* "Super committee" weighs 2012 tax reform as solution
* Many ideas floating, none gain traction yet
* Republicans push modified Medicare overhaul
By Richard Cowan and Thomas Ferraro
WASHINGTON, Nov 14 U.S. lawmakers might opt to
postpone tough tax decisions until next year as they struggle
to forge a deficit-reduction deal over the coming week,
congressional aides said on Monday.
With time running short, the "super committee" of six
Democrats and six Republicans could agree to some spending cuts
and instruct their fellow lawmakers to raise more tax revenue
by retooling the byzantine tax code next year, aides said.
That could allow the panel to reach a deal by its Nov. 23
deadline and temporarily resolve a budget battle that has
dominated Washington for most of this year. But it would push
the tax question well into the 2012 election season, when
partisan tensions will be running even higher than usual.
The idea has been talked about for months as a possibility
and is being looked at more closely as little progress is
evident as the deadline approaches.
Republican Representative Jeb Hensarling on Sunday talked
about a possible "two-step approach" on a Sunday talk show.
A senior Democratic aide said on Monday: "It is being
discussed. That is clear."
Another option under discussion is a deal that would lead
to more tax revenue now, the aide said.
Specifics of that option were not available but Democrats
have been pushing to end some special interest tax breaks, such
as one for the oil and gas industry and for corporate jets.
Instructing the two tax-writing committees in Congress to
overhaul the tax code in a way that could limit or end some tax
breaks could allow the super committee to avoid deadlock and
heap even further scorn on Congress at a time when it already
faces record low approval ratings.
But the panel would probably still have to tell the House
of Representatives Ways and Means Committee and the Senate
Finance Committee how much new revenue to raise over 10 years
and how to structure those revenues.
MANY IDEAS FLOATING AROUND
Democrats also might press to link possible spending cuts
to the Medicare and Medicaid healthcare programs to a
successful outcome on tax reform next year.
Republicans already rejected such a proposal last week.
"What will the guidelines be (that are) given to the
committee?" asked the senior Democratic aide.
Meanwhile, other ideas have been swirling around the super
committee, without any clear sign of traction, including some
"small deals," according to congressional aides.
Republicans are considering a structural reform to Medicare
that would limit the program's growth and allow recipients to
choose a private health plan instead if they wished, softening
an approach they advanced earlier in the year.
If the super committee fails to lock in at least $1.2
trillion in deficit reduction -- either through spending cuts
or tax increases -- over the next decade, across-the-board
reductions kick in starting in 2013. They would be split evenly
between domestic and military programs.
Representative Eric Cantor, the No. 2 Republican in the
House, said he didn't think that would happen.
"I believe they will reach agreement by the deadline,"
Cantor told reporters.
The blunt instrument of across-the-board spending cuts is
seen as a harsher outcome than a more targeted approach written
by the super committee. The across-the-board cuts also would
underscore the political gridlock in Congress at a time when
financial markets are yearning to see Washington work
cooperatively on fiscal issues.
With the House returning on Monday from a week-long break,
Cantor and other party leaders will begin sounding out their
rank-and-file about what approach might have the best chance of
passing the Republican-controlled chamber, where conservatives
have been on a year-long campaign to shrink the size of
In an attempt to encourage the super committee to strike a
deal in its waning days, a group of about 150 lawmakers from
the House and Senate are planning to gather on Tuesday to
"encourage, nudge, cajole" the panel, in the words of one aide,
to find much more than the $1.2 trillion in minimum savings the
super committee is tasked to find.
(Additional reporting by Donna Smith; Writing by Andy
Sullivan; Editing by Eric Beech)