Nel's New Day

November 21, 2011

Budget Supercommittee: Failure or Success?

Filed under: Uncategorized — trp2011 @ 7:34 PM
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The Budget Supercommittee came into our lives late last summer with a bang and then left today with a whimper. “After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline,” Sen. Patty Murray (D-WA) and Rep. Jeb Hensarling (R-TX), the co-chairs of the supercommittee, said in a joint statement.

So what’s a “supercommittee”? In a Politico/George Washington University national poll, 50 percent said they were “not at all familiar” with the supercommittee while 38 percent said they were only “somewhat familiar” with it. Almost nine out of every ten Americans don’t have the vaguest notion of what the supercommittee is, much less what it’s tasked with doing.

In brief, the White House and Congress agreed last August, as a condition of raising the debt ceiling, that they would empower a Joint Select Committee on Deficit Reduction to craft a “grand bargain” to reduce the national debt by $1.2 trillion. Proposals from the committee would be placed on a fast track through the House and Senate, with no allowance for the legislation to be amended by lawmakers. If the panel’s plan were to be approved by Congress, the debt ceiling could be increased by the same amount. Without agreement by Thanksgiving, the government would make $1.2 trillion in automatic cuts to defense and domestic spending starting in 2013– 50 percent from defense spending and 50 percent from domestic spending, excluding Social Security, Medicaid, Medicare benefits, and low-income entitlement programs.

Committee Democrats were willing to cut Social Security and Medicare, but Republicans refused to increase tax revenue. They claimed that they would raise $250 billion in closing tax loopholes but failed to mention that at the same time they would also lower the tax rate on the wealthiest households from 36 percent to 28, once again a benefit for the wealthy. The Democrats final offer was $400 billion tax cuts out of the $1.2 trillion in savings required, one far to the right of the bipartisan Bowles-Simpson and Gang of  Six plans, which received the approval of conservative senators like Tom Coburn and Mike Crapo.

Why did the Republicans turn down this deal? They wanted to permanently set tax rates below the 2001 and 2003 tax cuts,  locking in the Bush tax cuts for high-income taxpayers (as well as other taxpayers) and taking them off the table for future deficit reduction.  Democrats wanted to set the Bush tax cuts to the side, neither extending nor ending them and leaving their disposition for another day.

Republicans blamed President Obama after House Speaker John Boehner and Senate Minority Leader each assigned three adamant no-revenue members to the committee. It was Congress’ decision to put only representatives and senators on the committee. “There wasn’t a seat at that table, as far as I’m aware, for a member of the administration,” White House spokesman Jay Carney said. In fact, Republicans told Obama to stay away from the discussions.

Even before the committee chairs announced failure, conservatives started announcing plans to circumvent the agreement made last summer. Sen. Jon Kyl (R-AZ) told David Gregory on Meet the Press that they could go around the defense tax cuts to create others. The problem with Kyl’s approach is that the President has to sign any budget laws that Congress might pass.

Without this agreement and no further action, there will be no extension of jobless benefits and the one-year payroll tax cut, causing, according to economists at J.P. Morgan Chase, a hit on economic growth next year of as much as two percentage points and a possible recession. Without Congressional action, physicians who take a 30-percent cut in government reimbursements for Medicare patients, and the alternative minimum tax, hitting more than 30 million families, will return.

Republicans say that they are speaking for the people. This is what “the people” are saying:

60% of Americans wanted the debt supercommittee to compromise, including majorities of Republicans, independents, and Democrats.

51% of Americans in general say it is better for political leaders inWashingtonto compromise to get things done, rather than stick to their beliefs. Only Tea Party supporters show a clear preference for sticking to beliefs.

Americans clearly favor spending cuts to tax increases when considering how to reduce the federal budget deficit. However, most favor a mix of the two approaches.

Tea Partiers oppose cuts to Medicare and Social Security by a 76-22 margin.

Sixty-eight  percent of millionaires favor raising their own taxes.

The Republicans’ refusal to compromise can have a positive affect on the budget. If Congress can’t agree on budget cuts, George W. Bush’s tax cuts will expire on January 1, 2013, other tax cuts will go away, and $1.2 trillion in additional budget cuts will go into effect, providing $7.1 trillion in only one decade. Bush’s tax cuts almost doubled the national debt during his two terms; dropping them can reverse the increasing federal debt. The Republicans may have done the people in this nation a great favor last summer when they proposed the “supercommittee” and then set it up for failure.

Fortunately, Congress passed part of an omnibus bill, known as the first “minibus,” that provided $128 billion for the departments of Agriculture, Commerce, Justice, Transportation, and Housing and Urban Development while extending funding to the other agencies until Dec. 16. We’ll see if conservatives extort deals about funding the country after that date.


  1. You write: “In fact, Republicans told Obama to stay away from the discussions.” Several others had made similar statements about committee members requesting the president not participate: Clarence Page in his syndicated column on 28 Nov; Andrew Cuomo on a radio broadcast on 22 Nov; Susan Davis on Washington Week on 25 Nov. Where can we find some hard evidence in print or captured in a video or audio recording that one or more members of the Committee made such statements?


    Comment by Jerry Allan — December 1, 2011 @ 11:09 PM | Reply

    • Senator John Kerry said on “Meet the Press” that President Obama and White House budget officials “were asked to be hands off.” I don’t know of any video or audio recording from a Republican stating this. I also didn’t hear any of them refute this statement. Congressional leaders set up a committee last summer with no place for the president, indicating that they did not want his input. The conservative criticisms of Obama’s lack of involvement did not come until almost the deadline when the Democrats had not caved into their demands that there be no–or minimal–revenue as part of the agreement. If you find anything else, please let me know.


      Comment by trp2011 — December 4, 2011 @ 8:30 PM | Reply

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