Supercommittee on the Edge of a Cliff? Talks Reach Tense Moment

With just two weeks until its deadline to reach agreement on cutting $1.2 trillion to $1.5 trillion from the federal deficit over the next 10 years, the Joint Select Committee on Deficit Reduction today reached a tense and prickly moment.

The so-called supercommittee's 12 members last met for a full meeting more than a week ago. There are currently no additional meetings scheduled, and one Republican aide described the situation as the critical moment right before negotiations could potentially fall apart.

Reports of a complete breakdown of the supercommittee swept through Capitol Hill this afternoon as Sen. Rand Paul, R-Ky., told conservative radio host Sean Hannity that Democrats on the supercommittee have walked away from negotiations.

"I have news straight from sources close to the supercommittee that the Democrats have walked away from the table and they are refusing to talk to the Republicans about a deal," Paul said. "They will not counter any offers and that basically there is an impasse, and it's starting to look like [they] don't want any deal at all."

When asked about his comments by ABC News today, Paul, who is not a member of the supercommittee, repeated his assertion, adding that the six Democrats who sit on the supercommittee are "no longer negotiating."

Not so, said Democrats on the supercommittee.

When asked about the status of the negotiations today, Sen. Patty Murray, the Democratic co-chairwoman of the committee, told ABC News while leaving the Senate floor that the reports of Democrats walking away from negotiations are not true.

"We haven't stepped away from anything," said Murray, D-Wash. "There's a lot of conversation and a lot of work going on."

Aides said that although there were no full meetings with all 12 members of the supercommittee scheduled, smaller side meetings are taking place on a regular basis.

Capitol Hill sources quietly suggested this week that Democrats refused bipartisan meetings of the full committee for the last several days until Republicans come up with what the Democrats consider a "serious" counteroffer.

Murray would not specifically address that claim, but said both parties are working with an acute awareness of the Nov. 23 deadline.

"I'm not going to answer the specifics of that," Murray said. "I will just tell you that all of us, Democrats and Republicans, I believe, are working."

A Senate aide with knowledge of the inner-workings of the supercommittee would not characterize the Democrats as walking away from the table, and stressed that smaller breakaway meetings continue. The aide said that if there was a reason for the full committee to meet they would.

On Tuesday, Republicans on the supercommittee indicated that they would be open to some tax increases as part of a broader deficit deal that includes entitlement and tax reform. A plan offered by Sen. Pat Toomey, R-Pa., would raise federal tax revenue by about $300 billion over the next 10 years by limiting tax breaks such as mortgage interest deductions for Americans in return for lower income tax rates.

The GOP idea was a non-starter with Democrats on the supercommittee who contend that they've shown a willingness to compromise on spending cuts and entitlement reform.

According to a Democratic analysis of the Toomey proposal, which was circulated around Capitol Hill today, the Republican plan "would result in massive tax cuts relative to current law because it makes the Bush tax cuts permanent."

"Ultimately, it would also bring us even farther away from balancing the budget," the Democratic memo read. "The data demonstrate that our tax system would become dramatically less progressive under the tax system envisioned by Senator Toomey than it would be even if all the Bush tax cuts were made permanent. It would be a windfall for millionaires, and a large tax increase for struggling working families."

But today, the Senate's number two Democrat, Sen. Dick Durbin, D-Ill., called the Republican plan a "breakthrough" and added that he is "encouraged" that Republicans have opened the door to tax increases.

"The fact that some Republicans have stepped forward to talk about revenue, I think, is an invitation for Democrats to step forward and talk about entitlement reform as well as spending cuts," Durbin said at an off-camera briefing today. "Therein lies the core of an agreement."

"There's no excuse for not getting a result," Sen. Lamar Alexander, R-Tenn., told reporters today. "You know, they're right at the edge of the cliff. They either will ascend the mountain or fall off the cliff."