Deficit 'supercommittee' struggles as clock ticks

WASHINGTON (AP) — The supercommittee is struggling.

After weeks of secret meetings, the 12-member deficit-cutting panel established under last summer's budget and debt deal appears no closer to a breakthrough than when talks began last month.

AP Photo/J. Scott Applewhite, File

Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, talks on his cell phone outside a closed-door meeting of the Joint Select Committee on Deficit Reduction on Capitol Hill on Sept. 27. After weeks of secret meetings the supercommittee seems no closer to reaching its assigned goal of at least $1.2 trillion in deficit savings over the next 10 years than it was when talks began. Lawmakers, aides and lobbyists closelyfollowing the group are increasingly skeptical, even pessimistic.

While the panel members themselves aren't doing much talking, other lawmakers, aides and lobbyists closely tracking the committee are increasingly skeptical, even pessimistic, that the panel will be able to meet its assigned goal of at least $1.2 trillion in deficit savings over the next 10 years.

The reason? A familiar deadlock over taxes and cuts to major programs like Medicare and the Medicaid health care program for the poor and disabled.

Democrats won't go for an agreement that doesn't include lots of new tax revenue; Republicans are just as ardently anti-tax. The impasse over revenues means that Democrats won't agree to cost curbs on popular entitlement programs like Medicare.

"Fairness has to be a prerequisite for it," said House Minority Leader Nancy Pelosi, D-Calif. "We have just come through passing a bill that was (all spending) cuts, no revenue." Pelosi was referring to the August debt limit bill, which set tight "caps" on agency budgets but didn't contain revenue increases pressed by Democrats.

Democrats are more insistent on revenues now.

"There's been no movement on revenues and I'm not sure the Democrats will agree to anything without revenues," added a Democratic lobbyist who required anonymity to speak candidly.

Asked last week whether she is confident that the panel can hit its $1.2 trillion goal, co-chairman Sen. Patty Murray, D-Wash., sidestepped the question.

"I am confident that the public is watching us very closely to see if we can show this country that this democracy can work," Murray told reporters. "I carry that weight on my shoulders every day and so does every member of this committee."

The two parties have equal strength on the panel, which has until Thanksgiving to come up with a plan to submit for up-or-down House and Senate votes in December. That means bipartisan compromise is a prerequisite for a successful result.

Thus far, say aides to panel members and other lawmakers, neither side has demonstrated the required flexibility in the super-secret talks.

The $1.2 trillion target evolved after efforts by President Barack Obama and House Speaker John Boehner, R-Ohio, to strike a so-called grand bargain on taxes and spending fell apart in July.

Those discussions and earlier talks led by Vice President Joe Biden identified numerous options for cutting the deficit. They included requiring federal workers to contribute more to their retirement, cutting farm subsidies, auctioning broadcast spectrum and curbing payments to Medicare providers like skilled nursing facilities, rural hospitals and home health care services.

The supercommittee could scoop up these relatively easy-to-generate savings but still fall short of the $1.2 trillion target. Interest groups like the powerful farm lobby might be willing to accept cuts when everybody else is getting hit, too, but are likely to fight back if they're among the relative few getting singled out for sacrifice.

"Once you start taking things off the table or you pick a deal that only hits some parts of the budget, then you have some people who get hit who say, 'Well, why me? Why not other people?'" said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

To be sure, the supercommittee still has time. And panel members, while divided, earnestly want a result. A more optimistic scenario is that in coming days and weeks, members of the panel will become more flexible as the deadline nears — and as pressure builds from financial markets and credit rating agencies like Standard & Poor's, which in August downgraded U.S. debt from its AAA rating.

At the same time, failure to produce a measure would trigger painful across-the-board cuts to the Pentagon budget and a big slice of domestic programs. Programs like Social Security, food stamps and the Medicaid health care program for the poor and disabled would be exempt from the automatic cuts, but farm subsidies could bear cuts and even politically popular Medicare could too, though any cuts would be limited to 2 percent of the Medicare budget. The idea behind this so-called sequester was to force the two sides to come together because the alternative is too painful.

"I made it clear to the Republican members of the supercommittee that I expect there will be an outcome, that there has to be an outcome," House Speaker John Boehner, R-Ohio, said at a Washington forum on Thursday. "The sequester that was built behind this is ugly, and it was meant to be ugly so that no one would go there. I don't underestimate how hard it's going to be to come to an agreement by the so-called supercommittee, but we have to get to one."

The across-the-board sequester, however, wouldn't take effect until the beginning of 2013, which is already fueling speculation that Congress would simply revisit the issue after the elections next year.