The supercommittee has failed.
The 12-member bipartisan Congressional panel entrusted with finding a way to cut $1.2 trillion from the deficit over the next ten years couldn't come up with an agreement.
It seems that Republicans won't agree to raise taxes and Democrats won't agree to reform entitlements. Neither side will give. They are at a hopeless impasse.
The American people are not terribly surprised. In fact, approval ratings for Congress are at or near an all time low. Most Americans, as well as people from around the world, are tisk-tisking and shaking their heads.
But the good news is getting lost.
The failure of the supercommittee triggers automatic cuts that were put in place in the event the 12-member panel failed to reach an agreement.
The automatic default trigger cuts a total of $1.2 trillion across the board in defense and in discretionary spending over the next 10 years.
That's right. I said cut.
Lost in the ugly political wrangling, the low opinion of Congress, the lack of a grand agreement and the debt downgrade last summer is the fact that the U.S. Congress actually cut spending and didn't even raise taxes.
Sure, it's only $1.2 trillion over 10 years while the government probably needs to cut $10 trillion to $15 trillion over that period. But, Congress finally moved the ball in the right direction.
Congress has shown that it can cut spending. If it can cut $1.2 trillion, it can cut more. If Congress can cut more, it is possible that the country can avoid an economic disaster down the road. There are signs of hope that we can navigate through the current economic mess.
Of course, this was all lost on Standard & Poor's, the rating agency that rubber-stamped subprime debt with "AAA" ratings and significantly contributed to the global financial meltdown that ensued. S&P downgraded U.S. debt shortly after the announcement of this debt deal last summer.
Now, to be fair, I don't blame S&P for downgrading U.S. debt given the current level of debt and deficits. But, it was the timing that seems peculiar.
There was no downgrade after the second or third consecutive year of deficits in excess of a trillion dollars. The agency saw no need to lower U.S. debt ratings when the current administration actively pursued policies that would choke economic growth. When the Obama administration failed to come up with a credible plan to reduce the debt, S&P did nothing. But, when the government took a step in the right direction and cut spending – that was the last straw.
The point is that nobody seems to see any good news in the fact that the government finally cut spending. The left hates the deal, the right hates the deal, the press hates the deal, and even S&P hates it. At last Congress managed to do something that needed to be done for the good of the country – and everybody is spitting on them for it.
I personally applaud whenever the government cuts spending. It doesn't matter they could have cut more or that the process was ugly. I'll save my saliva for when Congress fails to cut spending.
The bottom line is that in an age of gloom and doom there is good reason to be hopeful. We might just get out of this fiscal mess after all.
About the Author: Tom Hutchinson
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