As default nears, ‘super committee’ considers delaying tax talk until next year

By Richard Cowan and Donna Smith, Reuters

WASHINGTON — U.S. lawmakers might opt to postpone tough tax decisions until next year as they struggle to forge a deficit-reduction deal over the coming week, congressional aides said on Monday. With time running short, the “super committee” of six Democrats and six Republicans could agree to some spending cuts and instruct their fellow lawmakers to raise more tax revenue by retooling the byzantine tax code next year, aides said. That could allow the panel to reach a deal by its Nov. 23 deadline and temporarily resolve a budget battle that has dominated Washington for most of this year. But it would push the tax question well into the 2012 election season, when partisan tensions will be running even higher than usual. The idea has been talked about for months as a possibility and is being looked at more closely as little progress is evident as the deadline approaches.

Representative Eric Cantor, the No. 2 Republican in the House, expressed optimism that a deal could be reached but declined to comment on the possible details. “I believe they will reach agreement by the deadline,” Cantor told reporters. A senior House Republican aide told reporters that Republicans were waiting for Democrats to come forth with new ideas and Democratic super committee member Chris Van Hollen said, “conversations continue.” Republican Representative Jeb Hensarling on Sunday talked about a possible “two-step approach” on a television news show. A senior Democratic aide said on Monday: “It is being discussed. That is clear.” Another option under discussion is a deal that would lead to more tax revenue now, the aide said. Specifics of that option were not available but Democrats have been pushing to end some special interest tax breaks, such as one for the oil and gas industry and for corporate jets. Instructing the two tax-writing committees in Congress to overhaul the tax code in a way that could limit or end some tax breaks could allow the super committee to avoid deadlock and heap even further scorn on Congress at a time when it already faces record low approval ratings. But the panel would probably still have to tell the House of Representatives Ways and Means Committee and the Senate Finance Committee how much new revenue to raise over 10 years and how to structure those revenues.