Democrats on the debt supercommittee proposed a "grand bargain" of spending cuts and new taxes to reduce deficits, picking up Wednesday where President Obama and House Speaker John Boehner broke off this summer as the panel has four weeks left to strike a deal.
A first look: The package, up to $3 trillion, was a first peek at what have been mostly closed-door deliberations. But it drew swift opposition from Republicans who objected to the inclusion of new taxes. "I don't think it was seen as a serious offer," a GOP aide said.
Entitlement cuts: The plan was not aired publicly, but sources indicated it would combine spending cuts to the Medicare and Medicaid programs with higher taxes on the wealthy. The $500 billion it would cut from Medicare and Medicaid picked up where the summer's negotiations left off. It proposes $400 billion in Medicare cuts equally divided between beneficiaries and providers, and up to $80 billion cuts to Medicaid.
New taxes: Revenues would be raised mostly by taxing the wealthy by bumping up the high-end tax bracket and limiting deductions for those upper-income earners, those familiar with the talks said. The Democrats' plan also included using interest savings to pay for elements of Obama's $447 billion jobs plan -- an idea Republicans have shot down.
The deadline: The panel has until Nov. 23 to reach agreement on a proposal to reduce the nation's deficits by at least $1.5 trillion over the next decade. Failure to cut at least $1.2 trillion would trigger mandatory cuts in 2013 that many are skeptical would ever take place. "We're not there yet, but I'm confident we are making progress," said Sen. Patty Murray, D-Wash., the co-chair.
What's at stake: Leading credit agencies have indicated they want to see a serious effort to rein in the nation's debt load or the country risks having its credit rating further downgraded, which would likely increase interest rates for ordinary Americans.
The back story: Democrats proposed the plan as a gesture of compromise. They have been willing to put cuts to Medicare and other entitlement programs that are dear to their constituents on the table, but only if Republicans will agree to some new taxes. Republicans have pushed instead for an overhaul of the corporate tax code that would lower tax rates in a way they believe would spur economic growth.
TRIBUNE WASHINGTON BUREAU