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Supercommittee Countdown

High stakes for older Americans as Nov. 23 deadline on deficit cuts nears

Taxes may be too complicated to address

In an era of political warfare, a rare front of agreement is on eliminating some tax breaks to raise more revenue and to make income taxes simpler.

But, Bixby points out, "some of the things that make the tax code more complicated, the public likes — like home mortgage interest deductions." The less popular tax breaks, like those for oil companies or corporate jets, don't cost nearly as much as mortgage deductions and other popular tax breaks.

One point of contention between the parties is how to use the additional revenue from any tax breaks that are eliminated. Democrats have pushed for lowering the deficit. Republicans have said they want to use the money to lower overall income tax rates. The top tax rate is now 35 percent but will go up to nearly 40 percent in 2013, when the Bush tax cuts are scheduled to expire. One recent GOP proposal would reduce the top rate to 28 percent.

Rewriting the entire tax code in the week before the panel's Nov. 23 deadline is seen as unlikely. The committee reportedly has considered directing that it be done but asking the regular congressional committees to work out the details later.

Darling sees that as mere wishful thinking. "If politicians failed over and over to cut this deal, why would we think it's going to happen in another year?"

Washington politicians have a long history of pulling together deals under deadline pressure, so the supercommittee could still produce $1.2 trillion in deficit savings to ward off across-the-board cuts, or a smaller package that would reduce the automatic cuts. If Congress makes the full $1.5 trillion in cuts, the debt ceiling will be raised as well, forestalling another fight on that.

If the committee fails to offer a package of deficit cuts, it will be a wasted opportunity, Bixby says. The law that established the committee gave its proposals special treatment in Congress. Any proposal would be guaranteed a vote in Congress by Dec. 23 and couldn't be amended or filibustered.

But that's only if the panel can produce a deal by the Nov. 23 deadline.

"They have superpowers. That doesn't mean they are going to do anything with them," Bixby says.

Tamara Lytle is a freelance writer in the Washington, D.C., area who has covered government and politics for more than 20 years.

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