much of the growth in federal spending in recent years.

Apart from the deficit committee's work, the official web site of the Republican-controlled House Ways and Means Committee sketches a plan to reduce the corporate tax from a current 35 percent to 25 percent, with unspecified provisions to broaden the tax base.

It also makes a favorable reference to a reform of the individual income tax system, without specifics.

[Associated Press; By DAVID ESPO]

Associated Press writer Andrew Taylor contributed to this report.

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