Taxes Remain Tough

The lead story in The New York Times, “On Deficit Panel a Push to Defer Details on Taxes,” describes an attempt by the members of the Congressional deficit reduction panel to avoid automatic cuts if they are unable to agree on reducing the deficit by $1.2 trillion by the deadline of November 23. If they should fail to come up with an accord, according to law, the automatic cuts previously agreed upon will target the military and entitlement programs.

These two areas were included specifically to spur the committee to agree; the draconian automatic penalties will hurt the two areas most sacrosanct to both Parties.

Now, in the face of almost inevitable discord, the committee is looking for the minimum ways necessary to reach agreement. President Obama has said he will veto any attempts to use any shortcuts and exempt military spending as the Republicans now want to do.

In fact, the actual deadline for action by the panel is not November 23rd but November 21st, as the Congressional Budget Office must score the impact of the final proposal. This puts the 12 members, six Democrats and six Republicans, under even more pressure.

What will happen? Probably, the panel will do the minimum amount necessary to avoid the automatic cuts and leave much of the writing of the legislation to the House Ways and Means Committee and the Senate Finance Committee. That’s the Congressional way.