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Deficit Panel Heads Toward Its Likely Demise with Little Drama

Nov 21, 2011

By Paul M. Krawak and Richard E. Cohen, CQ Staff

The joint deficit committee remained deadlocked as the panel headed toward a likely announcement Monday that it had failed in its months-long quest to reach an agreement to reduce the deficit by at least $1.2 trillion.

While lawmakers on the Joint Select Committee on Deficit Reduction fanned out on the Sunday talk shows, the two sides evidently held no meetings Sunday, although some panel members exchanged views by telephone, according to congressional aides. Up against the committee’s deadline for action, congressional leaders who were actively involved last week showed no sign of trying to broker a deal.

“No traction. Same as yesterday,” one Senate GOP aide said Sunday.

The co-chairmen of the panel, Sen. Patty Murray, D-Wash., and Rep. Jeb Hensarling, R-Texas, were expected to issue a statement as early as Monday announcing that the panel was unable to reach an agreement to bridge deep partisan differences over curbing entitlement spending and raising tax revenue.

Under last summer’s debt limit increase law (PL 112-25), the committee has until Nov. 23 to vote on a proposal. But as a practical matter, the panel must have an agreement by midnight Monday to meet a statutory requirement of 48 hours’ notice of any proposal.

The standoff in the committee mirrored the gap that divided Republicans and Democrats earlier in the year, leading to the breakdown of deficit reduction negotiations between President Obama and House Speaker John A. Boehner, R-Ohio. It was the collapse of those talks that ultimately led to the creation of the joint committee as a way to resolve the policy impasse.

As six members of the panel, including the co-chairmen, traded blame on the Sunday interview shows, it was clear that the $1.2 trillion in automatic, across-the-board spending cuts that are scheduled to begin in January 2013 are now a fallback position to blunt the absence of a deficit deal.

Saving Defense

Republicans have already begun to look for ways to adjust the automatic cuts, known as a sequester, to soften their impact on the Pentagon.

The Defense Department is slated to shoulder half of the automatic cuts, amounting to $600 billion through 2012. The automatic cuts were enacted as part of the debt limit law, and intended to serve as a hammer to force the joint committee to act.

Defense Secretary Leon E. Panetta has warned that the sequester might reduce spending by an estimated 20 percent compared with projections sent to Congress in February. The result might require termination of the F-35 Joint Strike Fighter program and reductions in the size of U.S. ground forces to pre-World War II levels.

Senate Minority Whip Jon Kyl, R-Ariz., a member of the joint committee, reiterated his opposition to such deep defense cuts in an appearance on NBC’s “Meet the Press” on Sunday.

“We do have the opportunity, even if the committee fails to work around the sequester, so that we still have $1.2 trillion in savings over 10 years but it’s not done in the very draconian way that Secretary Panetta is referring to,” Kyl said.

Public Unhappiness

The apparent collapse of the joint committee’s efforts is likely to add to the already low public opinion of Congress. In a survey released Nov. 14, Gallup found that 13 percent of respondents approve of Congress — a record low and a steady drop from the 24 percent approval rate recorded in May.

Gallup reported that if the joint committee does not reach an agreement, “these measures of the public’s faith in Congress are likely to drop even lower,” based on its earlier findings that the public wants Congress to reach a compromise.

The White House urged Congress on Sunday to exert fiscal discipline while defending Obama’s decision to remain detached from the joint committee’s negotiations after issuing recommendations to the panel two months ago.

“The president was engaged in daily discussions throughout the summer on how to reduce the deficit in a balanced way and in September he put forward a very detailed set of recommendations to the joint select committee to achieve deficit reduction well beyond the committee’s mandate,” White House spokeswoman Amy Brundage said. “Avoiding accountability and kicking the can down the road is how Washington got into this deficit problem in the first place, so Congress needs to do its job here and make the kind of tough choices to live within its means that American families make every day.”

The joint committee’s odds of success have been declining for days. Most recently, Democrats rejected a Republican offer to go part way toward the deficit reduction goal with a $643 billion proposal that relied on cuts in domestic discretionary spending and non-health care mandatory programs to soften the impact of a sequester. Democrats dismissed the Republican offer on Nov. 18, insisting that any bipartisan plan would have to include significant tax revenue as well as spending cuts.

Several members of the panel met Nov. 19 in a last ditch effort to keep negotiations alive. But by Sunday, although lawmakers continued to insist that a deal was possible, they provided no signs that a breakthrough might be in the cards.

Many Offers, No Deals

Since the joint committee began meeting in early September, Democrats and Republicans on the panel have offered several proposals, including a $2.3 trillion plan by Senate Finance Chairman Max Baucus, D-Mont., and a $1.5 trillion proposal by Sen. Patrick J. Toomey, R-Pa.

Republicans have criticized Democrats for refusing to accept any spending cuts or substantive changes to entitlement programs without tax increases of a size that the GOP said would hurt the economy. Democrats have countered that Republicans refused to consider any steps that would ensure top earners provide a share of the savings through higher taxes — what they called a “balanced” solution.

Alan K. Ota and Joseph J. Schatz contributed to this story.

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