Details of Dem Proposal Leak Out of Super Committee, GOP Rejects Tax Increases

Oct 26, 2011 5:29pm

Democrats have proposed a framework for the Super Committee that multiple aides confirm is around $3 trillion in deficit reduction over the next decade through a cocktail of cuts to entitlements, including Medicare, and as much as $1.3 trillion in new tax revenues.

Democratic aides close to the negotiations confirmed that at a closed-door meeting Tuesday, Sen. Max Baucus, D-Mont., presented a plan on behalf of a majority of the Democrats on the 12-member panel. He urged the committee to resume where President Obama and House Speaker John Boehner left off in negotiations on a so-called Grand Bargain, which included a balanced plan to raise new tax revenue, increase the Medicare eligibility age and use a more stingy method to calculate inflation and determine Social Security benefits.

With a majority of Democrats from the committee in agreement with the proposal, the case was made for the committee to consider new revenue increases, an idea Republicans on the panel rejected outright, according to sources.

Sources say this is not the first time Democrats have offered the Joint Select Committee on Deficit Reduction a package containing various ratios of revenue increases against spending cuts. This is just the first proposal to leak to the media during the course of the highly sensitive negotiations.

One Democratic source close to the negotiations said that Democrats “put forward serious ideas that demonstrated that they were willing to make the tough compromises that a bipartisan deal would take, calling on Republicans to respond to see if they’re willing to make compromise necessary.”

Republicans on the committee, including co-chair Jeb Hensarling and Sen. Jon Kyl, refused to comment late Wednesday evening as they left another private closed-door meeting with the full committee, but Hensarling suggested that Democrats are not the only ones to have put a plan on the table.

“We continue to hold discussions and make progress. I’m sorry to disappoint y’all. You know how it troubles my heart,” Hensarling, R-Texas, said. “There are lots of plans to discuss on the table.”

“We don’t talk about what we are or are not talking about in our meetings,” Kyl, R-Ariz., said as the meeting ended.

Aides familiar with the Democrats’ proposal suggest savings would be would be split between tax increases and spending cuts, including the ballpark of $500 billion in fresh savings from entitlements like Medicare and Medicaid.

Republican aides refused to comment on the leaks Wednesday, but the last time news began to trickle out of the Grand Bargain over the summer, the GOP swarmed in opposition to the notion of new taxes.

Not all six Democrats on the panel were on-board with the plan though, aides said.

When Rep. James E. Clyburn, one of three House Democrats on the panel, left the meeting he confirmed its existence. 

“I’ve heard of it,” he said as he brushed by reporters without tipping his position on the Democratic proposal.

One House Democrat learning of the news issued a statement condemning the proposal for “playing with the future of our citizens whose lives depend on the viability of Medicaid and Medicare.”

“If these reports of massive cuts to Medicaid and Medicare are true, I will do everything in my power to stand against them.  I will join forces with my colleagues and do all I can to defeat them,” Rep. John Lewis, D-Ga., wrote in a statement. “The people of this country are looking for fairness.  They are sitting in and sitting down to protest the unwillingness of government to legislate with their best interests in mind.  These proposals rob from the poor, the sick and the elderly, the very least among us.”

Democratic sources say the proposal is “not take it or leave it” but puts the ball in the GOP’s court “to come back and say they’re serious too, and interested in having a conversation of a balanced approach that a bipartisan deal would take.”

“Republicans have stated that everything is on the table, but at the same time they don’t want to increase revenue,” an aide said. “Their response to the set of [Democratic] ideas was negative. The hope is they come up with a counteroffer or serious ideas that would move ball down field and bring the committee toward a bipartisan plan.”

Earlier Wednesday, the committee held its first public meeting in more than a month before another afternoon session behind closed doors.

The committee will hold its next open hearing next Tuesday, Nov. 1, when the principal architects of two other deficit reduction proposals will testify. Alice Rivlin and former Sen. Pete Dominici will head the first panel while Alan Simpson and Erskine Bowles will appear before the committee on a second panel to discuss their alternative savings packages.

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