Thoughts amidst the failure of the ‘Super Committee’
Adam Newman | Monday, December 5, 2011
“Failure.” This word accurately and succinctly sums up the efforts of the so-called “Super Committee.” This committee, composed of six Republicans and six Democrats, was charged with finding between $1.2-1.5 trillion in deficit reductions by the end of the year. If this group was unable to come up with any savings, $1.2 trillion in automatic cuts, half to defense and half to social programs, would go into effect in 2013. Many hoped that these highly concentrated cuts to social programs and defense would incentivize the Super Committee to create a more balanced plan that included reforms to entitlements and new tax revenues.
Many Democrats, like Senator John Kerry, wanted to “go big” and create a deficit reduction package of $4 trillion with $3 in spending cuts for every $1 in revenue increases. However, Republicans refused to endorse any plan that increased overall tax revenue. Two days before their late November deadline, the co-chairs of the Super Committee announced that talks had broken down.
One does not have to be a White House political advisor to understand the Republican strategy. The President’s unpopularity, the weak economy and the ability of Republicans to unite on a platform of “no” has given them an opportunity to ask: “Why make a deal where we get 50 percent of what we want while Barack Obama is President and the Democrats hold the Senate, when we can get 100 percent of what we want when Mitt Romney is President and Republicans hold the Senate and House?”
Besides this strategy being extremely cynical, it is also misguided. If Republicans sweep the 2012 elections and subsequently try to unilaterally reform Social Security, Medicare and Medicaid, they will fail. And if they do not fail, they will pay a major political price in the next election. This will be due to a re-energized Democratic Party eager to oppose the Republicans and the general public reacting to Republican “overreach.” This explains why the Republicans should have accepted the offer of Super Committee Democrats, because the Republicans may never get a deal as good from the Democrats again.
I will end by asking a very simple question: Where was the president during the Super Committee ordeal? I am sure that the president’s political advisors told him that the Super Committee was the equivalent of a black hole. It was never going to succeed given the differences that Republicans and Democrats have, so it would only weaken the president’s standing if he got involved and the committee subsequently failed.
I understand that Barack Obama is in a tough position because any meaningful deficit reduction plan has to include reforms to Social Security, Medicare and Medicaid. Many Democrats believe that even discussing entitlement reform disgraces the guardian-like role the party has maintained over these programs for generations. At the very least, reforming entitlements would greatly upset the liberal base less than a year before the 2012 election.
The president could hedge against these losses by finally endorsing the deficit reduction plan of his own fiscal commission, nicknamed “Bowles- Simpson.” Bowles-Simpson may have provisions that the president does not like, but it is much more balanced than any proposal the Republicans will ever offer. The president’s endorsement of Bowles-Simpson will silence the Fox News Analysts who say he is fiscally irresponsible, show the business community that he is serious about fixing the dysfunctional tax code, continue to show the liberal base that he wants to raise taxes on the wealthy and most importantly show the American people that he can effectively lead on a tough issue, rather than kick the can down the road.
I am sure that when President Obama announced his candidacy in 2007, deficit reduction was not on top of his list of priorities. But comparing the political climate of 2011 to that of 2007 is similar to comparing night and day. The tides have changed, and the president should adapt by offering a long-term deficit reduction plan while simultaneously offering solutions for short-term stimulus.
But at this point in Obama’s tenure, my guess is that the president is going to “stay the course” with his illusive leadership on long-term deficit reduction. This is unfortunately expected during the run-up to an election. Even still, I hope that President Obama remembers that future generations do not build statues to people who sat on the fence.
Adam Newman is a junior finance major. He can be reached at firstname.lastname@example.org
The views expressed in this column are those of the author and not necessarily those of The Observer.