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U.S. deficit-reduction talks intensify
WASHINGTON (Reuters) - Hard bargaining by a special U.S. deficit-reduction panel is entering a more intensive stage, sources in Congress said Thursday, as a top budget official said analysis of some savings ideas was underway.
The success or failure of the "super committee" will not only have an impact on the future fiscal health of the United States but its decisions could also loom large in presidential and congressional elections in November 2012.
"After prolonged and very high-level debates, they are now turning to more serious and substantive negotiations that could lead to a possible solution," said a senior Republican aide with knowledge of the committee's work.
Another source familiar with the discussions, who also asked not to be identified, told Reuters that panel members were moving forward.
"They are not at a standstill," the source said.
In recent days there have been reports that the super committee so far had made no progress toward identifying at least $1.2 trillion in government savings over a decade.
The super committee -- an outgrowth of an August budget deal that also raised U.S. borrowing authority -- has until November 23 to craft a deal, with the full Congress facing a December 23 for final action. If there is a failure on either end, automatic spending cuts of $1.2 trillion would start in 2013.
In a rare peek into the secretive work of the panel, Congressional Budget Office Director Douglas Elmendorf said during a speech to the Council of Foreign Relations in New York: "What we are doing right now very, very intensively is giving super committee members and staff estimates of the budgetary effects of different proposals that they are considering."
ROLE IN COMMITTEE'S WORK
The CBO will play an important role in the super committee's work. As the nonpartisan budget analyst for Congress, it will assess the impact any eventual deal would have on government budget deficits that have exceeded $1 trillion in each of the past three years.
Elmendorf said CBO already has done "a tremendous amount" of analysis of possible deficit-reduction measures being weighed. He added that while the super committee is "clearly engaged very seriously" on a long-term budget plan, "whether agreement will be reached on a large or small amount of deficit-reduction, I just don't know."
Individual members of the super committee could ask CBO to analyze specific deficit-reduction ideas. That would not necessarily mean that there was consensus within the 12-member panel on any particular issue.
With the November 23 deadline coming more into focus, several congressional aides told Reuters that they thought party leaders in Congress will now become more engaged in the super committee's work.
"Leadership has got to provide a little guidance" for the negotiations, the senior Republican aide said.
Panel members have been keeping their party leaders abreast of the discussions and no super committee deal is expected to go forward without the blessings of congressional leaders, like Senate Majority Leader Harry Reid and John Boehner, Speaker of the House of Representatives.
TAXES LOOM LARGE
Sources have told Reuters that super committee members were discussing controversial issues such as revenue increases, which most Republicans have strongly resisted. So far, panel members have given no sign they have come to tentative agreements on any steps.
There is widespread speculation that the panel could include a reduction in the corporate tax rate, which is now at 35 percent, as part of a deal that also could close some special-interest tax breaks.
Representative Jeb Hensarling, the Republican co-chairman of the super committee, told Fox Business News that he hoped "we might be able to take up at least business entity tax reform."
With no decisions made on raising revenues or cutting expensive federal healthcare programs, the panel has not yet decided, according to aides, whether to shoot for the required $1.2 trillion in savings or go for a much larger deal that financial markets want.
The super committee has been meeting in secret for more than a month on whether to focus on spending cuts, tax increases or both in their drive to get budget deficits down.
A House Democratic aide, who asked not to be identified, said that "everything's on the table" in negotiations and they "have to be talking about revenues. They can't be going after seniors (health and retirement benefits) and let millionaires off" from paying higher taxes.
(Additional reporting by Donna Smith; editing by Philip Barbara)
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