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Democrats, Republicans far apart on deficit deal

By Andrew Taylor

Associated Press

Published: Wednesday, Nov. 16 2011 12:01 p.m. MST

From left, Senate Budget Committee Chairman Kent Conrad, R-N.D., Sen. Roger Wicker, R-Miss., Rep. Heath Shuler, D-N.C, and House Minority Whip Steny Hoyer of Md., participate in a news conference on Capitol Hill in Washington, Wednesday, Nov. 16, 2011.

Carolyn Kaster, Associated Press

WASHINGTON — A Democrat on a special deficit-cutting "supercommittee" Wednesday questioned whether Republicans are still interested in negotiating after the panel's top GOP member said Republicans have "gone as far as we feel we can go" on tax hikes.

A sense of deep pessimism has gripped the supercommittee, and judging from the limited public statement by panel members, a debt bargain could be out of reach.

"We need to find out whether our Republican colleagues want to continue to negotiate or whether they've drawn a hard line in the sand," said supercommittee Democrat Chris Van Hollen of Maryland. "The question is whether they've kind of said 'take it or leave it.' "

Van Hollen made his comments after co-chairman Jeb Hensarling, R-Texas, told CNBC Tuesday evening that the bipartisan debt supercommittee is "somewhat stymied for the moment" because panel Democrats are insisting on tax increases of up to $1 trillion in exchange for cost curbs on rapidly spiraling benefit programs such as Medicare and Social Security.

The top Democrat on the deficit supercommittee, Sen. Patty Murray of Washington, said Wednesday morning that it's a "critical day" for the panel but that Democrats "are not going to accept a plan that gives a tax break to the wealthiest and balance all of this incredible (deficit) challenge on the backs of middle class families.

While the supercommittee struggles, a bipartisan gaggle of lawmakers urged the panel to "go big" and far exceed the minimum $1.2 trillion deficit target set for the panel this summer when it was established by a hard-fought budget and debt limit pact between President Barack Obama and House Speaker John Boehner, R-Ohio. Failure would trigger across-the-board spending cuts that especially alarm defense hawks.

"This group can do it. And they need to know, if they are bold, if they are brave, if they go big, we will stand with them, and the American people will stand with them," said Senate Budget Committee Chairman Kent Conrad, D-N.D.

The deficit for the just-completed budget year was $1.3 trillion, requiring the government to borrow 36 cents for every dollar it spends.

Under current policies, the government could run deficits near the $1 trillion range through the end of the decade. Even a successful negotiation that produces $1.2 trillion in cuts will still leave a deficit crisis that requires painful choices by policymakers on taxes and benefits programs, budget experts agree.

Backbiting has intensified since an exchange of offers. The Democrats' most recent plan called for $2.3 trillion in deficit cuts, including a $1 trillion tax increase over the coming decade. Republicans countered with almost $300 billion in new tax revenues as part of a $1.5 trillion debt plan, an offer that even a top Democrat, Majority Whip Dick Durbin of Illinois, called a breakthrough.

"The Democrats won't put a plan on the table to solve the problem, and anything they do that even remotely addresses health care, even superficially, they're insisting on" a $1 trillion tax increase, Hensarling said. "It's not going to happen."

Democrats have signaled privately that they're willing to lower their demands on tax increases somewhat — perhaps to $800 billion over a decade — but there's no sign that Republicans could accept that bargain.

Boehner publicly blessed the GOP offer on taxes Tuesday, bucking opposition by some GOP presidential hopefuls and colleagues wary of violating a longstanding point of party orthodoxy. But there's restiveness on his conservative flank

The supercommittee has until a week from Wednesday to vote on any compromise, but several officials said that in reality, perhaps as little as 48 or 72 hours are available to the six Republicans and six Democrats.

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