The collapse of the supercommittee's effort to produce a joint package of recommendations for deficit reduction proves conclusively that, for Republicans and their corporate allies, deficit reduction is, and always has been, a secondary objective. The primary objective is to protect and expand the Bush tax cuts.
From reports now leaking out, it is apparent that Democrats on the supercommittee offered massive cuts to Medicare and Medicaid, amounting to a minimum of $500 billion over the coming decade. Those cuts were in addition to the automatic $1.2 trillion automatic additional deficit cuts negotiated as part of last August's debt ceiling deal. That deal already authorized $1 trillion in spending-only cuts. So, the Democrats' offer was the $1.2 trillion automatic deficit cuts - all spending, and about equally divided between defense and nondefense cuts - plus another $500 billion in Medicare-Medicaid, matched by another roughly equal $500 billion in tax revenue increases.
The Republicans on the supercommittee offered a different "mix" of tax revenue and spending cuts. Their counter was $760 billion in Medicare-Medicaid cuts, plus approximately $300 billion in tax revenue recovery. However, that tax revenue recovery was largely raised from increasing taxes on the middle class, by reducing the mortgage interest deduction and other middle-class tax breaks. In addition, the Republicans required a further major tax break for the top personal income tax bracket and for the corporate income tax. Both currently are set at a 35 percent tax rate. Republicans proposed to reduce both to between 25 and 28 percent. In other words, raise taxes on the middle class and give the money to the rich and their corporations. And make seniors, retirees and the poor pay $760 billion in Medicare-Medicaid benefit cuts.
What these maneuvers by both parties shows is the following: