There's a relatively simple, and absolutely fundamental, agreement that the Super Congress has to come to, and so far they're failing. They reportedly
"can't agree on how to count."
With only weeks left before the bipartisan panel hits the congressionally mandated deadline for reporting its recommendations, lawmakers have yet to resolve the thorny question of what kind of baseline to use to score a deal, according to sources familiar with the talks.
The question is critical, because without agreement on the benchmark, it will be virtually impossible to agree on a package that could be moved to the Senate and House for final approval. The baseline will be the measure that the supercommittee will use to judge whether it has reached its mandate of at least $1.2 trillion in savings, set by the deficit deal this summer. If the panel deadlocks, deep spending cuts to defense and non-defense programs would be triggered.
It's a pretty basic question, albeit thorny. Republicans want to use current law as the benchmark, which would "preclude [the committee] from changing income tax rates because doing so would score as a huge loss of revenue unless it went so far as to wipe out all of the tax cuts enacted under then-President George W. Bush in 2001 and 2003." And by all means, Republicans do not want the tax cuts ended.
Democrats want the supercommittee to use current policy as a budget baseline, or what is known as a plausible baseline. A plausible baseline was adopted by the fiscal commission headed by former Sen. Alan Simpson (R-Wyo.) and former White House Chief of Staff Erskine Bowles (D).
A current policy baseline assumes the Bush-era tax rates for middle- and high-income earners will continue. Repealing those tax breaks for families earning over $250,000 annually while maintaining them for earners below that threshold would score as a huge influx of revenue — in the ballpark of $800 billion to $900 billion. That could take the supercommittee a long way toward cutting the deficit by $1.2 trillion.[...]
It's a double-edged sword for Democrats. If they agree to adopt a plausible baseline but Republicans show no appetite for raising major sums of revenue through tax reform, the panel might have to find additional spending cuts.
This seems like kind of an arcane debate, and something relatively trivial for the committee to be hung up on, but it's not. How much deficit reduction the committee achieves depends entirely on the starting point for the counting. The fundamental issue for the committee is revenues versus spending and where they set the level for each. But where they set the level for each is hugely dependent on the baseline they're measuring from.
It's looking more and more like we're headed for those automatic triggers. That the committee hasn't been able to nail this one down in the weeks that it has been functioning suggests that they'll have a hard time coming up with a complete plan by Thanksgiving.