Well, they’ve blown it. Failure was an option.
The 12 supercommittee senators and representatives announced Monday they couldn’t come up with a spending, taxing and deficit reduction package.
Thanks for wrecking everyone’s Thanksgiving.
The stakes for the long-term health of the economy have just grown more dire.
America’s reputation for leadership has just taken another hit. An agreement would have provided a bracing contrast to the struggles in Europe over the debt crisis there. It would prove to the world that the United States can face up to its problems, that we’re open for business.
Political analyst Larry Sabato in the Boston Herald delivered his verdict on the members of now not-so-super committee: “All 12 of them could have been heroes. Instead they’re going to be the bums. That’s what happens when you take on a big challenge and utterly fail.”
President Barack Obama’s hands-off approach doesn’t look so good either.
An agreement would have put last summer’s debt ceiling debacle behind us. And the elements were in place for the right kind of deal. Everyone had good ideas for smart entitlement reform, selective spending cuts, a solid step toward tax reform and, yes, tax increases and revenue enhancements.
But, once again, “failure” is in the headlines. I don’t know about you, but I’m frustrated and disheartened about the rounds of institutional incompetence bedeviling us: Penn State, MF Global, the Catholic Church, News Corp., Solyndra, urban school districts, Fast and Furious, Olympus
It would have been good to see something actually work as promised.
Apparently, however, the public won’t be shocked by the committee’s stalemate. In one poll conducted last week, 85 percent of respondents were not very confident or not confident at all that the committee could reach an agreement.
The gloom was pervasive: 82 percent of Democrats, 84 percent of Republicans and 88 percent of independents expressed little or no confidence.
The supercommittee’s task was to hammer out a package that would reduce the deficit at least $1.2 trillion over 10 years. Now that there’s no package, automatic cuts of $1.2 trillion are supposed to start in January 2013, with the biggest single slice, $600 billion, coming out of the Pentagon.
Want to bet now that such cuts will ever be made?
One would have thought that a deal would have been relatively easy to reach. The projected annual deficits over the next 10 years will add $15 trillion to the debt. And just consider how much tax revenue we’ll take in. And how much spending we’ll do — $44 trillion.
A $1.2 trillion package is really a tiny slice of the pie, any way you cut it.
The package would also have been a small step down the austerity path.
Those saying austerity is the wrong path for the economy right now are indeed correct. But the arguments against planning for future austerity are overblown. For starters, the coming budget crunch will be too severe to avoid it. And this deal wouldn’t have even begun to bite until 2013. We certainly hope the economy will be stronger by then.
Also, all the government austerity so far has taken place in state and local governments.
For the federal government, a deficit-cutting deal would have been just the first step down the austerity path. There have been no cuts in total federal spending yet.
Numbers from the Congressional Budget Office show that spending in fiscal 2011 reached a new high of about $3.6 trillion, up $141 billion from 2010, or about 5 percent. The previous record was in 2009, at the height of the spending for the stimulus bill, when it hit $3.5 trillion.
Similarly, the federal government has yet to shed employees. The U.S. Office of Personnel Management counts most executive branch workers except for those at the CIA and a few other agencies. It says that the number of executive branch workers has increased 14.8 percent since September 2007, before the recession hit. That’s a jump of 275,000 employees.
Bottom line, there was no good reason for not reaching a deal.
Now on to the 2012 election.