Republican tax hardliners on U.S. debt super panel

Republicans named their six members on Wednesday to a U.S. congressional deficit-reduction super committee, including a favorite of the conservative Tea Party movement and other no-new-taxes hardliners.

In a move that could deadlock the 12-member panel over taxes, but perhaps set the stage for changes later, Senate Republican Leader Mitch McConnell named Tea Party ally Patrick Toomey to the panel with Jon Kyl and Rob Portman.

The panel is known as the Joint Select Committee on Deficit Reduction and was established to find $1.5 trillion in additional budget savings over 10 years, but markets have been looking for signs that it may be able to do more.

House of Representatives Speaker John Boehner, the top Republican in Congress, appointed Dave Camp, who chairs the tax-writing House Ways & Means Committee, along with conservative "young gun" Jeb Hensarling and Fred Upton.

The committee also will have six Democratic members.

Like a trio of Senate Democrats named to the panel on Tuesday, the six Republicans are a diverse group, but they were expected to toe the Republican anti-tax line.

The GOP appointments "will make sure that you don't get any tax increases," said FBR Capital Markets policy analyst Ed Mills, predicting that Portman -- who directed the U.S. Office of Management and Budget for a year in the Bush administration -- will be the star of the committee.

"The best news is that we have avoided appointment of any bomb-throwers. You have some serious people here," Mills said.

Hope for a fiscal policy breakthrough from the panel had risen as markets whipsawed through the week following a historic Standard & Poor's downgrade of the U.S. credit rating and a deal to raise the debt ceiling that only postponed tough decisions.

"All three of these nominees understand the gravity of our situation and all three will bring the kind of responsibility, creativity and thoughtfulness that the moment requires," McConnell said in a statement.

Senate Democrats were first out of the gate on Tuesday with appointments of Senators Max Baucus, John Kerry and Patty Murray, a trio that analysts said sent a mixed message about the panel's potential.

The three remaining slots are to be filled by House Democratic Leader Nancy Pelosi by Tuesday. Hensarling and Murray will co-chair the committee.

AN EYE ON ELECTIONS

"The selections to the super committee all have an eye toward politics and the 2012 election," Mills said in reference to presidential and congressional elections in November of next year.

Facing unprecedented deficit and debt challenges, Congress has failed in recent years to muster the will to reform the convoluted U.S. tax code or address long-term funding problems for the Medicare and Medicaid health care programs and the Social Security retirement pension program.

The tax code, riddled with hundreds of loopholes for corporations and individuals worth billions of dollars, has not been comprehensively overhauled since President Ronald Reagan did it in 1986.

While some Democrats dispute the urgency of reforming entitlement programs, such as Medicare and Social Security, it is widely acknowledged that a demographic tidal wave is fast closing in on the programs as baby boomers age.

The recent recession and prolonged economic weakness have reduced government tax revenues, worsening a budget deficit that expanded hugely under President George W. Bush and has grown further under President Barack Obama.

"Our debt and deficits are a threat to our economy, and America cannot achieve long-term job growth until we take action to address this crisis," Boehner said in a statement.

"This joint committee presents an opportunity for both parties to bring to the table their best ideas, debate them on the merits, and ultimately come together to do what's best for our country," he said.