Supercommittee Deadline Approaches

US Capital Reflection

Image by terren in Virginia via Flickr

With a November 23rd deadline rapidly approaching, members of the congressional “supercommittee” are trying to jumpstart negotiations by offering competing deficit reduction plans. According to news reports, the latest Democratic proposal would cut the deficit by about $3 trillion through a combination of spending reductions and tax increases.  The package includes:

  • $575 billion in Medicare and Medicaid cuts;
  • $400 billion in appropriations cuts;
  • $250 billion from reductions in farm subsidies and cuts in federal benefits;
  • $1.3 trillion in higher taxes;
  • Reform of the method for calculating Social Security benefit increases (see my 7/19 “chained” CPI post)

Republicans countered with a $2.2 trillion deficit reduction package that does not include any tax increases. Proposed GOP cuts would fall more heavily on federal health programs, while protecting more defense spending.

Meanwhile, a bipartisan group of 100 House members circulated a letter urging the supercommittee to revive the “grand bargain” that failed during the Obama-Boehner negotiations over the debt ceiling by cutting as much as $4 trillion from the deficit over the next decade. Past efforts at securing cuts of this magnitude have foundered due to Republican and Democrat reluctance to embrace the combination of revenue increases and entitlement reductions needed to achieve it.

Unless Republicans and Democrats can agree on at least $1.2 trillion in savings over the next decade, automatic spending cuts will be triggered.

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