Deficit-cutting panel gives up

Monday, November 21, 2011

WASHINGTON (AP) — Congress’ supercommittee conceded ignominious defeat Monday in its quest to conquer a government debt that stands at a staggering $15 trillion, unable to overcome deep and enduring political divisions over taxes and spending.

Stock prices plummeted at home and across debt-scarred Europe as the panel ended its brief, secretive existence without an agreement. Republicans and Democrats alike pointed fingers of blame, maneuvering for political advantage in advance of 2012 elections less than a year away.

The impasse underscored grave doubts about Washington’s political will to make tough decisions and left a cloud of uncertainty over the U.S. economy at the same time that Greece, Italy, Spain and other European countries are reeling from a spreading debt crisis and recession worries.

Lawmakers of both parties agreed action in Congress was still required, somehow, and soon.

“Despite our inability to bridge the committee’s significant differences, we end this process united in our belief that the nation’s fiscal crisis must be addressed and that we cannot leave it for the next generation to solve,” the panel’s two co-chairs, Sen. Patty Murray, D-Wash., and Rep. Jeb Hensarling, R-Tex., said in a somber statement.

They added it was not possible to present “any bipartisan agreement” — omitting any reference to the goal of $1.2 trillion in cuts over a decade that had been viewed as a minimum for success.

President Barack Obama — criticized by Republicans for keeping the committee at arm’s length — said refusal by the GOP to raise taxes on the wealthy as part of a deal that also cut social programs was the main stumbling block.

“They simply will not budge from that negotiating position,” he said.

Obama pledged to veto any attempt by lawmakers to repeal a requirement for $1 trillion in automatic spending cuts that are to be triggered by the supercommittee’s failure to reach a compromise, unless Congress approves an alternative approach.

Those cuts are designed to fall evenly on the military and domestic government programs beginning in 2013, and Defense Secretary Leon Panetta as well as lawmakers in both parties have warned the impact on the Pentagon could be devastating.

“In my four decades involved with public service, I have never been more concerned about the ability of Congress to forge common-sense solutions to the nation’s pressing problems,” Panetta, a former House budget committee chairman, said in a statement. “The half-trillion dollars in additional cuts demanded by sequester would lead to a hollow force incapable of sustaining the missions it is assigned.”

In reality, though, it is unclear if any of those reductions will ever take effect, since next year’s presidential and congressional elections have the potential to alter the political landscape before then.

The brief written statement from Murray and Hensarling was immediately followed by a hail of recriminations.

Senate Majority Leader Harry Reid, D-Nev., said Republicans had “never found the courage to ignore the tea party extremists” and “never came close to meeting us half way.”

But Sen. Pat Toomey, R-Pa., who authored a GOP offer during the talks, said, “Unfortunately, our Democratic colleagues refused to agree to any meaningful deficit reduction without $1 trillion in job-crushing tax increases.”

Said Gov. Rick Perry of Texas, a GOP presidential hopeful, “It’s amazing to what lengths he (Obama) will go to avoid making tough decisions.”

It was unlikely the outcome would materially improve Congress’ public standing — already well below 20-percent approval in numerous polls.

And the panel’s failure left lawmakers confronting a large and controversial agenda for December, including Obama’s call to extend an expiring payroll tax cut and unemployment benefits. Democrats had wanted to add those items and more to any compromise, and lawmakers in both parties also face a struggle to stave off a threatened 27 percent cut in payments to doctors who treat Medicare patients.

Based on accounts provided by officials familiar with the talks, it appeared that weeks of private negotiations did nothing to alter a fundamental divide between the two political parties. Before and during the talks, Democrats said they would agree to significant savings from benefit programs like Medicare, Medicaid and Social Security only if Republicans would agree to a hefty dose of higher taxes, including cancellation of Bush-era cuts at upper-income brackets. In contrast, The GOP side said spending, not revenue, was the cause of the government’s chronic budget deficits, and insisted that the tax cuts approved in the previous decade all be made permanent.

The Democrats’ “idea was this was the opportunity to raise taxes,”’ said Sen. Jon Kyl of Arizona, the Senate’s second-ranking Republican and a member of the supercommittee. “It didn’t matter what we proposed; the price of that was going to be $1.3 trillion in new taxes,” he added in a CNBC interview, although Democrats made at least two offers that called for smaller amounts of additional tax revenue.

The talks also were hampered by internal divisions within both parties.

Republicans offered a plan crafted by Toomey about two weeks ago that included an additional $250 billion in tax revenue through an overhaul of the tax code that included reducing the top tax rate from 35 percent to 28 percent. Some Republicans criticized it as a violation of the party’s long-standing pledge not to raise taxes.

Even some in the GOP leadership, including Senate Republican Leader Mitch McConnell of Kentucky and House Majority Leader Eric Cantor of Virginia, declined to endorse it in public.

At the same time, Democrats ridiculed it as a tax cut for the rich in disguise — even privately criticizing Sen. Dick Durbin, D-Ill., when he said it could signal a breakthrough — and it failed to generate any momentum toward compromise.

Reid and others also accused Republicans of bowing to the wishes of Grover Norquist, an anti-tax activist whose organization has gathered signatures from GOP candidates on a petition pledging never to raise taxes.

And Democrats had problems of their own. An offer presented by Sen. Max Baucus, D-Mont., to cut about $3 trillion from future deficits failed to win the backing of two of the six committee members of his own party. Officials said they objected because it would have curtailed future cost-of-living increases for Social Security recipients, some liberals said in remarks on the Senate floor they opposed it and Republicans criticized them for intransigence.

Baucus jettisoned it from a subsequent offer that also slashed an earlier demand for tax revenues.

The panel’s failure marked the end of an extraordinary yearlong effort by divided government to grapple with budget deficits that lawmakers of both parties and economists of all persuasions agreed were unsustainable.

More like this story

wyriontair 1 year, 6 months ago

Members of congress that abdicated their responsibility to their constituents by supporting this ridiculous committee should be voted out and for the president who immediately blamed Republcans for the failure was outrageous. It is not the "tea party" people that are holding our economic fate, it's the Democrats, who by the way, hold 2 branches of government. The only thing Democrats ever say is "tax the wealthy", "it's Bush's fault", "it's the Tea Party Republicans", "shared sacrifice", "balanced approach", Why haven't those wealthy Democrats, Kerry, McCaskill, Pelosi, Schumer, etc. written checks to the Treasury Department to pay "their fair share"??? The only thing increasing taxes does it hurt the middle class. The presidents czars should be eliminated, they are costing "we the people" millions, his own "jobs czar" has moved jobs to China and his company hasn't paid any taxes, how many tax breaks do the Unions get? The next "super committee" should be made up of "we the people" who balance budgets and decide what can get paid week to week, not career politicians in the 1% tax bracket, .

Sequoia 1 year, 6 months ago

Vote out anyone who took the "No Tax Pledge." Our representatives in Congress took an oath to protect and defend the Constitution. They owe a duty to the American people, not Grover Norquist. Vote out anyone who tells you that our enemies are "liberals" or "conservatives." Our enemies are the problems we face.

Sequoia 1 year, 6 months ago

That's just not true. Revenue lost to tax breaks ($1.2 trillion) is actually higher than income tax collected ($1.1 trillion), defense spending ($744 billion) and discretionary spending ($671 billion). Those tax breaks are the product of "starve the beast" movement conservatism.

The fact is, reforming the tax code will fix more of our fiscal problems than cutting spending alone.

The "No Tax Pledge" is just a signal of ideological purity. It's a marketing gimick that has become an ideological straightjacket, which is the true enemy of conservatism, and of human thought. I don't want politicians running around trying to prove their purity. I don't want purity. I want down-and-dirty pragmatism and common sense.

And look at the polls: that's what the vast majority of U.S. citizens want, too. Let's get back to the true conservative principles of fiscal responsiblity and common sense.

evenkeel 1 year, 5 months ago

Sequoia, Here is some common sense for you: Congress has a spending problem.
Read the latest column from Thomas Sowell for an analysis of the super-committee "failure". Also, read the latest column from Charles Krauthhammer about the difference between tax rates and tax revenue.

tonto_goldberg 1 year, 5 months ago

I doubt that Sequoia or anyone else but you would consider Thomas Sowell an authority on much of anything except buzzwords. That's probably why you like his column. Krauthammer has at least the ability to write a decent new column every once in a while.

Sequoia 1 year, 5 months ago

Evenkeel, can you point me to those columns?

Sequoia 1 year, 5 months ago

Okay, I found those columns.

Let me take the CK column first: In general, I agree with him. I've long been in favor of tax code reform. If we can get more money from code reform instead of raising rates, let's do it. Now, as to whether the problem of Grover Norquist is a "myth," I would disagree with that. Norquist really is a problem. Just ask George HW Bush. Republicans know that if they don't toe the "no tax" line, GN can line up HUGE money to go against them. The pressure to stay in line and not be a "RINO" is very real for Republicans, and it makes it hard for them to think and act independently. And this actually bothers some Republicans who feel a responsibility to govern (rather than just make ideological noise and get a talk show).

I would also disagree with a point that both CK and Sowell made: that Obama should have been more involved with the Super Committee. What on God's green earth makes him believe that Obama's involvement would have made any difference? If Obama had been invested in the Supercommittee's success, that creates the incentive for his opponents to torpedo it.

Personally, I thought the whole Supercommittee thing was stupid. Congress is afraid to make tough choices. It doesn't matter if there are 6 or 600 of them. To reduce the deficit, you have to be ready to make everybody mad.

As for the Thomas Sowell column, well... its just partisan hackery. It seems to pretend that the national debt is all because of Democrats, and that Republicans had nothing to do with it. There's not even a single data point in there... no numbers, no facts. There's no research. In short, there's no effort here. There's nothing new or interesting or surprising, or even worth reading. It is the journalistic equivalent of microwaved leftovers. The writing is just plain poor. Its really hard to take stuff like this seriously, and the fact that this passes for intelligence is one of the reasons why I'm on my crusade against movement conservatism. Conservatives used to be intellectual heavyweights.

Graceful, you can call me "liberal" or any name you want. (I'd call you names, too, but you'd just whine about it.) I mean, it was either you or Evenkeel who told me Bob Dole was "not a conservative," so... whatever. The habit movement conservatives have of casting out those whose ideology is not pure is another motivation for my crusade against them.

Go ahead, call me names. I won't say that it is a sign of your moral decrepitude or whatever you say whenever anyone gives you a taste of your own medicine. Going against the current conservative grain is not easy, and I've been called a lot worse. You're going to have to up your game.

asb 1 year, 5 months ago

Well done. I agree with your evaluation of both writers, but would add that while tax reform language seems great, even coming from CK, consider what he's really after, tax reductions for higher income and corporate concerns. This is similar to "Tort Reform," which sounds good until you look at who's pushing it and who benefits most from the language that makes up most such efforts. Sowell is indeed a hack, and has been for the 30 years I've been reading him.

tonto_goldberg 1 year, 5 months ago

Graceful has written that Sowell and Bachman are "awesome". I would not agree, except that they are getting a lot of money from your "movement conservatives" to say and write that stuff. I could write a repetitive column full of buzzwords on a regular basis for that kind of money. You could as well. We're missing the gravy train - or maybe that only looks like gravy.

Sequoia 1 year, 5 months ago

Movement conservatism is a racket full of scam artists like Palin and Cain. Say the "right" things (pun intended), act like a know-nothing buffoon, and people like Graceful will buy your book, read your column, or watch you on TV. Never underestimate the willingness of people to pay out the wazoo to hear their own opinions reflected back to them. But what conservative principles do they actually advance? None. They make noise, get rich off suckers, and don't accomplish anything. The Republican primary, for example, is turning into a triumph of style over substance.

spelchek 1 year, 5 months ago

The dems are following the lead of their bretheren in WI. When the tough get going, run away.

evenkeel 1 year, 5 months ago

Sequoia, may I suggest that you consider a change of direction? Instead of trying to make conservativism more liberal, please work on making liberalism more conservative. Take your crusade in that direction.

Sequoia 1 year, 5 months ago

The Democratic Party has already made liberalism more conservative. I'm trying to return conservatism to what it used to be (an intellectual disposition) as opposed to what it is now (an ideology).

evenkeel 1 year, 5 months ago

Sure Sequoia. Name for me those conservative Democratic politicians in Washington.

Certainly that bastian of conservatism, the Democratic Party, has purged all the radicalism out of liberalism. How can we tell? Well, of course, exhibit one is that the Federal government is only extracting 25% of the GDP out of the economy! That is a pittance.

So you are providing a service for conservatives, correct Sequoia? A roadmap to get out of the wilderness and meet our opponents halfway. Then things can get done- things like deficit cutting. So now what is needed is for conservatism to lurch left.

We conservatives are all nostalgic for those halycon days when Bob Dole was leading us to victory after victory. Pity Bob has left the scene. How about we turn to Oympia Snowe and Susan Collins for conservative leadership? Or maybe we can coax Arlen Spector out of retirement. It is weird that conservatives rejected Arlen. Just proves how spiteful we are. If we don't get 15% of what we want we will turn on one of our own like Arlen Spector like rabid dogs. We are spiteful that way.

What we conservatives need to do is meet liberals half way. Let's visualize it as if using a map. We conservatives are in Saint Louis and the liberals are in KC and so what we need to do is meet halfway, right? Let's say, Blue Springs. This what you have in mind Sequoia?

Sequoia 1 year, 5 months ago

Well, the left was pretty vibrant in the country back in the 20s-40s. There was an actual active Communist Party. I know some of you like to say that any government program is some kind of proto-communism, but I think that kind of hysteria is pretty stupid.

There are no true leftists (as in, total government control of U.S. production) anywhere near power in the U.S. for a long time. Yet, among conservatives, a person can argue some notions that are quite radical and people still take them seriously. What I have in mind, Evenkeel, is that it seems like right-wing crazy talk is tolerated at higher levels of power than left-wing crazy talk.

To me, the Democrats are like scared little puppies. Whenever the right barks, Democrats roll over on their backs. I think you both probably listen to too much Fox and talk shows, which tend to over-hype the extent and nature of the liberal menace. It feeds the sense (most clearly expressed in Graceful's posts) that conservatives are virtuous warriors beset on all sides by evil liberals, which is money in the bank for conservative media.

In my view, conservatives should realize that evil is not inherent in particular institutions or ideologies... evil comes from the fallen nature of each individual soul. This is why we resist the liberal temptation to blame systems above all else. That is why true conservatives must be inherently suspicious of any system that claims to be unerring, and any person who claims to be holier than thou. Conservatives should always be skeptical... even of their own orthodoxy!

I don't think conservatives need to "meet liberals halfway." Conservatives need to be asking: Will this government action work? Is it worth it? Are we sure this isn't going to backfire? When the answer is really no, then fight. But admit when the answer is "yes."

The goal is not to stop all government action. Only stupid government action.

wcywing 1 year, 5 months ago

what happened when W and GOP had the senate and the house. wasn't that supposed to be the era of smaller gov? it got bigger, two wars, high deficiet spending, the making of a police state with the un-patriot act and the TSA who fondles people. hmm.... i miss Bill Clinton..

evenkeel 1 year, 5 months ago

Sequoia, I cannot seem to agree with you much. I think it is because your ideas are wrong. So the liberals have rolled over on their backs while growing government to the level that it is consuming 25% of GDP? That does not make any sense. A proposed cut of $2 billion in a budget of $3.8 Trillion is considered a "draconian cut" by liberals. That is not puppy-like behavior.

Your Grover Norquist stuff is just a red herring. Came from the liberals. You gulped it down.

Try again please. Tell me how you propose government is going to shrink? With a tax hike?

You do realize don't you that when an agreement is made to raise taxes in exchange for cuts in spending, the tax hike occurs and the spending cuts somehow, mysteriously, elude the politicians? It is summarized quite humorously in the column "I'll gladly pay you Tuesday for a tax increase today" by Ann Coulter. (Oh, save yourself the trouble...I KNOW you don't like her. She is so... conservative,... ooh,... icky. Read it anyway.)

Sequoia 1 year, 5 months ago

I've been complaining about Grover Norquist and the "starve the beast" for years. Probably before you and most liberals ever heard his name. His strategy calls for bankrupting the country. It is terribly irresponsible, hardly conservative, and far too many important have signed up for me to dismiss it as a red herring.

And it isn't just liberals who spend... it was Dick Cheney who pressed for the Iraq invasion and the Bush tax cuts at the same time, against the advice of Bush's Treasury Secretary, whom Dick Cheney shot down with the quote "Deficits don't matter." Where were you when Dick Cheney said "Deficits don't matter"? Where was your precious Ann Coulter? You were selling out true conservative principles to get on the war train. Spending trillions of dollars to make the world a better place only to have it backfire... we can have whatever we want and not pay for it... how liberal of you! (Which reminds me... where were liberals back then? The puppies were on their backs, afraid to be called "soft on terror.") Not too many people had the guts to speak about this back then, but Gary Johnson, Ron Paul and Barak Obama come to mind. Interesting bedfellows, eh? If there was ever any time when conservatives needed to step up and be conservative, it was then. You failed, and that's when I knew for sure that "movement conservatism" was a complete and utter (and dangerous) sham.

So, sorry if I don't take your current concern about the deficit at face value, because I'm sure it will disappear as soon as the person in the White House has an "R" by his name. Mark my words.

Personally, I don't consider "shrinking government" to be a worthy goal in and of itself. For me, it is all about the cost-benefit analysis. In hard financial times, that analysis has to be more rigorous than usual, but in times of high unemployment, something must be done. This is the problem of our generation, and conservatives need to present a real solution that works for everyday people. Right now, they don't have one because they've become too rigid. That's why I'm here. I want to shift the debate from "should government be big or small" to "should government be smart or stupid." I'll go with "smart." How about you?

And you're right, I don't like Ann Coulter, or anyone else who confuses "outrageous" with "interesting." Gimme Peter Viereck any day. But, if one person reading this can realize that they can reject Ann Coulter AND still be a conservative, I will have done my job.

evenkeel 1 year, 5 months ago

wcywing, have you ever noticed the phenomena that occurs frequently: a person writes a sentence with the word "fondles" in it and soon after the same writer seems to write "Bill Clinton". Weird. Some kind of subliminal or subconscious association. Maybe the federal government can appropriate a few billion bucks studying that.

I guess we can agree W was no conservative. (Did you expect someone to leap up and defend W?) Do you think President Gore or President Kerry would have shrunk government? I did not. I expected W to and he let me down.

W talked like a conservative. He did not govern like one. Bad for us all. Pointing fingers at politicians of the past does not make a $15 Trillion debt any smaller. Who will make it smaller?

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