OUR VIEW: Politics as usual rules day
The supercommittee in Congress was supposed to propose at least $1.2 trillion in cuts over 10 years to the budget deficit by today. The full Congress then was supposed to take an up-or-down vote on the plan in both houses. But the supercommittee Monday announced its failure.
The main reason for the breakdown was partisan politics, Curtis Dubay says; he's a senior analyst on tax policy at the Heritage Foundation. "Congress needs to get the spending problem under control to fix the debt," he said. "But instead of working on cutting entitlements, they got bogged down in unnecessary tax hikes that would not have fixed the problem."
The supercommittee is made up of 12 members, three of each party, from both houses of Congress. The Democrats favored $1 trillion in tax increases and another $1 trillion in tax cuts over 10 years. Republicans balked, insisting that the committee wasn't supposed to consider tax increases and that a future Congress could rescind the cuts while keeping the tax increases. The Republicans wanted only cuts, $2.2 trillion over the next decade.
What happens now? According to the Budget Control Act that Congress passed on Aug. 2, if the supercommittee failed, a "trigger" is supposed to automatically make $1.2 trillion in cuts over 10 years, half from domestic and half from military spending. But Sens. John McCain, R-Ariz., and Lindsey Graham, R-S.C., said Monday that the triggered defense cuts were too deep and should be overturned. So the trigger might be pulled only partly.
"Most Democrats weren't going to get serious about the cuts," Dubay said. "They didn't want to lose their line of attack for next year's election," an attack that focuses on advocating higher taxes on the wealthiest Americans. Democrats are relying on this theme to carry them back to control of the House while retaining the White House.
He said that the supercommittee wasn't any better than the full Congress at solving the deficit and debt problems. "This issue isn't going to be solved until the next election," he observed. "If Republicans keep control of the House while winning control of the Senate and the White House, then presumably they will reform the Medicare and Social Security" entitlements without raising taxes. "But if President Obama wins re-election and Democrats keep the Senate and win back control of the House, then, presumably, they will keep spending levels the same while enacting massive tax hikes."
Even with the "trigger" cuts, deficits and debt will continue rising, just a little more slowly. Meanwhile, the country's credit rating verges on another downgrade. The stock market registered its dismay: The Dow Jones industrial average on Monday closed down 2.11 percent — 249 points, and another 53 points Tuesday.
For Californians, tactics that only kick the problem further down the road sound all too familiar. We know how that story goes, having just heard of news of another $13 billion shortfall projected for the state by summer. Neither the state nor federal budget will improve significantly until we face the problems head-on and begin to apply the remedies that work toward a balanced budget, as difficult as those remedies may be. Let's hope a year from now is soon enough for a solution.
