Tags: Barack Obama | Economic- Crisis | Tea Party | debt | deal | super | committee

Debt Focus Shifts to 'Super Committee'

Wednesday, 03 Aug 2011 01:35 PM

By Dan Weil

One thing is clear about the new debt/deficit law: It won’t cut spending.

Indeed, estimates from the Congressional Budget Office (CBO) show that discretionary outlays will rise 18 percent over the next 10 years — to $1.23 trillion — under the new rules.

The supposed $917 billion in discretionary spending cuts during that period that congressional leaders touted as part of the new law represent reductions from the CBO’s March baseline of future budgets. That’s a lot different than slashing spending from actual current levels.

“No program or agency terminations are identified in the deal,” Chris Edwards, tax policy studies director at the Cato Institute, writes in an analysis of the new law.

“None of the vast armada of federal subsidies are targeted for elimination. Old folks will continue to gorge themselves on inflated benefits paid for by young families and future generations.”

Editor's Note: 50% unemployment, 90% stock market drop, 100% inflation.
See the Evidence. Click Here

No specific spending cuts are included in the new law, and the budget deficit will still hit $1 trillion next year, he notes.

Many experts are skeptical that Congress will even end up enacting the spending growth reductions the law mandates. Congress set up similar spending caps in the 1980s and ’90s — only to ignore them when it came time to actually cut programs.

“It does nothing to address the real drivers of our debt,” said Sen. Tom Coburn, R-Okla. “It eliminates no program, consolidates no duplicative programs, cuts no tax earmarks, and reforms no entitlement program.”

Now, Washington’s attention is shifting to another of the law’s provisions: establishment of a 12-member bipartisan congressional committee to recommend at least $1.5 trillion in deficit reduction by Nov. 23.

One big question is whether the committee will adopt any tax increases, an idea that remains anathema to many Republicans, but President Barack Obama and other Democrats are championing strongly.

The two sides also are at odds over entitlement spending such as Social Security, Medicare, and Medicaid, with many Democrats pledging to protect virtually all benefits and Republicans open to reductions.

Although congressional leaders have been mum so far on whom they will appoint to the Joint Select Committee on Deficit Reduction, Republicans promise to name members who oppose tax increases, while Democrats promise to do the opposite.

“We are not going to raise taxes coming out of this joint committee,” Senate Minority Leader Mitch McConnell said on Fox News.

Senate Majority Leader Harry Reid, meanwhile, stated on the Senate floor that “there has got to be some revenues” to ease the hardship created by spending cuts.

Potential choices for House Republicans include Ways and Means Committee Chairman David Camp and Budget Committee Chairman Paul Ryan — two stalwarts against tax hikes.

In the Senate, Arizona’s John McCain recommended GOP colleague Rob Portman of Ohio, who served as President George W. Bush’s budget director.

Oklahoma Republican Sen. Coburn, part of the bipartisan “Gang of Six” that sought a budget compromise in recent weeks before falling apart, said he’s not interested, Bloomberg reports.
“I’m committee-ed out,” Coburn explained. “I’ve worked well over a year and a half on these issues — they just probably need some fresh blood.”

As for Democrats, Reid was noncommittal as to whether he would appoint Gang of Six Sens. Richard Durbin of Illinois, Kent Conrad of North Dakota, or Mark Warner of Virginia.

On the House side, the fiscally conservative Blue Dog Coalition of Democrats wants to see one of its members join the committee.

To be sure, without considering tax hikes and entitlement cuts, the panel almost certainly won’t be able to produce $1.5 trillion of deficit reduction. The group must offer its plan by Nov. 23, and Congress must approve it by Dec. 23, or automatic spending cuts will kick in.

Many are skeptical of the committee.

“I do not like the super committee,” said Sen. Ben Nelson, D-Neb.

“It’s just a convoluted maze to do things in Washington the usual Washington way,” The New York Times quoted Nelson as saying.

Editor's Note: Economic Meltdown to Unravel in 2012.
See the Disturbing Charts. Click Here

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