December 8, 2023

Deficit Deal Fell Apart After Seeming Agreement

Called away from dinner tables, the Jets-Patriots game on television and, in one case, a soccer team party, several Democratic members of the special Congressional committee on deficit reduction raced to the office of Senator Patty Murray for a hasty 8:30 meeting to discuss the outlines of a potential agreement. Crucially, it appeared to have the backing of at least one Republican on the 12-member panel even though it included a tax increase.

As the members spoke, they began to see the outlines of a deal, tentatively agreeing on tax rates, revenues, spending cuts and changes to Social Security and Medicare, according to interviews with members of the committee and their aides.

Whether the committee could reach the finish line was very much in question, but at least it was in sight, for the first time in the nine weeks the group had been meeting.

It disappeared almost as quickly.

On Sunday, just one week after both sides had begun to feel hope, several members of the bipartisan panel conceded that their weeks of negotiations had failed. In the end the two sides could not agree on a mix of tax increases and spending cuts and — perhaps above all — on the fate of the tax cuts originally signed by President George W. Bush, which are now scheduled to expire at the end of 2012.

While the panel’s failure was in many ways foretold — President Obama and the House speaker, John A. Boehner, failed to reach a similar deal only this past summer — the deadlock offers fresh evidence for everyone frustrated with Congress, including its own members.

“It was a huge opportunity missed,” Representative Chris Van Hollen of Maryland, a Democratic member of the committee, said in an interview on Sunday. Representative Jeb Hensarling, Republican of Texas, who headed the committee with Mrs. Murray, of Washington, agreed. “As a nation,” he said, “I am not sure how long we have to put America on a sustainable path.”

Democrats and Republicans, as has been their wont throughout the process, could not even agree on what led the talks to slide into failure.

Democrats insist that they were closing in on the framework of an agreement, but that Republicans backed away from their willingness to accept significant revenue increases in exchange for cuts in the growth of entitlement programs. They said Mr. Boehner sealed the fate of the panel on Thursday by offering a package that had a mere $3 billion in new revenue, far less than an earlier Republican plan.

Republicans, who agreed that there was a potential framework a week ago, counter that the deal was spoiled by Democrats, who refused to lock in the level of entitlement savings or tax changes they would accept, and began to demand more revenues to match any substantive entitlement changes. Democrats also would not agree to a framework for tax reform, Republicans said.

“There were good talks on Sunday,” an aide to a Republican panel member said, referring to the Veterans Day weekend meeting. “We felt that by Monday Democrats collectively had moved the goal posts.”

Further, Republicans argue, Democrats were never really committed to a plan, as evidenced by Senator Charles E. Schumer of New York, who predicted two weeks ago that the panel would fail to reach an agreement.

The members of the committee began the process with equal parts skepticism and hope. Many lawmakers had tried and failed to reach bipartisan agreements on the same issues over the last few years. They hoped that this time, with the threat of large cuts looming in the event of their failure, would be different.

Members of the panel, the Joint Select Committee on Deficit Reduction, spent most of September and early October getting to know one another, and putting together staff. Meetings were largely friendly, with one member bringing beef jerky, another salads from a fancy take-out place near Capitol Hill. On Senator Murray’s birthday, there were frosted cupcakes.

Republicans met or spoke by phone twice a day from almost Day 1. Democrats were not as tightly organized.

Elisabeth Bumiller and Eric Lichtblau contributed reporting.

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