WASHINGTON, Aug 8, 2011 (AFP) - President Barack Obama and his Republican foes clashed Monday on whether a new congressional "supercommittee" could even look at raising taxes as it works to rein in runaway deficits by $1.2 trillion.
|AFP - US President Barack Obama enters his limousine following a fundraiser at a private residence in Washington on August 8, 2011|
The confrontation stoked concerns that the panel, created in the hard-fought debt-limit deal Obama signed into law last week, is doomed to deadlock even before leaders of the polarized House and Senate name its 12 members.
Obama acknowledged "some skepticism" that the "the so-called 'supercommittee'" will forge a compromise but hoped that America's historic loss of its top-notch credit rating "will give us a renewed sense of urgency."
"I assure you, we will stay on it until we get the job done," Obama said at the White House with global markets tumbling in a sell-off triggered by Standard & Poor's downgrade of the US credit rating from AAA to AA+.
Republican and Democratic leaders of the House of Representatives and the Senate have until August 16 to name the committee's members, but were expected to act as early as this week.
Their choices will decide whether the new panel deadlocks with potentially dire results or meets a late-November deadline for issuing recommendations that would then get streamlined consideration in both chambers by late December.
"It's not a lack of plans or policies that is the problem here. It's a lack of political will in Washington. It's the insistence on drawing lines in the sand, a refusal to put what's best for the country ahead of self-interest or party of ideology. And that's what we need to change," he said.
Obama highlighted some $917 billion in cuts to domestic and military spending and urged tax reforms "that will ask those who can afford it to pay their fair share" as well as "modest" cuts to the social safety net.
If the panel deadlocks, or Congress fails to approve its recommendations, the debt-limit deal calls for painful automatic cuts of $1.2 trillion to the military and health care for the elderly, designed to be so politically costly to both sides as to compel a compromise.
But Obama's appeals for tax revenue increases were met with unified Republican opposition -- as they did in the recently completed debt limit talks, in which the president ultimately folded, angering many of his Democratic allies.
"Raising taxes is simply the wrong approach," said Republican House Speaker John Boehner, who has argued that doing so will smother investment necessary to create jobs at a time when US unemployment is stubbornly high at 9.1 percent.
Republican House Majority Leader Eric Cantor went further, saying his party must "demand" that the new committee reject tax increases.
"There will be pressure to compromise on tax increases. We will be told that there is no other way forward. I respectfully disagree," Cantor said in a memorandum to fellow House Republicans.
"The country needs economic growth and fiscal responsibility, not higher taxes and new Washington spending and regulations," said Republican Senate Minority Leader Mitch McConnell.
McConnell, who has repeatedly said that Republicans' top goal must be to oust Obama in the November 2012 elections, said the committee "can and should" focus on cuts to social safety net programs dear to Democrats.
"Serious people on the joint committee will have the opportunity to do even more to get Washington's fiscal house back in order after the past few years of massive borrowing and spending," he said.
But Democratic Senate Majority Leader Harry Reid warned last week that Republican intransigence on the issue would doom any chance at a compromise.
"We will have no legislation that will come out of that joint committee unless revenues are part of the mix. It's a fact of life," Reid told National Public Radio.
Outside experts also called for finding a way to raise tax revenues sharply depleted by the 2008 global economic collapse and by trillion-dollar tax cuts under Obama's Republican predecessor, George W. Bush.
Former Senate Budget Committee Chairman Pete Domenici, a Republican, and former White House Budget Director Alice Rivlin, a Democrat, urged the panel to tackle "real drivers of our debt crisis -- revenues and entitlements."
Republican House Budget Committee Chairman Paul Ryan noted last week that the Bush tax cuts were due to expire in January 2013, but vowed to "make certain that these assumed tax hikes never happen."