Super Committee Kicks Debate over U.S. Debt from Frying Pan into Fire
The super committee deadline draws near. Congress looks no closer to a compromise
The drama on Capital Hill ratchets up this week as the super committee nears the November 23 deadline by which time it must come up with $1.2 trillion in savings.
The latest development comes as Pennsylvania Senator Pat Toomey, a Republican on the super committee, offers up a GOP plan to raise $290 billion in taxes over the next ten years. That’s not a typo: a Republican senator proposes to raise taxes.
His plan cuts deductions for mortgage interest, charitable donations, and state and local taxes, targeting those who itemize deductions for a tax hike. Hardest hit will be taxpayers in the top two income brackets, those making more than $174,400.
At the same time the plan proposes reducing tax rates at every level of income, lowering the rate on the top bracket from 35% to 28% and the rate for the bottom bracket from 10% to 8%, and all the rates in between.
Unsurprisingly, Toomey’s offer has set off a round of vicious infighting within the GOP between the moderates willing to compromise on the issue of raising taxes and those staunchly opposed to any tax increase.
Already, 72 rank-and-file Congressional Republicans have sent a letter to their six colleagues on the super committee urging them not to compromise on tax increases.
Senator Toomey’s proposal is only the latest volley in a long round of back and forth between the super committee’s two partisan blocs.
Initially Democrats wanted $1.3 trillion in new revenue while Republicans insisted on absolutely no new revenue. Then Toomey agreed to accept a $300 billion increase in revenue, but only if Dems agreed to extend $3.8 trillion of the Bush tax cuts. Democrats made a counter offer of $400 billion in revenue, but only if the Bush tax cuts were shifted to the back burner.
The super committee’s Republicans are caught between a rock and a hard place, with liberals accusing them of only caring about the extension of the Bush tax cuts while fiscal conservatives condemn them for being weak on taxes.
Will there a compromise plan be reached? One, not to mention, that makes it past a Congressional vote and President Obama’s desk? Most observers of the political scene are skeptical.
Most likely the super committee, like the gridlocked and highly partisan Congress from which it issued, will punt, sending a round of default spending cuts into effect.
Does the committee have Congress’s knack for finding last minute deals on thorny budget issues? If they do come up with a compromise package, will it even matter? With the country about to enter in full-on election mode, we may not get a definitive answer on our new fiscal direction until next November.