Deficit ‘supercommittee’ paralyzed

WASHINGTON – 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.

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 said. “I carry that weight on my shoulders every day and so does every member of this committee.”

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.

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, including Medicare, food stamps and Medicaid. 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 Thursday. 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.