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Deficit Super Committee Stuck in Stalemate as Deadline Nears

November 14, 2011 at 12:00 AM EST
After more than three months of work, the congressional panel charged with finding ways to cut the nation's budget deficit seems to be stuck in neutral. Judy Woodruff discusses the deadlock with super committee member Rep. Chris Van Hollen, D-Md.
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JUDY WOODRUFF: After more than three months of work, and with a deadline nearing, the congressional panel charged with finding ways to cut the nation’s budget deficit seems stuck in neutral.

Ten days to go, and there are still no signs of major progress on the deficit reduction super committee. But House Majority Leader Eric Cantor said today he’s confident there will be agreement. And President Obama is now appealing to both sides to show greater flexibility. He spoke Sunday in Hawaii, where he’s attending the Asia-Pacific Summit.

PRESIDENT BARACK OBAMA: My hope is that over the next several days, the congressional leadership on the super committee go ahead and bite the bullet and do what needs to be done, because the math won’t change.

JUDY WOODRUFF: On Friday, the president also telephoned the group’s Democratic and Republican co-chairmen.

The super committee was set up after the summer’s contentious debt-ceiling debate, with an equal number of members from both parties in the House and Senate. They were given a deadline of Nov. 23. By that time, they are supposed to agree on slashing at least $1.2 trillion from deficits over the next 10 years.

If they fail, it triggers automatic cuts in defense and domestic spending beginning in 2013. So far, the super committee remains divided down party lines on how to agree on a mix of tax increases and cuts to spending and benefit programs.

On Sunday, the super committee’s Republican co-chair, Jeb Hensarling, talked of compromise on raising revenue, without deciding exactly how.

REP. JEB HENSARLING, R-Texas: There could be a two-step process that would hopefully give us pro-growth tax reform, which, by the way, every other bipartisan effort that has said that we — that some revenues have to be raised are being raised in this method.

JUDY WOODRUFF: On the other hand, Democratic Congressman James Clyburn of South Carolina acknowledged that members of his own party can’t agree among themselves.

REP. JAMES CLYBURN, D-S.C.: There are six Democrats on this committee. And though I have a great deal of admiration and respect for all of them, the fact of the matter is Democrats have not coalesced around a plan.

JUDY WOODRUFF: One thing both sides can agree on, there’s still much work to be done.

Republican Sen. Pat Toomey of Pennsylvania:

SEN. PAT TOOMEY, R-Pa.: It’s at a difficult point. I think we have got a ways to go, but I hope we can close that gap very quickly.

JUDY WOODRUFF: And from the public’s perspective, it can’t happen quickly enough. A new Politico/George Washington University poll finds 69 percent of those questioned think the super committee will fail in its mission to cut the deficit.

Democratic Rep. Chris Van Hollen of Maryland is a member of the Joint Select Committee on Deficit Reduction, or super committee. He is also the ranking Democrat on the House Budget Committee. I spoke with him just a short time ago.

Congressman Van Hollen, thank you for talking with us.

REP. CHRIS VAN HOLLEN, D-Md.: It’s great to be with you, Judy.

JUDY WOODRUFF: So this new poll out showing that more than two-thirds of the American people believe the super committee is going to fail to reach an agreement, are they likely to be proven right?

REP. CHRIS VAN HOLLEN: Well, we’re hoping to prove them wrong.

I understand the sentiment of the American people. They have been watching a Congress that doesn’t appear to have been functioning the way it’s supposed to. We’re trying to overcome a lot of those hurdles. We know that we have only got 10 days left and the clock is ticking. And we’re working hard to try and get an agreement.

JUDY WOODRUFF: How close are you?

REP. CHRIS VAN HOLLEN: Well, we’re still not close, but we continue to have talks. And we continue to explore every way to try and bridge some of these differences.

Look, at the end of the day, an agreement is going to require a compromise. It’s going to be a process of give-and-take. It’s going to have to be an agreement where nobody is entirely happy with the result, but everybody is happier with the result than with the alternative. And we recognize that. And we’re trying.

JUDY WOODRUFF: Are both sides compromising at this point?

REP. CHRIS VAN HOLLEN: Well, as you probably know from public reports, the Democrats put a very ambitious plan on the table that included some very significant cuts and reforms, as well as revenue.

It met the test of balance as set out by other bipartisan groups, like Simpson-Bowles and Rivlin-Domenici. I have to say that we have not seen that kind of plan from the other side that is both balanced and also helps on the jobs front and the economy.

JUDY WOODRUFF: But we know from reports — or at least it is reported the Republicans have moved off their anti-tax position enough to propose $300 billion in new taxes as part of a $500 billion package. Why isn’t that acceptable to the Democrats?

REP. CHRIS VAN HOLLEN: Well, Judy, I think everybody needs to understand that, if the deficit committee, the joint committee never existed, that at the end of next year the folks at the very top of the income scale would go back to paying the rates they were in the Clinton administration. And that would mean $800 billion in revenue coming in.

What some of our Republicans want to do is say, we’re not going to allow that $800 billion to come in and in fact we will lock in tax breaks of $550 billion for the folks at the top. And, by the way, the price you have to pay for that is to bring down the top rate to 28 percent, which will mean that middle-class taxpayers face a greater tax burden than the folks at the top. And that’s just not fair.

JUDY WOODRUFF: So you’re saying that’s a nonstarter?

REP. CHRIS VAN HOLLEN: Well, I’m saying that’s not fair.

And I should point out that every other bipartisan group has assumed that this $800 billion from the termination of the Bush tax cuts on the folks at the top as part of their starting point, as part of their baseline. So that 250 doesn’t even get you into the starting gate in comparison to what the other bipartisan groups have done.

So, look, discussions continue. We’re all trying to find a way to make this work. And we’re not giving up.

JUDY WOODRUFF: There is a report that you are looking at a so-called escape hatch, a two-step process where the committee would agree to a revenue level, but you would leave it up to the standing committees of Congress next year that work on tax-writing to do the harder work of coming up with the actual tax-and-spending changes.

Is that under consideration?

REP. CHRIS VAN HOLLEN: There is some misinformation about that out there, Judy.

You could do a two-step process, but to make it meaningful, there have to be consequences if the committees do not hit a target that is set. For example if it’s a revenue target and through that normal process the committees don’t reach it, you should have an enforcement mechanism to make sure you get the revenue.

The same thing should be true on the cut side, if you’re going to go through that process. So, to make it meaningful from a — meaningful from a deficit-reduction perspective, you need to have real consequences, just like there are consequences if this joint committee fails. If we fail, then you’re going to have that automatic sequestration. So if you set up another process, there need to be specific, measurable consequences if the committees don’t hit their targets.

JUDY WOODRUFF: And there’s also reporting that there are efforts to get around the so-called sequester, wherein you would undo the penalty of these automatic cuts if you don’t reach an agreement. Is that — is there truth to that report?

REP. CHRIS VAN HOLLEN: Well, there are certainly people who say they want to get rid of the sequester.

If you want to get rid of the sequester, you’re not serious about deficit reduction, because if you get rid of the sequester, the deficit of the United States will automatically jump by $1.2 trillion, according to the accounting here.

So undoing it and talk of undoing it simply means you’re trying to escape the choices. For example, one of the choices people face is, do you want to close tax loopholes in order to make sure the defense sequester doesn’t take place? Let’s make that decision now. Don’t try and undo the sequester and the enforcement mechanism.

JUDY WOODRUFF: How worried are members of the super committee, Congressman Van Hollen, about the reaction in the financial markets if you don’t reach an agreement?

REP. CHRIS VAN HOLLEN: I think people are legitimately concerned about that. We’re concerned about the reaction of the American people, saying, look, there’s Congress, can’t get something done.

We’re worried about the reaction in the markets at a time when you have a very fragile economy. And we’re worried about the impact of the sequester, which is across-the-board, arbitrary cuts. So all those things motivate members of the committee to try to reach an agreement. And I’m hoping that, in the next 10 days, we’re able to do that.

JUDY WOODRUFF: Do you want to lay odds on whether it will happen, and are you convinced that every member of the super committee is trying to come up with a plan that can be broadly — that can reach agreement, because you — what is it? Out of the 12, you only need seven. But, of course, somebody would have to break ranks with their party for that to happen.

REP. CHRIS VAN HOLLEN: Well, in terms of the odds, it’s really been such a roller-coaster ride, that it’s hard to predict. At one moment, I’m hopeful, and the next moment, I’m frustrated. And then, sometimes, there’s light at the end of the tunnel again. So we’re just going to have to wait and see.

With respect to the 12 members, you know, the ultimate question for committee members is, are you ready to do something that is politically difficult? Because we will know we’re successful if, frankly, both sides are unhappy with an agreement, but, as I said earlier, recognize that it’s better than no agreement at all.

And, obviously, there are going to be some agreements for which no agreement will be better in some people’s eyes. And so that’s the balance we have to strike. And we’re hoping that we can get an agreement that meets the two tests that I think every American would like to see met. One, do something about the economy and jobs. Two, it should be balanced, meaning that there should be shared responsibility for getting the deficit under control, just like all the other bipartisan groups have done.

JUDY WOODRUFF: Rep. Chris Van Hollen, thank you very much.

REP. CHRIS VAN HOLLEN: Thank you.

JEFFREY BROWN: We have extended invitations to all of the Republican members of the super committee. None was available this evening. We hope to bring you an interview with one of them this week.