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Deficit talks shift toward blame game

By the CNN Wire Staff
updated 2:03 PM EST, Thu November 17, 2011
STORY HIGHLIGHTS
  • NEW: "It's time to rip the band-aid off," House Speaker Boehner says of cutting a deal
  • NEW: Republicans remain hung up over tax increases, says House Democratic leader Pelosi
  • NEW: 72 House Republicans oppose any tax hikes in a deficit agreement
  • The super committee has six days left to find at least $1.2 trillion in deficit reduction

Washington (CNN) -- Six days before the deadline for a deal, House leaders on Thursday blamed each other's party for the inability of a special congressional committee to reach agreement on tax and entitlement reforms as part of a possible deficit reduction agreement.

The comments at successive news conferences by House Speaker John Boehner, R-Ohio, and Democratic leader Rep. Nancy Pelosi of California escalated the rhetoric over possible failure by the committee created as part of the debt ceiling agreement earlier this year.

Boehner expressed frustration with Democrats, saying they have refused to sign off on any deal in various stages of deficit reduction talks going back to December.

"They're well aware of what we're willing to do, but you can lead a horse to water but you can't make him drink," Boehner said, adding: "The problem we've had all year is getting 'yes.' "

He called for decisive action now, saying "it's time to rip the band-aid off and do what needs to be done."

Pelosi said the talks appeared to be considering a smaller deal than the "big, bold and balanced" package that she would prefer. For now, she said, the "revenue piece seems to be the stumbling block for the Republicans."

Her comment was reinforced when 72 conservative House Republicans made public their opposition to any agreement that includes tax increases. Such a large voting bloc in the Republican majority means Boehner would need support from Democrats to get a deal that contains tax increases to pass the House.

Democrats led by President Barack Obama are seeking a comprehensive agreement that includes equal portions of new tax revenue, spending cuts and reforms to entitlement programs such as Social Security and Medicare.

Republicans have a narrower focus that emphasizes spending cuts and entitlement reforms to shrink the size of government. They have opposed any tax increases or talk of increased revenue until last week, when a Republican proposal by panel member Sen. Pat Toomey of Pennsylvania called for $400 billion in increased revenue, including tax increases.

Toomey's plan also included $800 billion in spending cuts and entitlement reforms for a total of $1.2 trillion in deficit reduction -- the minimum amount the panel must agree to under legislation that created it.

Democrats responded with a proposal using similar figures, but calling for all $400 billion in new revenue to be from increased tax collections. The Democratic plan also dropped entitlement reforms and a Republican call to make permanent Bush-era tax cuts set to expire at the end of 2012.

Boehner's spokesman called the Democratic counter-offer a "backward step," but Democratic Sen. Patty Murray, a co-chair of the joint congressional panel, said Thursday that further negotiations were possible.

"We have made it clear that we are willing to meet their offer, but it has to be in a way that it's fair to working families and puts our country back to work," Murray told reporters, adding it was up to Republicans to now modify their proposal to compromise with Democrats.

"I think the challenge is that they have to resolve the differences on their side on revenue and that's what we're waiting for," Murray said. "The productive conversation has to be on their side now to resolve the difference of where they are on whether or not to put real revenue on the table. Once they've resolved that and are willing to compromise that, we can reach a deal."

Toomey's plan called for lowering tax rates across-the-board as part of broader tax reform, but Democrats did not include that in their plan.

In return for accepting the GOP figures, Democrats said they would not accept Republican demands to raise the Medicare eligibility age to 67, lower cost-of-living increases for Social Security beneficiaries, and permanently reduce all income tax rates.

The Democratic package would include spending of about $700 billion on measures that Democrats believe are needed to jump-start the economy: an extension of the payroll tax cut and continued benefits for people who have been unemployed for an extended period.

It also would include money to permanently prevent cuts in payments to doctors who treat Medicare patients. Democrats want to offset those costs with the money saved from winding down the wars in Iraq and Afghanistan, a step that some legislators in both parties have criticized as an accounting gimmick.

Boehner said Thursday the savings from ending wars should be banked instead of being used to offset additional spending.

The special joint congressional committee has until November 23 to come up with a plan. At least seven of the panel's 12 members, evenly split between Democrats and Republicans in the House and Senate, need to agree on savings of at least $1.2 trillion over the next 10 years.

If they can do so, Congress will have one month -- until December 23 -- to vote on the deal, which cannot be amended.

A failure to pass any agreement would result in $1.2 trillion in automatic across-the-board spending cuts starting in 2013, evenly divided between defense and non-defense spending. Defense Secretary Leon Panetta warned Congress this week that such cuts could cripple the American military establishment.

While Democrats have expressed concern about deep cuts in social spending, programs such as Social Security, Medicaid, food stamps and veterans' benefits would be spared the budget ax.

Some conservatives in Congress are already calling for adjusting the impact of forced spending cuts if no deal is reached.

However, Obama has threatened to veto any attempt to soften the automatic cuts, and Boehner said Thursday that the trigger mechanism was intended to be painful in order to motivate Congress to cut a deal that prevents it.

"It's important for the committee to work," he said. "The sequester is ugly. It was designed to be ugly, because we didn't want anybody to go there."

Meanwhile, some legislators from both parties continue to call for the super committee to "go big" and find a solution that far exceeds the committee's minimum $1.2 trillion goal.

"We must work across the aisle in both houses (of Congress) to get this country on the right track," said Rep. Steny Hoyer of Maryland, the No. 2 Democrat in the House of Representatives. "We have the greatest chance that we've had in a generation to strike a bold agreement."

"The right thing to do is to go big," said Sen. Saxby Chambliss, R-Georgia. "Super committee, we've got your back."

Dick Durbin of Illinois, the Senate's No. 2 Democrat, argued that a more ambitious package that tackles politically sensitive issues such as tax hikes and entitlement reforms might ultimately be easier for the harshly polarized Congress to pass.

"If we stand together and lock arms together, we can achieve something as a group that no individual can achieve," Durbin said. "This is our chance to step up and make a difference."

CNN's Ted Barrett, Tom Cohen, Paul Courson, Lisa Desjardins, Xuan Thai, Kate Bolduan, Alan Silverleib and Deirdre Walsh contributed to this report.

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