FAIL: Super Committee Comes Up Empty

Brian Beutler  November 21, 2011

A whirl of last minute meetings and shuttle diplomacy weren’t enough to help the 12-member deficit Super Committee reach agreement on anything.  Late on Monday, co-chairs Jeb Hensarling and Patty Murray put the panel to bed in an official statement.
 

“Despite our inability to bridge the committee’s significant differences, we end this process united in our belief that the nation’s fiscal crisis must be addressed and that we cannot leave it for the next generation to solve.  We remain hopeful that Congress can build on this committee’s work and can find a way to tackle this issue in a way that works for the American people and our economy.


“We are deeply disappointed that we have been unable to come to a bipartisan deficit reduction agreement, but as we approach the uniquely American holiday of Thanksgiving, we want to express our appreciation to every member of this committee, each of whom came into the process committed to achieving a solution that has eluded many groups before us.  Most importantly, we want to thank the American people for sharing thoughts and ideas and for providing support and good will as we worked to accomplish this difficult task.


“We would also like to thank our committee staff, in particular Staff Director Mark Prater and Deputy Staff Director Sarah Kuehl, as well as each committee member’s staff for the tremendous work they contributed to this effort.  We would also like to express our sincere gratitude to Dr. Douglas Elmendorf and Mr. Thomas Barthold and their teams at the Congressional Budget Office and Joint Committee on Taxation, respectively, for the technical support they provided to the committee and its members.”

The Super Committee itself was part of the tarnished legacy of this summer’s debt limit fight — a GOP-initiated legislative debacle that harmed the country’s economy and further soured voters on their dysfunctional Congress.  Much of the bad will that fight created between Democrats and Republicans — and the stain it left on the institution as a whole — bled through to the negotiations that failed today.  For days before it became official, members of both parties were parceling out blame, both to each other, and to the various interest groups that helped stymie progress.  Republicans’ favorite culprit has been President Obama, whom they now fault for failing to involve himself in the process, after asking him to stay out of the process when the Super Committee was first put together.

But the actual root of the failure lies in the GOP’s strict unwillingness to increase taxes on wealthier Americans.  Over the course of the negotiations, Democrats have put forward multiple proposals that include fairly significant cuts to programs like Medicare — but conditioned on the idea that the GOP would agree to similar dollar figures in new tax revenue from top earners.  One GOP counter proposal reportedly did include modest new tax revenues — about $250 billion over 10 years — but those would have been taken largely from middle income Americans, while providing tax cuts to the rich.

Monday’s outcome doesn’t exacerbate the country’s debt forecast, which may explain the ratings agencies’ silence in the days leading up to the deadline.  But that will change if and when Congress takes steps to exacerbate deficits — something scores of members have already pledged to do.  The catch is that Democrats and Republicans will now have to fight through the regular, ugly order — through filibusters and amendments — to protect their interest and pursue their goals ahead of a number of hard budgetary and economic deadlines.

In about five weeks, a payroll tax holiday for workers, and extended benefits for long-term unemployed Americans are both set to expire.  So is a temporary patch to prevent Medicare physicians from taking a big automatic pay cut.  At the end of next year, all the Bush tax cuts are set to expire, and, simultaneously, the penalty for the Super Committee’s inaction — across the board cuts to security programs and Medicare providers — is set to kick in.  Members of Congress from both parties are deeply invested in preventing all of those things from happening.  But in almost all cases, they don’t agree with each other about how.

These fights will loom large in 2012, and will provide openings for any inclined members or group of members to pursue their own 10-year deficit reduction plans — to create room in the budget to prevent all of the consequences of inaction from happening.

But that will be an excruciatingly heavy lift.  There’s little appetite in the Republican-controlled House for any deficit plan that includes higher tax revenues.  And until that changes, Congress will gridlock every time it turns its attention to fiscal issues.  President Obama and Congressional Democratic leaders say they will resist any effort by the GOP to dismantle or alter the penalty between now and January 2013 — a strategy meant to pressure Republicans to come to terms with the unsustainable nature of their anti tax pledges.

That assures a brutal political fight over the possibility that the defense budget will be slashed — automatically and indiscriminately — while the country remains at war.  Simultaneously, Republicans are threatening to block all significant job-creation measures — including the payroll tax and unemployment extensions — unless they’re paid for with program cuts elsewhere in the budget.  With unemployment at 9 percent, these are high-priority initiatives for Democrats and President Obama and both will keep hounding Republicans for blocking economic growth measures — indeed, for allowing an automatic tax increase on workers — until something gives, or voters decide for themselves at the polls.