More Debits & Credits Posts

Deficit Supercommittee Throws in the Towel

November 21, 2011

As widely expected, the congressional “supercommittee” charged with coming up with $1.2 trillion in deficit reduction measures said Monday that it was unable to reach an agreement in time for its November 23 deadline.

The 12-member committee of Democrats and Republicans from both chambers of Congress had all but stopped meeting in recent days. The two parties blamed one another on the Sunday talk shows for being unable to agree to a compromise on either tax increases or spending cuts.

On Monday, the two co-chairs of the Joint Select Committee on Deficit Reduction, Rep. Jeb Hensarling, R-Texas, and Sen. Patty Murray, D-Wash., released the following statement:

“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. 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,” they added. “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.”

The supercommittee came together as a result of the debt ceiling showdown over the summer in which the federal government came close to a shutdown. The White House and Congress agreed to set up the supercommittee as a way to produce at least $1.2 trillion in deficit reduction measures over 10 years on top of the amount agreed to in the debt ceiling deal. The recommendations of the supercommittee were supposed to go to Congress for an up or down vote with no amendments allowed. If they were unable to come to a deal by November 23, as has now happened, automatic spending cuts will now be triggered starting in 2013, equally divided between defense and discretionary spending programs.

However, efforts are already underway in Congress to forestall some of those cuts, which are estimated to affect about 10 percent of the Defense Department’s budget in 2013. Senators John McCain, R-Ariz., and Lindsey Graham, R-S.C., said Sunday they would introduce legislation to soften the blow on the defense budget.

Meanwhile, Congress is expected to continue its efforts at tax reform. Republicans on the committee had proposed lowering the top tax rate from 35 to 28 percent in exchange for eliminating or limiting many popular deductions such as for mortgage interest and charitable contributions. Democrats countered that the tax burden would fall more heavily on the middle class as a result of the changes and balked at demands for steep cuts in entitlement programs in exchange for relatively modest concessions on tax revenues.

Comments (4)
Congress needs to be reformed. Too many legislators are influenced by special interests, with catastrophic results like the present Great Recession (see, repeal of the Glass-Steagall Act). Something similar has been around the internet--we need a Constitutional Amendment:
*Congressional Reform Amendment of 2012*
1. A member of Congress collects a salary while in office and receives no pension or other government retirement benefits for Congressional work when they are out of office.
2. Congress members (past, present & future) participate in Social Security. All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security system, and Congress members participate with the American people.
3. Congress members can purchase their own retirement plan, just as all Americans do.
4. Congress members will no longer vote themselves a pay raise. Congressional pay will rise or fall by the lower of CPI or 3%.
5. Congress members lose their current health care system and participate in the same health care system as the American people.
6. Congress members must equally abide by all laws they impose on the American people.
7. Term limits of two 4-year terms for senators and four 2-year terms for representatives. Serving in Congress is an honor, not a career. They should have to return home and work like all other Americans.
Posted by davesprecace | Tuesday, November 22 2011 at 12:21PM ET
So all the hype when this "supercommittee" was created was for nothing just as I thought. None of the cuts take effect until 2013 so noone really cares and there is no sense of urgency.

Congress has one more year to "fix" our country with duct tape instead of calling in the professionals. In that year most of them will be campaigning again with empty promises and good intentions, but you know....The road to hell...

Something catastrophic is going to have to happen before people pull their heads out and realize robbing from some to pay for a few isn't going to work.

Of course, if you were handed money, free healthcare, housing, on and on; would you really care where it all came from or that some other guy had to sacrifice what he earned for you to get it. Probably not.....
Posted by jsmithdta | Tuesday, November 22 2011 at 11:45AM ET
gary d has the right orientation, but he falls into the trap of recently inflated spending. Cuts from where we are now still result in massive annual spending, much of it deficit.

What we need to do is set a baseline year, say 2006 (a pre-Democrat congress spending year). Adjust actual spending by increasing for actual inflation, segregating out non-recurring items, separately budgeting Iraq and Afghanistan wars. Then budget by making a 10% or 15% cut in spending from inflation adjusted 2006 actual recurring. When we pull out of Iraq and Afghanistan, stop spending that money, don't allocate it to social welfare transfers as is the current plan. This is not ideal since we spent a lot of money in 2006 in ways that were not Constitutional, but it is a good start to address a non-budget process that entails congress spending whatever it wants with no upper limit.
Posted by kevin o | Tuesday, November 22 2011 at 10:40AM ET
Is anyone surprised by this? What a bunch of clowns we have representing us. Who can't come up with budget cuts? Only those who are spending other peoples money.

How about a 10% spending cut in every department of the federal government? Maybe even 15%. We're having to do it in business and at home. Why can't our elected representatives?
Posted by liberty first | Tuesday, November 22 2011 at 9:48AM ET
Add Your Comments:
Not Registered?
You must be registered to post a comment. Click here to register.
Already registered? Log in here
Please note you must now log in with your email address and password.