What Happens When the Super Committee Fails?
Super Committee Poised for Failure
The Super Committee, formed to find a solution to a fictional problem, was basically doomed from its inception. The idea that the United States can squash its deficit without bringing in any income is inherently silly, yet that's what Congress convinced itself that it could do.
Congress was wrong. The Super Committee will admit defeat at midnight on Wednesday, November 23. The deadline to hand in any legislation is actually Monday, November 21, and the Super Committee will miss that deadline, too.
Congress' approval rating has fallen to an abysmal 9% -- to put this in perspective, herpes is now slightly more popular than Congress. Bed bugs really can't be that far behind.
What Happens When the Super Committee Admits Defeat?
What happens next? "Death by a thousand cuts": a series of program reductions geared to agonize both sides of the aisle: cuts to defense, education, and public housing programs, to name a few. (Mark Mardell writes that the Super Committee failure wasn't supposed to happen, but we're not sure how the committee could have succeeded.)
These automatic budget cuts don't kick in until 2013. This whole exercise was never about actually solving a problem (partly because the problem just isn't as bad as was advertised: raising the debt ceiling is quite routine).
However, January 2012 will see the rollback of payroll tax breaks, which which is the only time "trickle-down economics" works: workers will see nearly $1,000 per year chopped off their paychecks. Also, unemployment insurance won't last as long. Bad news, since it takes an average of eight months to find a new job these days.
Kick the Can
The Super Committee, and its inevitable failure, was all about kicking the can. Kicking it past midterm elections, kicking it past Election 2012. This gives even more spin ammunition to both the Dems and the GOP during the protracted election season, and an opportunity for congressional reps to curry favor with their constituencies.
The Super Committee is made up of six Democrats and six Republicans, who basically carried the tax-the-rich vs slash-public-project-funding argument to a smaller room. What did you think was going to happen?
To be fair, neither side has been totally recalcitrant. The problem is that the Dems don't think that the GOP is giving up enough in rollbacks of tax breaks. The GOP doesn't think that the Dems are cutting deeply enough into social programs.
Even if the Super Committee passes something, anything by a 7-member majority, it must then go through the House and the Senate by December 23.
While the metaphor is imperfect, it helps to look at it this way: if you're short on rent, is selling one CD, two dishes, and a few t-shirts really going to help? Even if you squeak by this month, what about next month?
Even if the Super Committee manages to agree on modest cuts (say $1.5 trillion or less), then the US debt will still be growing faster than the economy.
See, this is why our debt was downgraded: because the rest of the world perceives our government as unable to solve its own problems rationally without turning them into ideological battlegrounds. The rest of the world is kind of right.
Do you understand the whole "Occupy Wall Street" thing now?