Jeremy Hobson: Republican leaders in Congress are rejecting a $3 trillion deficit reduction plan from Democrats — and it all comes down to taxes.
Marketplace’s Nancy Marshall-Genzer joins us now, live from Washington with more on this. Good morning, Nancy.
Nancy Marshall-Genzer: Hey, Jeremy.
Hobson: So I have to say — not a terribly surprising development given the recent history in Washington. Is there anything different this time?
Marshall-Genzer: Well, Jeremy, they’re getting a little bit more into the nitty-gritty, a little more into the details here. Republicans say they really don’t like the fact that the the Democrats call for more than a trillion dollars in tax increases over ten years. House Speaker John Boehner says that’s not a “reasonable number”.
The Democrats’ plan is an almost even split of spending cuts and tax increases. But Boehner says the Democrats don’t cut entitlement programs enough — programs like Medicare and Medicaid. Boehner said most of the budget cuts should come from benefit programs, and he says defense spending should not be cut more.
Hobson: And of course, this is all about this super committee and trying to avoid a round of automatic cuts — I guess they have a deal that has to be made in just a matter of weeks. What do Boehner’s comments here do to the chances of a deal in the super committee?
Marshall-Genzer: Yeah, we are getting down to the wire. But Boehner is hardly giving up on the super committee. He’s emphasizing that he’s “committed to getting to an outcome” that will eventually pass in Congress.
Republicans have a counter offer and their plan would cut about $2 trillion from the deficit; it would result in about $40 billion in tax increases because of a change in the way tax brackets are calculated.
The super committee only has until Nov. 23rd to come up with a plan to cut at least $1.2 trillion from the deficit over the next ten years. Jeremy, I have to tell you though, that after all this to-ing and fro-ing between the parties — the two sides — the credit rating agencies say, for the U.S. to avoid another downgrade, the super committee would have to cut about $4 four trillion.
Hobson: Marketplace’s Nancy Marshall-Genzer in Washington, thanks Nancy.
Marshall-Genzer: You’re welcome.