View from Australia: Return of the Supercommittee

By Jonathan Bradley

Remember the supercommittee?

Don't worry if you don't. It was devised as a kind of Get Out of Jail Free card Congress awarded to itself last August when the debt ceiling fight came to a head. With bills due and the government fast running out of the borrowing authority required to turn expiring debts into new ones, Congress looked to be steering the entire country into an economic catastrophe of its own making. Republicans felt they'd won big in the 2010 midterms, and deserved the opportunity to make steep cuts to spending programs. Democrats were willing to bargain, but refused to countenance a deal that would cut health and welfare programs without raising taxes on the wealthiest Americans. Republicans considered tax raises a deal breaker. No one could find a happy compromise, and no one could accept an unhappy compromise without losing a lot of face and upsetting his or her political supporters.

Thus was born the supercommittee.

The supercommittee, officially known by the less illustrious title of the Joint Select Committee, was a group of six congressional Democrats and six congressional Republicans tasked with finding $1.5 trillion in spending cuts. And just to make sure they'd do it, Congress set some rules in place. The debt ceiling would be raised and economic catastrophe averted, but the supercommittee had to do what Congress couldn't achieve before the arbitrary date of when the nation ran out of borrowing authority: Get the long term budget deficit under control. And if it didn't, automatic spending cuts would go into law — cuts on  health care that would displease Democrats and cuts in military spending that would displease Republicans.

And it would have to find those cuts by a date far off in the distant future: November 23rd, 2011.

The distant deadline was useful on one count: It let Congress turn its attention to bringing down the unemployment level, a far more pressing problem for a country that, no matter how much money it owes right now, has creditors lining up begging to be allowed to lend it more. Unfortunately, November 23rd no longer seems so distant, and the supercommittee has returned to prominence with a coouple of proposals. The two plans, one from the Democrats and the other from the Republicans, is aptly summarised in this chart, courtesy of Brian Beutler:

The biggest disparity between the two plans is clear: Democrats are willing to raise far more revenue than Republicans are. Which was pretty much where talks stalled this past August.  

One difference, however: President Barack Obama is absent from proceedings, as Politico reports:

Both politically and substantively, Obama isn’t interested in getting dragged into another death match with Republicans over deficits and spending cuts after the debt ceiling debacle. He turned his attention to jobs in September and — with the blessing of Hill Democrats — adopted a hands-off approach to the supercommittee.

The sidelines strategy is a notable political and tactical shift for Obama, who personally negotiated the debt-limit agreement and staked the first two years of his presidency on reaching bipartisan deals with Congress, only to see his efforts largely fail and his job approval numbers tank.

This may be a smart idea. Certainly, Obama benefits politically by talking about increasing jobs instead of discussing spending cuts. The Democratic base and independent voters like it when the president is trying to reduce unemployment. But it may take some of the intensity out of the deficit debate as well. On issues like health care and the original debt limit agreement, Republicans were able to please their base by opposing the desires of a president they do not like. If Obama wants something, Republicans benefit by opposing it. But discussions in committee rooms on Capitol Hill don't attract the attention a president does, so Obama's absence may, just slightly, calm the fractious atmosphere surrounding negotiations of this sort.

Correlation is not causation, but there's one sign the supercommittee may reach agreement. The Washington Post reports that 40 House Republicans have signed a letter asking the committee to consider tax increases in its deal:

A group of 40 House Republicans for the first time Wednesday encouraged Congress’s deficit reduction committee to explore new revenue as part of a broad deal that would make a major dent in the nation’s debt, joining 60 Democrats in a rare bipartisan effort to urge the “supercommittee” to reach a big deal that could also include entitlement cuts.

The letter they sent represents a rare cross-party effort for the rancorous House, and its organizers said they hoped it would help nudge the 12-member panel to reach a deal that would far exceed the committee’s $1.5 trillion mandate.

To be sure, this is a small step, but it's significant in that it represents a willingness among some in the party to turn their back on a pledge they made to anti-tax crusader Grover Norquist not to raise taxes. Alan Simpson, a retired Republican senator from Wyoming, was scathing about that pledge when he spoke before the supercommittee:

“Just a quick note about Grover Norquist,” Simpson testified. “If Grover Norquist is now the most powerful man in America, he should run for president. There’s no question about his power. And let me tell you, he has people in thrall. That’s a terrible phrase. Lincoln used it. It means your mind has been captured. You’re in bondage with a soul. “

Simpson went on: “So here he is. I asked him. He said, ‘My hero is Ronald Reagan.’ I said, ‘Well, he raised taxes 11 times in his eight years.’ And he said, ‘I know. I didn’t like that at all.’ I said, ‘Well, he did it. Why do you suppose?’ He said, ‘I don’t know. Very disappointing.’ I said, ‘He probably did it to make the country run, another sick idea.’”

The anti-tax position Republicans hold is untenable unless Americans radically change their opinion on Medicare, Medicaid, and Social Security, but that doesn't mean they must heed party veterans like Simpson or mavericks like the members who signed the revenues letter. If the supercommittee fails in its task, steep cuts will go into place automatically. Unless, that is, Congress decides it doesn't want them to happen. Faced with cuts none of the members like, Congress might decide to call the whole thing off. 

That's the good thing about Get Out of Jail free cards. If you control the deck, you can hand them out whenever you like.

3 November 2011