Current Magazine

Congressional ‘super Committee’ Fails to Reach Agreement on Budget Deficit Reduction

Posted on the 21 November 2011 by Periscope @periscopepost
Congressional ‘super committee’ fails to reach agreement on budget deficit reduction

Capitol Hill, Washington, DC. Photo credit: Will Palmer

The 12-member bipartisan super committee tasked with coming up with $1.5 trillion in budget cuts by November 23 isn’t looking so super: According to CNN, the committee’s discussions on Sunday moved from where to trim to how to announce their failure to reach an agreement.

The super committee is a hangover from the last time the US Congress brought the country to the brink, during this summer’s debt ceiling debate. Republicans and Democrats duked it out not over the question of whether to raise the debt ceiling, the congressionally-imposed limit to government borrowing, but rather over how to curb government spending – Republicans wouldn’t agree to raise the ceiling unless budget cuts were made first.

Can we fix the super committee – and American politics? The Washington Post investigates.

The resulting last-minute deal saw $917 billion in spending cuts over the next 10 years, in exchange for a short-term debt ceiling raise of $900 billion that allowed America to meet its immediate debts without cutting off social benefits. It also called for a bipartisan committee to find a further $1.2 to $1.5 trillion in deficit reductions for Congress to approve by December 23, in exchange for another debt ceiling raise of roughly $900 billion. If they can’t agree, $1.2 trillion in spending cuts will automatically be triggered, taken from domestic spending and defence. No one liked this bargain, not the least the representative who called it a “sugar-coated Satan sandwich”.

And now, it looks like they can’t agree. While both sides have made some motions towards compromise – notably, several Republicans were warming to the idea of tax hikes – they can’t agree on the right mix of spending cuts, tax increases, and job creation.

This at a time when more people in America approve of polygamy than approve of the job Congress is doing, after its rating fell to an all-time low of 9 percent.

So what now?

What happens if they can’t agree? Failure to agree results in what’s called a sequester, automatic across-the-board spending cuts; these will be sliced equally from defence and non-defence spending, starting in 2013. Defence secretary Leon Pannetta, among others, has warned that indiscriminate cutting will cripple the American military, currently engaged in multiple fronts. (As CNN noted, however, because Congress made the law regarding the sequester, they can change, a motion that some lawmakers are pushing for.) In practically terms, no deal is expected to force markets down and could even result in another credit downgrade for America, similar to the one Standard & Poor’s served the country after the lengthy debt ceiling debate.

There was a deal, both sides agree, but they blame each other for its demise, The New York Times reported. And, as Mediaite noted, they used the Sunday talk shows to do it.

No last-ditch efforts. This committee may not have ended in quite the good faith it began, The Washington Post noted in its report on the committee’s failure. “Rather than making a final effort at compromise, members of the special deficit-reduction committee spent their final hours casting blame and pointing fingers, bracing for the reaction from financial markets that are already jittery over the European debt crisis,” Paul Kane reported. “Half of the 12 lawmakers turned to the Sunday political news shows as their outlet, speaking of their effort in the past tense and accusing the other side of intransigence that they blamed for the failure to clinch a deal. There were no last-minute negotiations, no behind-closed-doors huddles, just a near-empty Capitol in which senior aides could not agree on how to formally shutter the panel by Monday night.”

We have to got kick this spending habit. America’s federal debt has increased 41 percent, $4.4 trillion, since President Barack Obama’s inauguration, The Boston Globe’s Jeff Jacoby claimed; under him, America is burning through money it doesn’t have at a record-setting pace. “Washington’s refusal to take spending reduction seriously amounts to an almost criminal abdication of its responsibilities to the taxpayers, and politicians of both parties share in the guilt,” wrote Jacoby. Even sequestration, the automatic spending cuts, “will barely slow the spending train”. “Like any morbidly obese patient, the federal behemoth needs to go on a diet.”

“Nobody wants to give up hope. Reality, to some extent, starting to overtake hope. There were 12 good people who invested a lot in this and trying to find common ground to achieve the goal of this committee. … But the reality is, we need to come to an agreement,” Rep. Jeb Hensarling, a Texas Republican, told Fox’s Chris Wallace on Sunday. “So, it’s a daunting challenge, no doubt about it.”

America’s broken government. It’s a familiar refrain – one heard more often, it seems, since President Obama was elected – America’s political system is broken. David Magee, writing at the International Business Times, picked up the theme: “Deals are no longer brokered by opposing sides. Deals are butchered, pushing the American people to the brink with one senseless, endless threat after another,” he wrote. Neither side wants to budge, not even as oblivion stares them in the face.

Democrats couldn’t get real on tax reform. Former New Hampshire senator and Republican John Sununu took to the opinion pages of The Boston Globe to complain that there is a lot of blame to go around, but “the media’s knee-jerk reaction of blaming conservatives is off the mark”. “For all the talk of Republican intransigence on revenues, the supercommittee has failed because Democrats would not engage realistically on tax reform – the most sensible way of getting new revenue into the mix,” he wrote.

What about doing nothing? The “do-nothing” plan could offer $7.1 trillion in deficit reduction over the next 10 years, Ezra Klein at The Washington Post claimed, by letting existing temporary tax cuts expire. That’s one way to do it – and it would let Congress spend more time with their campaign contributors.

Super committee lies. Jeffrey Sachs, Columbia University professor, claimed at The Huffington Post that the super committee’s fault is that it won’t acknowlege that there are two American economies – the economy of the very rich, which is “booming”, and everyone else’s. “The big political lie of the Super Committee is that the deficit must be closed mainly by cutting government spending rather than by raising taxes on corporations and the super-rich. Both parties are complicit.”

More on the debt ceiling and other Congressional disasters

  • Debt ceiling debate changes American politics – and not in a good way
  • The debt deal only postpones a credit downgrade
  • Deal reached – did Obama surrender?
  • Will a compromise be reached in time?

Back to Featured Articles on Logo Paperblog