By Erik Wasson - 10/26/11 03:49 PM EDT
Democrats on the congressional supercommittee this week presented Republicans with a plan to cut the deficit that included billions of dollars in stimulus spending, aides told The Hill.
In a private meeting of the deficit panel Tuesday, Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, presented a proposal backed by a majority of Democrats on the panel that includes more than a trillion dollars in tax increases. The revenue would partially cover stimulus spending for the economy, aides said.
More than 50 percent of the deficit reduction in the plan would come from tax increases, one source said.
The plan from Democrats approaches the $3 trillion in deficit reduction that was included in the "grand bargain" that lawmakers debated over the summer.
Democrats have said from the beginning that the supercommittee should produce a “jobs plan” that includes “investments” to help the economy.
The supercommittee is charged with devising a plan that will cut at least $1.2 trillion over 10 years from annual deficits, but deep divisions exist on the panel over whether to raise taxes and cut entitlements to meet that goal.
The members met again Wednesday afternoon and Democrats were looking to see if the GOP would present an alternative path to the grand bargain.
Heading into the meeting, Baucus was asked about his presentation. "I'd like to think everything I suggest to anyone is fair," he said.
Kerry said he is looking for as big a deal as possible.
The Tuesday offer was not the first framework offered in the talks by Democrats but it was the most detailed.
The grand bargain is not identical to the cuts offered by President Obama to House Speaker John Boehner (R-Ohio) during the summer’s negotiations over raising the debt-ceiling limit, but there is great deal of overlap including regarding entitlement cuts.
At a serious and tense public hearing earlier Wednesday, Sen. Patty Murray (D-Wash.) acknowledged the supercommittee is running short on time to complete its work, but said she is “hopeful” the Nov. 23 deadline can be met.
“We aren’t there yet, but I'm confident we are making progress. And I'm hopeful we are moving quickly enough to meet our rapidly approaching deadline,” the supercommittee co-chairwoman said during the hearing, the panel’s first in public since Sept. 22.
More from The Hill
♦ Debt panel is stoking skepticism
♦ Business execs: Supercommittee failure not an option
♦ GOP chairman to offer foreign tax overhaul proposal
♦ Europe 'most serious risk' to American jobs, Treasury official says
♦ Rangel for wealth redistribution, says rich didn't sacrifice for war
Murray reminded her 11 colleagues that non-defense discretionary spending constitutes less than one-fifth of all federal spending and noted that the debt-ceiling deal that established the supercommittee already cut $800 billion from the deficit.
“So as this committee works together toward a bipartisan plan to reduce the deficit, we need to keep in mind the cuts that have already been made, the role discretionary spending plays in our overall deficit and debt problem, and the impact irresponsible slashing could have on our economic recovery and middle-class families across the country,” she said.
Murray emphasized that she is “willing” to compromise and said she knows "many of my colleagues are as well.” She said that the consequences of failure, which would trigger automatic defense cuts, could hurt national security.
Co-Chairman Jeb Hensarling (Texas) emphasized the need for the supercommittee to tackle Medicare, Medicaid and Social Security. The GOP congressman said any changes to discretionary spending would be “helpful,” but alone would not allow the supercommittee to meet its goals.
He said the supercommittee must devise “quality healthcare and quality retirement security solutions” in order to meet its mandate to “significantly improve the short-term and long-term fiscal imbalance”
“Everything else we do including dealing with discretionary budget will be helpful but nothing else will solve the structural debt crisis,” Hensarling said.
Many Democrats feel discretionary spending has already borne the brunt of deficit-reduction efforts, but Republicans say more programs can be cut.
Rep. Chris Van Hollen (D-Md.) said he wants the supercommittee to focus on two goals: trying to "get the economy moving again" and putting in place "a long-term deficit-reduction plan."
Another Democrat on the panel, Sen. John Kerry (Mass.), pushed for a $3 trillion reduction package — far beyond the panel's $1.2 trillion mandate.
CBO Director Douglas Elmendorf reiterated at the hearing that CBO must have a deal to score by early November in order for the supercommittee to have legislative language ready by Nov. 23.
"That leaves us looking at the beginning of November, which we are very well aware as you are is not very far away," Elmendorf said.
Elmendorf said $3 trillion in deficit cuts, on top of the $800 billion cut in the August deal, is needed to stabilize the national debt.
Sen. Pat Toomey (R-Pa.) pushed back on the calls for stimulus during the hearing, getting Elmendorf to acknowledge it is impossible to prove that the stimulus law passed in 2009 worked.
The dozens of lobbyists and protesters in the audience were treated to other clues as to the supercommittee’s thinking.
Baucus asked about caps to discretionary defense spending and whether a cap on war spending would score as deficit reduction.
A key discussion point for the supercommittee has been whether savings from the end of the wars in Iraq and Afghanistan should be counted toward a deficit-reduction figure.
Sen. Jon Kyl (R-Ariz.) asked why CBO doesn’t assume a reduction in Iraq war expenditures now, given President Obama’s decision to remove all troops by the end of the year.
— This story has been updated.