"Super Committee" Deadlocked as Deadline Approaches

They have been meeting for two months, arguing over concepts and ideas already hashed out by three other groups over the past year. But just 10 days before the deadline, members of the congressional "super committee" created to forge a deficit reduction deal indicated Sunday that they remain hung up on basic issues of tax and entitlement reform that have previously stymied agreement.
Texas Rep. Jeb Hensarling, the panel's Republican co-chair, told CNN's "State of the Union" that the only solution possible might be a two-step process in which the bipartisan committee sets a figure for increased tax revenue that congressional committees would then implement through legislation.

The continued political wrangling over how to reform the tax code and entitlement programs such as Medicare and Medicaid as part of a broad deficit reduction plan causes consternation for two senators who were part of the "Gang of Six" that put together their own plan earlier this year.

Republican Sen. Tom Coburn of Oklahoma told CNN that a lack of leadership from the White House and top congressional Democrats and Republicans is preventing a compromise.

The panel created under the debt ceiling deal earlier this year has until November 23 to reach an agreement on at least $1.2 trillion in deficit reduction over the next decade.
If it works out an agreement, Congress must vote on the unamended plan by December 23. Failure to reach an agreement or gain approval by Congress and President Barack Obama would trigger $1.2 trillion in automatic spending cuts scheduled to take effect in 2013.
Hensarling said Sunday that the process will fail unless Democrats are willing to accept significant reforms to entitlement programs such as Medicare and Medicaid, the government-run health care systems for the disabled, poor and elderly.
Democrats, meanwhile, say any solution must be balanced with spending cuts, entitlement reforms and increased tax revenue.

Republicans oppose any kind of tax increase, particularly the call by Obama and Democrats to raise rates of wealthy Americans to increase their share of the tax burden. However, the Republican position has shifted to accept increased tax revenue through reforms that would lower rates by expand the number of payers and also end some subsidies and loopholes.

Republicans have offered a proposal with $1.4 trillion in deficit reduction, including $500 billion in new revenue from capping individual deductions while cutting all six income tax rates by roughly 20%. Under the proposal, the top rate would fall from 35% to 28%.
Democrats immediately rejected the plan as insufficient, saying it would end up decreasing revenue in the long run by permanently extending tax cuts from the Bush administration that are scheduled to expire at the end of 2012.

Both plans call for around $4 trillion in deficit reduction by a combination of spending cuts, tax increases and reforms to entitlement programs such as Social Security, Medicare and Medicaid.
Another deficit commission in 2010, headed by former White House Budget Director Alice Rivlin and former Senate Budget Committee Chairman Pete Domenici, R-Wyoming, also called for a comprehensive approach including higher taxes, frozen spending and entitlement reforms.
A so-called "grand bargain" along those lines discussed by Obama and House Speaker John Boehner, R-Ohio, earlier this year fell apart over differences on tax hikes on the wealthy sought by Democrats and Medicare restructuring sought by Republicans.