A “supercommittee” that was drafted to cut the country’s deficit by $1.2 trillion has failed after months of deliberation. According to the Wall Street Journal, Sen. Patty Murray (D., Wash.) and Rep. Jeb Hensarling (R., Texas), the co-chairs of the Joint Select Committee on Deficit Reduction, said in a statement, “After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline.” Rep. Hensarling also told “Fox News Sunday” that “This is a huge blown opportunity… it wasn’t so much a failure, as a failure to seize an opportunity.” The committee, made up of six Republicans and six Democrats, would not budge due in part to the fact that there is no immediate consequence to inaction. Republicans on the committee were looking to extend the Bush-era tax cuts while Democrats were trying to push higher income taxes and push federal programs like Medicare. One plan pushed by Republicans consisted of almost $900 billion in spending cuts, a raise of the age at which one becomes eligible for Medicare (up to 67 from 65), trimming the estimated cost of living for Social Security, and tax cuts across the board. In addition, to make up for the reduced revenue the plan would cut numerous, unspecified current tax breaks.
With the committee failing, spending cuts across all agencies will be pushed into effect in 2013; President Obama has vowed to veto the cuts, which are split between defense spending and non-defense spending. The biggest effect, though, is the backlash Congress faces from the average American. The stock market fell on Monday by 249 points on news of the impending failed deal. According to a CNN poll, 42 percent of Americans blame Republicans for the failed deal while 32 percent blame Democrats. The failure to strike a deal only further infuriates the American voters, who are already vocal in their disapproval of Congress, and whose approval rating is at a shocking nine percent. It is important to note that the deal this super committee was forming is not to cut money from the Federal budget, but only to cut proposed increases over the next ten year; the cuts do not shrink the $15 trillion debt the nation holds. Republican Presidential candidate Mitt Romney was quick to criticize President Obama for his lack of involvement in the committee, vocalizing one apparent side effect of the lack of deal, though White House press secretary Jay Carney noted that the onus fell on Congress, not President Obama: “They should do the right thing and come together,” Mr. Carney said. “From the beginning of this process, what the Congress needs to do to get this done has been obvious to everyone,” The New York Times reported. President Obama, too, has struck out against Republicans, saying they “refused to listen to the voices of reason and compromise,” according to Bloomberg.
With the failed deal, even more weight is placed on the upcoming election in 2012, and finding which candidate has the solutions, if any, to the debt problem at hand. The American voters believe Congress to be unwilling or unable to provide any solution, and now America has to hope that its credit rating is not downgraded again (which S&P has not done) and that either Congress can eventually find some answers or whichever President is elected—be it President Obama or a Republican candidate—that can help alleviate the United States’ ever-growing debt.
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About Jack Hopper
Jack Hopper covers finance and politics for NBR. Besides NBR, he is also Internal Affairs Chair at Ayers CCI.
