The inability of the Joint Select Committee on Deficit Reduction, better known as the "super committee,” to come to an agreement on a plan to reduce the federal deficit by at least $1.2 trillion is just the latest turn of events after months of negotiations on deficit reduction.
A review of the major developments in this debate over the past year shows that taxes, especially on high-income households, have always been the major sticking point. While the two parties have been able to agree to various levels of spending reductions (including $1 trillion in spending cuts as part of the deal that created the super committee), negotiators have repeatedly come up against a wall when it comes to including higher taxes for rich people as part of deficit reduction.
The following timeline highlights key happenings in the deficit negotiations.
February 14, 2011: President Barack Obama submits budget for 2012 with about $2 trillion in deficit reduction, half of which come from spending cuts.
April 15, 2011: House passes Ryan budget, which includes $5.8 trillion in spending cuts along with tax cuts for the richest Americans.
May 5, 2011: Vice President Joe Biden begins debt talks.
May 11, 2011: Speaker John Boehner says he will not raise debt limit without spending cuts that match how much the limit is raised.
June 23, 2011: Majority Leader Eric Cantor walks away from debt ceiling talks with Biden after refusing to consider any tax increases. The administration had offered $2.4 trillion in spending cuts for $400 billion in taxes, an 83:17 split.
July 7, 2011: President Obama and Speaker Boehner begin debt-ceiling negotiations.
July 9, 2011: Speaker Boehner walks away from President Obama’s “grand bargain”: $4 trillion in debt reduction comprised of $1 trillion in revenue and $3 trillion in spending cuts, including entitlement reforms.
July 19, 2011: The Gang of Six proposes a $4 trillion deficit reduction plan, including $2 trillion revenue.
July 22, 2011: Again, Speaker Boehner walks away from negotiations after President Obama offers $1.2 trillion in revenues and $1.6 trillion in spending cuts, including entitlements.
July 31, 2011: Debt ceiling agreement is reached, cutting $1 trillion in spending immediately and establishing the super committee to reduce deficits by at least an additional $1.2 trillion.
October 26, 2011: Democrats first super committee offer is $3 trillion in deficit reduction comprised of about $1.3 trillion in revenues and $1.7 trillion in spending cuts, including cuts to Medicare and Medicaid. Republicans immediately reject it. Republicans’ first super committee offer is $2.2 trillion in deficit reduction that includes no new tax revenues.
November 8, 2011: Republicans’ second super committee offer is $1.5 trillion in deficit reduction. It does include $300 billion in new tax revenue, but in exchange for extending the Bush tax cuts and lowering the top tax rate. The plan would ultimately cut taxes for the wealthy and raise them for everyone else.
November 10, 2011: Democrats’ second offer is $2.3 trillion in deficit reduction, consisting of $1.3 trillion in spending cuts and $1 trillion in revenue. The revenue would be split between $350 billion in concrete measures and $650 billion in future tax reform. Republicans reject it.
November 11, 2011: Democrats agree to Republicans’ top lines including just $400 billion in revenues and $875 billion in spending cuts, but refuse to accept the GOP’s tax cut for the rich. Republicans reject it and make their final offer: $640 billion in spending cuts and $3 billion in revenues.
Sarah Ayres is a Research Associate in the Economic Policy Department and Michael Linden is the Director for Tax and Budget Policy at American Progress.
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Managing Director, Economic Policy