The Republican leader in the House of Representatives, John Boehner, said that he was confident that the bipartisan congressional committee charged with identifying more than a trillion dollars in spending reductions will reach a consensus before the deadline this month. “I’m going to do everything I can to ensure that the supercommittee is successful,” he told ABC’s This Week on Sunday.
The supercommittee, that was created as part of a debt agreement reached in August, has less than a month left to agree to at least $1.2 trillion in cuts to federal spending projections for the next decade. If it doesn’t, defense and domestic programs could each be subject to hundreds of billions in automatic cuts, a prospect that’s terrified military officials who must already cope with huge budget reductions.
Entitlement and tax reform remain the two most complicated and divisive issues for lawmakers grappling with the nation’s ballooning debt. Democrats are resistant to reining in public pensions and health support for seniors and the poor while Republicans oppose tax increases.
The nation’s largest entitlement programs, Medicare and Social Security, are projected to deplete their trust funds in 2024 and 2036 respectively. Republicans have proposed to privatize Medicare for future seniors while several of the party’s presidential contenders are in favor of introducing private retirement savings accounts for citizens who do not want to depend on a government pension. Both plans have been criticized by members of President Barack Obama’s party however who do want seniors to be able to count on the “bedrock” promises of these decade-old programs.
According to Speaker Boehner, “We’ve made promises to ourselves that our kids and grandkids cannot afford.” If Democrats are willing to reform entitlements, he suggested, Republicans could agree to measures that will boost revenue. But increasing tax rates is still unacceptable to him.
“We don’t want to stagnate this economy by raising taxes,” the conservative leader in the Senate, Mitch McConnell, told NBC’s Meet the Press in September. Boehner reiterated the Republican position on Sunday when he told ABC that Washington DC doesn’t have a revenue problem, “we have a spending problem.”
Boehner previously endorsed eliminating tax exemptions for oil companies although he conditioned such a change on a reduction of the nominal corporate tax rate which is among the highest in the industrialized world. “I believe that if we restructure our tax code where on the corporate side and on the personal side, the target would be a top rate of 25 percent, it would make our economy more competitive with the rest of the world, it would put Americans back to work.”
Texas governor Rick Perry, who is in the race for the Republican Party’s presidential nomination, proposed to introduce a 20 percent corporate and personal income flat tax two weeks ago. Former Utah governor Jon Huntsman, another presidential hopeful, said to favor a 25 percent corporate tax.
If the supercommittee unveils a comprehensive deficit reduction plan this month, Congress shouldn’t put fiscal consolidation on hold until after next year’s election. It has to reduce the projected ten year deficit by as much as $4 trillion to stabilize the debt and put it on a downward slope as a percent of gross domestic product. As long as there’s divided government though, with Republicans controlling the House and Democrats the Senate and presidency, it will require compromise to achieve further budget cuts and as John Boehner put it this weekend, “This is hard.”