Wednesday, August 10, 2011

Picks for the debt-deficit Supercommittee announced--Deadlock likely

Republican and Democratic leaders have announced nine of the twelve members of the debt/deficit Super Committee listed below.   Given what we know about the Republican picks, it is almost certain that the committee will not be able to reach any agreement unless at least one of the Democratic members gives in and lets the Republicans have everything they want, particularly no tax increases.  As Ezra Klein notes (see the excerpt below), only one of the Republican picks (Rob Portman) could be considered as open to negotiating with the Democrats and he has ruled out tax increases or tax reform as part of a debt reduction deal.  

Bottom Line:  It looks like the supercommittee either will reach no agreement or the agreement will be a Republican plan approved on a 7 to 5 vote with one Democrat giving in to Republican plans just to get something done.  If any deal is reached, expect it to be reached late on the night of November 23rd, the supercommittee deadline.  That’s the day before Thanksgiving.  Not likely we will have any reason to say “Thanks.”

Announced members of the supercommittee

Republican Congressmen:

Rep. Jeb Hensarling, R-Texas, to serve as co-chair of the committee, House Republican Conference Chairman
Rep. Dave Camp (Mich.), House Ways and Means Committee Chairman
Rep. Fred Upton (Mich), House Energy and Commerce Committee Chairman

Republican Senators:

Jon Kyl (Ariz.)
Pat Toomey (Pa.)
Rob Portman (Ohio)

Democratic Senators:

Senator Max Baucus (Mont.)
Senator John Kerry (Mass)
Senator Patty Murray (Wash), to serve as co-chair

Ezra Klein says the picks are a recipe for supercommittee deadlock:

House Speaker John Boehner has chosen Reps. Dave Camp, Fred Upton and Jeb Hensarling, and Senate Minority leader Mitch McConnell has chosen Sens. Rob Portman, Jon Kyl and Pat Toomey. Of the six, Portman has expressed the openness to the Senate Gang of Six’s deficit plan, as The Hill points out. In late July, at the height of the debt-ceiling negotiations, he called the group’s work “a step in the right direction.”

But Portman never came out fully in support of the Gang of Six’s plan, and his commitment to the GOP hardline seems to have firmed up. Just yesterday, Portman told the Columbus Dispatch that any tax increases should be off the table. While he also affirmed his support for raising revenue through tax reform — eliminating loopholes and the like — Portman made it clear last month that he doesn’t think that tax reform should be part of a deficit deal. As his spokesman told ABC News last month, Portman “believes we have a spending problem, not a revenue problem, and that tax reform should be used not to increase revenue but to bring about a more efficient and competitive tax code by lowering rates while clearing out underbrush.”

In other words, even the GOP’s most moderate supercommittee member has ruled out tax increases or tax reform as part of a grand bargain. And without any concessions on revenue from Republicans, there’s not much chance that they will sign on to a plan that will also be acceptable to Democrats. As Senate Majority Harry Reid’s picks confirm, Democrats will be advocating a “balanced” approach to deficit reduction that pairs spending cuts with new revenue. Sens. Max Baucus, John Kerry and Patty Murray may willing to consider entitlement reforms, to varying degrees. But it seems clear that they won’t sign on to a cuts-only package with only nominal revenue increases. House Minority Leader Nancy Pelosi has yet to announce her choices for the committee, but they’re likely to tack further to the left than the Senate Dems and push back even harder against a deal without significant revenue increases.

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