New deficit deal proves elusive as deadline nears

By Andrew Taylor

Associated Press

Published: Friday, Nov. 18 2011 1:10 p.m. MST

Sen. Rob Portman, R-Ohio, arrives for a meeting with bi-partisan members of the supercommittee on Capitol Hill in Washington, Friday, Nov. 18, 2011.

J. Scott Applewhite, Associated Press

WASHINGTON — The lead Republican on a special deficit-reduction panel indicated Friday that no deal is near but lawmakers will work through the weekend in pursuit of one.

"We are painfully, painfully aware of the deadline that is staring us in the face," said Rep. Jeb Hensarling, R-Texas.

Senate Majority Leader Harry Reid, D-Nev., said he would stand ready over the weekend but signaled that Democrats and Republicans remain far apart.

"I'm going to be available to talk, if they're willing to put forward something reasonable," Reid said. "If they're not willing to put forward anything reasonable, there's no point in talking."

The deficit reduction "supercommittee" has until Monday to provide public notice of any agreement, and needs to vote by Wednesday. The panel of six Republicans and six Democrats is charged with producing a plan to reduce future deficits by at least $1.2 trillion over the next decade. If it fails, automatic spending cuts that lawmakers want to avoid kick in.

It has been a few weeks since the entire committee met, but smaller groups meet routinely in parts of the Capitol in search of an elusive deal, including a session Friday afternoon.

Among those attending were Sens. John Kerry, D-Mass., Max Baucus, D-Mont., Rob Portman, R-Ohio, and Rep. Chris Van Hollen, D-Md.

The special deficit panel was established under this summer's budget and debt pact between President Barack Obama and House Speaker John Boehner, R-Ohio. It was given unusual powers in hopes of producing at least $1.2 trillion in deficit cuts over the coming decade.

Familiar battles over tax increases and cuts to benefit programs continue to hang up the panel, with neither side optimistic about a deal.

"They've never really put paper on the table," Boehner said of Democrats. "It's very frustrating."

Sen. Patty Murray, D-Wash., a committee co-chair, countered.

"I believe that we have opened a door to negotiations in these last final hours that if they (Republicans) can come to an agreement on their side on revenue ... we'll be able to move forward," she told reporters.

Barring a compromise to reduce deficits by at least $1.2 trillion over a decade, automatic spending cuts of that amount are to begin taking effect in 2013. Lawmakers in both parties, especially defense hawks, say they want to avoid that.

Sen. Pat Toomey, a Pennsylvania Republican and panel member, said Friday that "we're interacting in a variety of ways to see if we can get something we can pull together. ... I think it's still possible. It's not going to be easy." Washington's lobbying community buzzed Thursday with rumors of a new Democratic offer that would appear to meet the panel's $1.2 trillion target after borrowing costs. But top officials denied that the offer, featuring $350 billion in tax increases over the coming decade and smaller cuts to benefits programs than earlier Democratic plans, had been proposed officially.

Meanwhile, Boehner warned that he won't permit the savings from winding down the wars in Iraq and Afghanistan to pay for spending that President Barack Obama is seeking in hopes of creating jobs.

Democrats on the deficit panel proposed last week using war savings to pay for a $300 billion jobs program along the lines Obama wants, and to take steps to protect the upper middle class from the alternative minimum tax and extend financing for doctors who treat Medicare patients.

"I've made it pretty clear that those savings that are coming to us as a result of the wind down of the war in Iraq and the war in Afghanistan should be banked, should not be used to offset other spending," Boehner said.

But the Ohio Republican did not address whether war savings could be used to extend expiring tax cuts such as popular business tax breaks or Obama's expensive proposal to renew payroll tax cuts that expire at the end of December.

Neither side appears to want to be the first to walk away from the bargaining table, particularly given the high hopes that committee members and top congressional leaders have expressed about the panel's prospects.

Toomey made his remarks in an interview Friday morning on CNN.

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