–Hill Dems Reject GOP Offer Of $640B Plan With Mostly Spend Cuts
–Rep. Van Hollen Says Talks Haven’t Shifted To Smaller Deal
–But Some Say Hill Leaders Resigned To Smaller Deal Than $1.2T

By John Shaw

WASHINGTON (MNI) – As Congress’s deficit reduction panel continues
to negotiate and braces for a weekend of talks, possible compromises
continue to rise — and then fall.

Congressional staffers say that Republicans floated an idea for a
much smaller deficit reduction package of about $640 billion, but this
package was almost exclusively comprised of spending cuts.

Democrats said the proposal was a non-starter.

There is growing speculation that congressional leaders would be
willing to accept a deficit reduction package of less than $1.2 trillion
to ease the across-the board-cuts that would be triggered.

But Rep. Chris Van Hollen, a Democratic member of Congress’s
deficit reduction panel, told reporters Friday afternoon that the panel
is still trying to reach its statutory goal of $1.2 trillion in savings
over a decade.

Van Hollen said the package must “do something for jobs and the
economy” and also offer a “balanced approach” to deficit reduction.

“It has to meet the test that any American would look at and
conclude it’s a fair deal,” Van Hollen said.

Earlier Friday, Rep. Jeb Hensarling, the Republican co-chairman of
Congress’s deficit reduction panel, said the committee is still working
to find “common ground” on a package that addresses “our nation’s jobs
crisis and the debt crisis.”

Hensarling said he’s “painfully aware” the panel’s deadline is
rapidly approaching and said the panel would “meet through the weekend”
for an agreement.

The Joint Select Committee on Deficit Reduction is charged to
submit a report to Congress by Wednesday that reduces the deficit by
between $1.2 trillion and $1.5 trillion for the 2012 and 2021 period.

The final package, if one is agreed to by the majority of the
panel’s 12 members, must be voted on without amendment by the House and
Senate by Dec. 23, 2011.

If the panel fails to agree on a spending cut package or Congress
rejects its plan, a budget enforcement trigger would secure $1.2
trillion in budget savings through across-the-board cuts.

The cuts would be equally divided between defense and non-defense
programs but would exempt Social Security, Medicaid and low-income
programs.

** Market News International Washington Bureau: (202) 371-2121 **

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