Super Committee Republicans Disagree on Taxes

Party's conservative wing urges deficit-reduction panel to rule out any deal that includes tax hikes.

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WASHINGTON (Reuters) — Republicans faced a divisive internal debate over taxes on Thursday as lawmakers from the party's conservative wing urged a deficit-reduction committee to rule out any deal that includes tax increases.

The message in a letter from 72 rank-and-file Republican lawmakers further squeezes Republicans on the 12-member "super committee," who are struggling to reach a deal with Democrats that would produce at least $1.2 trillion in budget savings over 10 years.

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Republicans on the panel have floated a plan that would raise about $300 billion in taxes over 10 years, in a softening of the firm anti-tax stance they have taken in other budget battles this year.

Democrats say they will not back a plan that consists of spending cuts alone, and their latest proposal would raise the government's 10-year tax haul by about $400 billion.

The panel faces a November 23 deadline.

Taxes are not the only issue. Republicans want to overhaul health and retirement benefit programs, while Democrats want to roll in measures to boost the struggling economy in the short term.

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Democrats say they cannot go any further until they know where Republicans stand on taxes.

"I believe we have opened the door to negotiations in these last final hours," Senator Patty Murray said after meeting with fellow Democratic super committee members. "But if they can come to an agreement on their side on revenue, then we will be able to move forward. And my hope is that that will happen today."

Automatic spending cuts, falling equally on domestic and military programs, would kick in if the panel cannot reach a deal. Talks are expected to run through the weekend and right up to the last possible minute.

DUELING PLANS?

Congressional aides familiar with the negotiations said there is the possibility that Democrats and Republicans could end up offering competing plans at the deadline. It is unclear whether either plan would be able to win the support of a majority of the panel, which has six Republicans and six Democrats.

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Failure to reach a deal could further anger voters who have been rattled by earlier budget fights this year that brought the government to the edge of a shutdown and the brink of default, prompting a first-ever sovereign debt downgrade.

Congress's approval rating stands at near-record low levels, and lawmakers are eager to prove that they are capable of governing as they head into the 2012 election season.

At the same time, any deal is likely to challenge orthodoxies on the left and the right. Democrats have campaigned for decades on a promise to protect health and pension benefits, while nearly every Republican in Congress has signed a pledge to oppose tax increases.

"Increasing taxes on Americans would destroy jobs, erase all hope of an economic recovery, and simply serve to feed out-of-control spending in Washington," the group of 72 Republicans said in a letter to the super committee.

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Many of those who signed the letter have voted against earlier budget deals this year, even though they cut spending and did not raise taxes. House of Representatives Speaker John Boehner will likely face further defections from his right flank if the super committee produces a plan for congressional approval.

At his weekly news conference, Boehner ignored a question about tax increases but made clear he is not giving up.

"I'm going to continue to work because the problem is not going to go away," Boehner said. "If it were easy, it would have been done a long time ago."

Other Republicans have recognized that any deal must include tax increases in order to win the backing of the Democratic-controlled Senate and President Barack Obama.

Some 42 Republicans in the House and 23 in the Senate have signed a letter urging the super committee to shoot for an ambitious deal that would save $4 trillion, which almost certainly would contain a combination of spending cuts and increased tax revenues.