Congress, Deficit Reduction | featured news

Liberals' loud objections to White House proposals for slowing the growth of huge social programs make it clear that neither political party puts a high priority on reducing the deficit, despite much talk to the contrary....

The House is taking its first step Wednesday to avoid a government shutdown, as Washington looks to forgo forcing a fiscal crisis this month and instead turns its attention to a more deliberate debate over long-term deficit reduction.

Backing down from their hard-line stance, House Republicans said Friday that they would agree to lift the federal government’s statutory borrowing limit for three months, with a requirement that both chambers of Congress pass a budget in that time to clear the way for negotiations on long-term deficit reduction.

Economists Betsey Stevenson and Justin Wolfers write that “the debate in Washington about economic policy is phony. It’s manufactured. And it’s entirely political.” ... Turns out that there’s wide agreement that the stimulus created jobs, TARP was necessary, market factors drive gas prices, tax cuts reduce revenue, tax increases and spending cuts will have to be part of a deficit solution and more.

Republicans are ready to ram through the House an election-year, $3.5 trillion budget that showcases their deficit-cutting plan for revamping Medicare and slicing everything from food stamps to transportation while rejecting President Barack Obama's call to raise taxes on the rich....

It's just about over for a special deficit-reduction supercommittee, which appears set to admit failure today in its quest to sop up at least $1.2 trillion in government red ink over the coming decade. The bipartisan 12-member panel is sputtering to a close after two months of talks in which key members and top congressional leaders never got close to bridging a fundamental divide over how much to raise taxes. The budget deficit forced the government to borrow 36 cents of every dollar it spent last year.

With the clocks ticking down to deadline, it is becoming increasingly apparent on Capitol Hill that the supercommittee will not be able to reach its goal of cutting $1.2 trillion from the national debt.

Members of the congressional deficit-reduction committee are cooling to the idea of completing a comprehensive overhaul of the tax code by their November deadline, making it more likely the details of any major tax changes will be handled later by House and Senate tax committees, according to congressional aides from both parties.

A key Republican leader assured Sunday that a congressional supercommittee will reach agreement on $1.5 trillion in cuts in government spending by next month's deadline and avert deep automatic measures.

A last-minute deal reached by Democratic and Republican leaders in the Senate diminished the chances of a government shutdown by week's end.