Gang of 12 will likely fail

Gang of 12 will fail. Authors of the Simpson-Bowles and Rivlin-Domenici budget reduction plans testified before the Gang of 12 this past Tuesday and offered a bleak outlook to the Gang of 12. Former White House Chief of Staff Erskine Bowles bluntly stated that he was concerned the panel would fail. Democrat and Republican members of the Gang of 12 focused their statements and questions on taxes and entitlements. Nothing new. Read more here and here.


America's credit rating doesn't hinge on Gang of 12. Moody indicated that the success or failure of the Gang of 12 will not be a “decisive” factor in determining whether America keeps its AAA credit rating. This news undermines Speaker Boehner's statement that America's credit rating is one of the key pressures forcing the super committee's hand toward a deal. “This outcome would increase the importance of the treatment of the expiring ‘Bush tax cuts’ at the end of 2012 in assessing the future path of deficits and debt, since other major policy measures would not likely be forthcoming,” Moody’s statement read. Read more here.

Online sales tax battle. Retailers are pressuring the super committee to include language based on the online sales tax bill Senate Majority Whip Dick Durbin introduced this summer. Retailers are reminding lawmakers they have allies, arguing that states could collect about $23 billion in new tax revenue in 2012, or more than a quarter of a trillion dollars in the next decade. Durbin is again putting forward a proposal to require online retailers to collect sales tax just like their storefront counterparts. Meanwhile, Sens. Ron Wyden (D-Ore.) and Kelly Ayotte (R-N.H.) are preparing to introduce a counter-proposal that seeks to protect small businesses from any new tax regime. The measure would affirm that no federal legislation should give states the authority to impose any new tax-collecting requirements on small Internet businesses and entrepreneurs, which they argue would be burdensome. Read more here.