Image: im pastor rick, flickr
Congress and DC will be consumed this week with news about the deficit Supercommittee. Numerous sources are reporting that Committee Members will announce Monday that it failed to reach agreement. Committee members said they’d continue talking throughout Sunday.
The Committee was charged with reaching a deal by Wednesday to reduce the federal deficit by at least $1.2 trillion over the next 10 years. If it failed, a $1.2 trillion across-the-board cut to defense and non-defense programs would take effect in January 2013.
The real deadline is Monday because any deal has to be publicly available for 48 hours before Congress can vote on it. So expect an official announcement on Monday, with lots of media attention to follow. Already, the political spin from both parties is in full force. Politico rounded up comments from the Sunday talk shows:
Democratic Supercomm Member Sen. John Kerry said Democrats made an unprecedented offer to cut entitlements, a claim Republican Supercomm member Sen. Jon Kyl said is untrue. Republican Supercomm member Sen. Pat Toomey accused Democrats of not wanting to cut spending unless there was a $1 trillion tax increase.
Outside of the Committee, Republican Sen. Mark Rubio blamed the White House for exerting little leadership on the issue, and suggested the White House might want the Committee to fail so that the President can run against a “do-nothing” Congress. Democratic Sen. John Kerry claims they asked the White House to be hands-off to avoid further politicizing the process. Kerry also said that some Republican Members have told him they want to wait until next year, when they expect to win the Senate and White House, and write their own deal.
And there is this interesting quote: “Mark Zandi, chief economist of Moody’s Analytics, said Sunday there’ll probably not be a significant financial market reaction to the supercommittee’s failure to forge a deficit-reduction deal because expectations have been so low among investors.”
It’s unclear what happens next. But some Members have already mentioned trying to rework the 2013 automatic spending cuts to shield defense or social services programs.
For a good overview see the Washington Post’s “Debt supercommittee a ‘huge blown opportunity,’ Hensarling says.”
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Can you tell me, if the automatic $1.2T in cuts get triggered, is transportation funding on the chopping block?
Excellent question. Short answer: depends on what congress does. Some funding is protected – the Highway Trust fund. But…congress can essentially change the rules at any time, assuming both chambers, both parties, and White House agree.