No deficit deal in sight despite prods by Obama

[November 14, 2011]  WASHINGTON (AP) -- Despite prodding from President Barack Obama, members of Congress' supercommittee concede no deal is in sight to meet their goal of $1.2 trillion or more in deficit savings over the next decade.

Instead, with only 10 days remaining until a Nov. 23 deadline, the panel is divided along partisan lines and Rep. James Clyburn, D-S.C., said Sunday the six committee members of his own party "have not coalesced around a plan."

Despite the difficulties, Clyburn and Republicans on the deficit panel all said they haven't given up hope of a deal by the deadline.

"But if this was easy, the president of the United States and the speaker of the House would have gotten it done themselves," said Rep Jeb Hensarling of Texas, the Republican chairman of the committee.

Obama mentioned his own unsuccessful negotiations with Speaker John Boehner in passing at a news conference in Hawaii on Sunday where he urged the members of the committee to show more flexibility. "It feels as if people continue to try to stick with their rigid positions rather than solve the problem," he said.

"There's no magic formula. There are no magic beans that you can toss on the ground and suddenly a bunch of money grows on trees," Obama added. "We got to just go ahead and do the responsible thing."

Despite some concessions, the two sides remain divided over the same basic issues that thwarted earlier deficit reduction efforts -- finding a mutually agreeable blend of tax increases and cuts in the largest government benefit programs.

Democrats on the supercommittee say they are willing to make significant reductions in programs such as Social Security, Medicare and Medicaid only after Republicans agree to higher tax revenue, including a larger bite out of the income of the wealthy.

Republicans say that the soaring deficits result from too much spending, and not from a shortage of revenue to the Treasury, and tax increases would crimp efforts to create jobs.

In an offer they said marked a significant concession, GOP members on the panel offered last week to raise taxes by $250 billion over a decade as part of an overhaul of the tax code that simultaneously would cut the top rate from 35 percent to 28 percent.

Democrats swiftly rejected that as a tax cut for the wealthy in disguise, and separately jettisoned an earlier proposal that would have slowed the growth in cost of living increases under Social Security.

There has been little, if any, indication of progress in the talks since then.

But Hensarling seemed to suggest in an interview Sunday that the two parties could find a way around the fast-approaching Thanksgiving deadline by coming to a general understanding with respect to raising new revenue, without actually having to agree on a process or specific remedy.

"There could be a two-step process that would hopefully give us pro-growth tax reform, which by the way, every other bipartisan effort that has said that some revenues have to be raised in this method," he told CNN in an interview. "That is again broaden the base, historically this is how we both produce jobs and more revenues for the government."

For the most part, however, officials in both parties seem to be positioning themselves publicly for political advantage in case the talks falter.

Hensarling said the panel has a goal of cutting deficits by $1.2 trillion, but added it also has a duty.

"The duty is to put forth legislation that actually addresses long-term structural debt. Now the president himself has said that the drivers of our debt are Medicare, Medicaid and health care. Nothing else comes close," he said, adding that Republicans have done that.

But Obama described the situation differently at a news conference after wrapping up an economic summit with leaders of Pacific-region nations.

"If we've got to raise money, it makes sense for us to start by asking the wealthiest among us to pay a little bit more before we start asking seniors, for example, to pay a lot more for their Medicare," he said.

Nor do the two sides agree about a fallback plan already in place to make sure deficits are reduced even if the panel fails to reach an agreement.

Obama said twice over the weekend Congress shouldn't count on being able to change the automatic spending cuts that would take effect beginning on Jan. 1, 2013.

About $450 billion in cuts would come from defense and the same amount from domestic accounts, with savings on interest payments making up the balance of a $1.2 trillion total.

Republicans, joined by Defense Secretary Leon Panetta, say the Pentagon couldn't sustain reductions of that magnitude, and Sen. Pat Toomey, R-Pa., said there would be a "lively debate" in Congress on changing which programs the cuts would affect.

Clyburn and Toomey appeared on Fox. Hensarling was interviewed on CNN.

[Associated Press; By DAVID ESPO]

AP reporter Erica Werner in Hawaii contributed to this story.

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