OK, it’s Thanksgiving Eve. As is my tradition, I will make sure this pre-holiday post is not particularly long. As a holiday traditions go; family activities rock, reading blogs, not so much. While this is not a seasonal post, I do wish each of you Happy Thanksgiving. I hope you take time to make someone’s holiday brighter.
To place this topic in its proper context, it is important to note that on July 31st, President Obama and the Congress forged an agreement designed to avert propelling the nation into default for the first time in history. The good news was, while a faction of Congress, and the splinter groups which support them actually lobbied for forcing the country into default, the President and more reasonable minds in Congress managed to cobble together a tenuous pact that prevented default. The bad news is it did not forestall Standard & Poor’s imposing a downgrade of the U.S.
It does appear that recently, the blog has produced a series of déjà vu moments. Today is no exception. On August 3rd, in a post entitled, “The Debt Ceiling Induced Default Averted: What's Next,” I made the following observations about the debt deal in general, and the Super Committee in particular:
The agreement has two distinct stages:
- The initial phase includes $917 billion in savings and a $900 billion dollar increase in the debt ceiling, consistent with the GOP-T Party stipulation that there be at least as much savings as any increase in the debt limit
- In the second phase of the agreement, a special joint committee of Congress will devise and recommend to both Houses of Congress a package of reductions totaling $1.5 trillion or more, with Congress obligated to vote the package up or down by the end of the year, without the option to make amendments.
The special joint committee will be comprised of 12 members, 6 from each chamber, equally divided between Democrats and Republicans. The group is scheduled to tender its recommendations by November 23rd; Congress, in turn, must vote the provisions up-or-down by December 23rd.
In reaching the additional reductions, the panel is expected to consider reforms to the tax code and entitlement programs. On one level, given the polar positions of the two Parties on these questions, and in particular on the matter of Republican opposition to revenue (tax) increases, it is difficult to foresee a successful outcome for the special joint committee.
However, if Congress fails to enact the recommendations, any debt ceiling increase must be offset by a budget trigger, which would impose mandatory across-the-board spending cuts equal to the debt ceiling increase. Such cuts would be split between defense and non-defense programs, including entitlements, which would be an exceedingly unpopular option.
Ultimately, any final debt ceiling agreement must be voted on by Congress. This vote may engender a veto by President Obama. The agreement also calls for both Houses of Congress to vote on a Balanced Budget Amendment, though passage of this amendment is not required for the enactment of a debt limit increase; a stipulation the Tea Party had demanded in earlier negotiations.
As you can see, I opined on August 3, it was, even then, hard to fathom the United States Joint Select Committee on Deficit Reduction, otherwise known as the Super Committee, could possible succeed. The parties were simply too far apart in their basic positions, and views of how the world works, or at least, should work. The Committee’s scope of work was critical to achieving the level of debt reduction outlined by Congress, and incorporated in the proposal.
The Committee's recommendations are due today, though the Joint Leaders conceded failure this past Monday. The Co-chiars opted to send a written statement to the press, rather than actuall face the media. In the hazy aftermath of 3 1/2 months of deliberations, many Republicans claim or admit (I'm not sure which) that the failure is no surprise. A number of them are threatening to vote to remove the automatic spending cuts slated to go into effect in the event the Committee fails to reach consensus in identifying budget targets. In response to this gambit, President Obama has vowed to veto any efforts to neutralize, or eliminate those cuts.
In August I believed the danger in creating and authorizing a Super Committee was that it would bestow 6 Republicans with an inordinate amount of power, relative to the entire Congress. In effect, six men were given the opportunity to hold the process hostage. In addition, after rejecting the idea of increasing revenue as part of the solution to our debt crisis, the GOP, Tea Party, and Right Wingers everywhere are now content to blame the President for the failure of Congress to do its job. What a novel ideal; kick the can down the road. Again; seriously? Super Committee: A Super Bad Idea Fizzles! And I for one am not surprised. I am done though; holla back!
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