The high stakes game on Capitol Hill to cut $1.2 trillion from the federal deficit ended in a stalemate Monday, effectively suspending tough decisions on budget cuts or tax increases until after next year’s presidential election.
The Joint Select Committee on Deficit Reduction chaired by Sen. Patty Murray (D.–Wash.) and Rep. Jeb Hensarling (R.–Texas) made the announcement in a joint statement with two days remaining before the deadline to present a plan to Congress.
“After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline,” the co-chairs said.
The bicameral panel was formed as part of the agreement to raise the debt ceiling in August. But after four hearings on the history of debt, spending and tax reform options, plus numerous meetings held behind closed doors, the committee admitted defeat and went home for the Thanksgiving holiday.
“We are deeply disappointed that we have been unable to come to a bipartisan deficit reduction agreement, but as we approach the uniquely American holiday of Thanksgiving, we want to express our appreciation to every member of this committee, each of whom came into the process committed to achieving a solution that has eluded many groups before us,” the co-chairs said.
The committee’s failure to propose a deficit plan triggers automatic cuts in defense, domestic spending and Medicare beginning in 2013, but dragging the anchor gives both sides time to defend, and pass new legislation to bypass those cuts.
Before the committee formally announced its failure less than an hour after the U.S. markets closed, Republicans signaled they would block efforts to reduce Pentagon spending, targeted to receive cuts over the next ten years by more than $400 billion. Democrats say they too will have to decide whether or not they can live with the cuts which call for an 8% cuts for domestic programs and 2% of Medicare.
President Barack Obama, who returned to the White House earlier in the day from a nine-day trip to Hawaii and Bali, said he would veto any effort to bypass the automatic spending cuts.
“There will be no easy off-ramps on this one,” Obama said.
Democrats and Republicans blamed each other for the failure of the panel to make any recommendation.
In statements issued to the press, Republicans blamed Democrats for not agreeing to any spending cuts to reduce the deficit.
“In the end, an agreement proved impossible not because Republicans were unwilling to compromise, but because Democrats would not accept any proposal that did not expand the size and scope of government or punish job creators,” said Senate Minority Leader Mitch McConnell (R.–Ky.).
Democrat leaders Tweeted to their followers that Republican lawmakers were at fault for balking at tax increases, but also blamed the Tea Party and Grover Norquist, the president of Americans for Tax Reform and the leading Beltway opponent of new taxes.
“I’m disappointed that Rs never found the courage to ignore Tea Party extremists & millionaire lobbyists like Grover Norquist,” Tweeted Senate Majority Leader Harry Reid (D. –Nev.). “Moving fwd, I hope the fear of the Tea Party & millionaire lobbyists like Grover Norquist will not prevent Rs from forging compromises w/Ds.”
Added House Minority Leader Nancy Pelosi in a Tweet: “GOP rejected a balanced plan & chose to keep their pledge to Norquist to protect wealthiest 1% at all costs.”
House Speaker John Boehner said he too was disappointed at the outcome, but praised Democrat and Republican committee members and said “I am confident the work done by this committee will play a role in the solution we must eventually find as a nation.”
Some Republicans were critical of all lawmakers on Capitol Hill, and Rep. Tim Scott (R.–S.C.) said the committee and its goals were destined to fail.
“While I am disappointed in today’s announcement, the failure of the Super Committee comes as no surprise. I voted against this arrangement from the beginning, as it was unrealistic to believe a group a 12 members could solve our problems when 535 could not,” Scott said.
Sen. Bob Corker (R.-Tenn.) called the end result “nothing short of an embarrassment” and “an absolute national disgrace and failure of leadership” that the committee could not “agree on a paltry $1.2 trillion in deficit reduction.”
Rep. Allen West (R.-Fla.) called the abrupt conclusion a “sad indictment” on all members of Congress” and citing the failure in the House last week to pass a balanced budget amendment, said “we as a collective body are pathetic.”
Rep. Chip Cravaack (R.–Minn.) summed it up as “yet another outrageous failure by Washington to set aside partisan bickering for the well being of our great nation.”
However, Sen. Rob Portman (R.–Ohio), one of the committee members, said Republicans worked in good faith to find common ground and offered up new revenues through tax code reforms but Democrats wanted more than a trillion dollars in tax increases and more stimulus spending.
“We failed to reach agreement because, despite good intentions on both sides, we simply couldn’t bridge fundamental policy differences that reflect a broader disagreement in the Congress and country as a whole over the size and scope of government,” Portman said.
Sen. Pat Toomey (R.–Pa.) said the committee wasted an “extraordinary opportunity” to pay down on the deficit by reforming the tax system, specifically, his proposal.
“I am saddened and disappointed that we were unable to meet our goal when so many Americans were counting on us,” Toomey said. “Like the proposals offered by other bipartisan commissions, our proposal offered a mix of spending cuts, revenue, and job-creating tax reform that would have lowered tax rates for all Americans and reduced our deficit by $1.2 trillion. Unfortunately, our Democratic colleagues refused to agree to any meaningful deficit reduction without $1 trillion in job-crushing tax increases.”
Rep. Fred Upton (R.–Mich.), who also served on the committee, said the panel “faced steep odds” and that he was “bitterly disappointed” they could not reach an agreement, but that “America’s fiscal challenges did not appear overnight, and finding solutions will take time and require tough choices.”