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GOP rejects Dems' super committee offer; talks 'deadlocked' over taxes

By Kate Bolduan, Deirdre Walsh and Ted Barrett, CNN
updated 5:06 PM EDT, Wed October 26, 2011
STORY HIGHLIGHTS
  • A Democratic debt-reduction proposal is rejected by "super committee" Republicans
  • The "outrageously absurd" proposal relied on tax increases, a top GOP aide says
  • The plan called for cuts to Medicare and Medicaid, Democratic sources say

Washington (CNN) -- Democrats on the debt-reduction super committee proposed a plan for slashing up to $3 trillion from the federal debt but Republicans swiftly and decisively rejected it because it relied heavily on tax increases, according to several congressional sources from both parties.

One top Republican aide described the Democratic offer, made in a closed meeting Tuesday, as "outrageously absurd" and a "non-starter," and a sign the super committee may ultimately fail. But this is the first time in the months since the committee began its negotiations that any group on the panel has offered a specific plan.

Democratic sources told CNN that at the meeting Tuesday the plan was presented to the 12-member committee by Sen. Max Baucus, D-Montana, the Finance Committee chairman. A majority of the six Democrats on the super committee supported the proposal but sources declined to say which member or members disagreed.

The plan would have made cuts to entitlement programs such as Medicare and Medicaid, which the Democratic sources described as a major concession from their party. In return Republicans were asked to go along with between $1.2 and $1.3 trillion in new tax revenue.

Congressional Republicans have been nearly uniform in their opposition to new taxes, particularly during the economic downturn, and Sen. Jon Kyl, R-Arizona, made that point during Baucus' presentation, the sources said.

The GOP aide accused Democrats of leaking details of their offer to the press and said it is a clear sign Democrats believe the super committee will fail.

"It's because they know, or they think, or they believe this committee is going to fail," said the GOP aide, who insisted on anonymity in order to discuss the highly sensitive negotiations. "So they need a marker saying this is where we are."

The GOP aide went on to say the development is a sign that the talks are "deadlocked" over the issue of whether tax increases should be part of a debt-reduction plan.

Democratic sources made the point that Tuesday's offer in the super committee was an attempt by Democratic members to reach for a "big deal" and go beyond the $1.2 trillion in reductions required by the August debt-ceiling agreement.

Multiple Democratic sources characterized the Democratic pitch as picking up where negotiations for a "grand bargain" between President Barack Obama and House Speaker John Boehner, R-Ohio, left off when talks fell apart in late July. During those negotiations the two leaders were discussing a deal that included more than $400 billion in Medicare and Medicaid cuts over 10 years and increased tax revenue of between $800 billion and $1.2 trillion.

The committee faces a fast-approaching deadline of November 23 to reach agreement and vote on a debt-reduction deal of $1.2 trillion or more to avoid across-the-board "trigger" cuts that would go into effect in 2013.

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