Tuesday, November 22, 2011

Super-committee failure - who won?

As part of last Summer's debt ceiling extension bill, a super-committee was supposed to identify $1.3 trillion in deficit reductions by Thanksgiving. They didn't.

A lot of finger-pointing is going on about which side is to blame. The Democrats insist that the Republicans were trying to use the super-committee as a way to cut taxes. Republicans respond by pointing out that they made a serious offer which included $300 billion in new taxes. Democrats rejected this as too small. They also objected because it would have locked most of the Bush tax cuts in place permanently. The Democrats' best offer was for $1 trillion in tax increases accompanied by $1 trillion in spending cuts and $300 billion in new stimulus spending. The two sides started making progress a couple of weeks ago then collapsed after details were leaked.

So, who won?

Progressives are sure that they have. In fact, they are pretty unanimous in declaring victory. The reason for this was that, at times, the super-committee had talked about "going big" and fixing out of control entitlements (Social Security, Medicare, and Medicaid). The automatic cuts triggered by the super-committee's failure will leave those programs untouched.

President Obama also seems to be a winner. He kept the committee at arm's length. His main contribution was a sternly worded statement that they needed to produce some results and a threat to veto anything that didn't include tax increases. By keeping his distance, Obama wanted to look like the grown-up when compared with Congress's squabbling children.

The failure also helps Obama's message. He is already saying that the failure is due to too many Republicans in Congress who are unwilling to compromise. What he really means is that there are too many Republicans in Congress. We will be hearing that message for the next 11.5 months.

This is part of a larger pattern of avoidance for political gain. Everyone knows that the deficit and the entitlements are major problems but the Democrats refuse to address them. It has been a year since Paul Ryan issued the Republican suggestion for reforming Medicare. The Democrats promised a counter-proposal but never issued one. Instead they ran ads showing Paul Ryan shoving a grandmother over a cliff.

The Democrats know that no matter what reforms they suggest, a large number of people will see decreased benefits. Rather than risk losing the support of those people, the Democrats prefer to ignore the problems and criticize the Republican efforts to be responsible.

The failure of the budget deal means automatic cuts but those will not happen until after the next election. Most parts of Obamacare will not go into effect until the next election. The XP Pipeline decision has been put off until after the next election.

So, the winners are the people who want to put off tackling real problems as long as possible 

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