The co-chairs of the Joint Select Committee on Deficit Reduction announced on Monday that the “super committee” had reached an impasse and would be unable to deliver a compromise plan on the budget deficit. On November 23, Ron Haskins answered your questions on the failure of the Congressional super committee in a live web chat moderated by POLITICO.
12:30 Comment From David: Why did the super committee have so much trouble crafting a compromise plan?
12:33 Ron Haskins: There are many reasons but let’s start with the two most obvious: most Republicans oppose tax increases and most Democrats oppose cuts in the Medicare, Medicaid, and Social Security. Another factor is that the appointments to the super committee were based on loyalty to party positions. If Republicans wanted a deal, they would have put members like Senator Coburn on the super committee; if Democrats wanted to deal, Senator Warner would have been on the super committee. This observation leads to the single biggest problem: the nation is not getting leadership from Congress or the White House. A pox on all their houses.
12:33 Comment From John T.: What will be the fallout now that the super committee has failed?
12:38 Ron Haskins: The most important consequences is that our national political leaders have blown yet another chance to make progress on a problem that is literally a threat to the future of the country. I dearly hope that one consequence of the super committee’s failure is not that congress, having failed in its most recent gambit, will now try to figure out how to undermine the sequester. If congress actually allows the $1.2 trillion sequester to go through, we would have achieved $2 trillion in deficit reduction in the past year. That is not gridlock. Of course, like most observers, I would prefer and big deal (Go Big! as they say), but I’ll take little bites if I can’t get the whole meal. I wish another consequence were that both parties would suffer major electoral defeats in the 2012 elections and that the public, in polls and in surveys of voters after the election, would make it clear that there will be consequences for elected officials who do not deal seriously with the deficit and compromise to make progress.
12:38 Comment From Marcus: Will the failure of the super committee be critical to the 2012 election?
12:41 Ron Haskins: I don’t think there will be electoral consequences for the monumental failure of the super committee, but I fervently wish there would be. The underlying problem here is that the public is not ready for the actions that will be required to seriously reduce the deficit. The public is finally aware there is a problem and they tell pollsters that Congress and the president should do something. But they also say they don’t want cuts in Social Security or Medicare and they don’t want to raise taxes. Here I think the president must step up and tell the American people what will be required. We need a national educational campaign led by the top people in both parties.
12:42 Comment From Michael: Why wasn’t President Obama more involved with the super committee in trying to facilitate a compromise plan?
12:46 Ron Haskins: The president has not talked with me about his reasoning, so let me guess. He may well have made a political calculation that the consequences of raising taxes and cutting Medicare and other entitlements would have hurt him in the 2012 election. Thus, his best course would be to avoid the super committee and let them deal with the problem. Besides, lots of smart people thought from the beginning that the super committee will fail, so the president would be better off if he stayed as far away as possible. To me, it looks like the president — just like the brave souls up on Capitol Hill — made a political choice rather than take the risks that will inevitably come for any politician that actually solves the nation’s deficit problem.
12:46 Comment From Jennifer: Now that the super committee has folded, when do you think America will start to tackle its $15 trillion deficit problem?
12:50 Ron Haskins: I take a back seat to no one in disgust over the failure of the super committee. Even so, let’s focus some attention on what has been accomplished; namely, we got $900 billion in deficit reduction out of the debt ceiling deal and if the sequestration takes place, we’ll get another $1.2 trillion (all figures over 10 years). As Peter Orszag recently told the National Journal, our debt crisis needs a solution that is more like a diet than an exam. In other words, this race may be won by slow and steady progress and not a big bang.
12:50 Comment From Lucy: What happens now regarding the budget deficit?
12:56 Ron Haskins: I think I have been wrong about almost all my previous predictions, so don’t believe this one. One the other hand, this is Washington — it’s more important to be interesting than to be right. The next confrontation might occur after the election in a lame duck session of Congress. The big issue will be renewing the Bush tax cuts. In a world that has even a modest level of rational behavior, the two parties would decide in advance that they cannot take a legislative action that would increase the deficit by around $3.7 trillion over ten years by simply renewing the Bush tax cuts. Democrats might take a strong position to insist that the cost of renewing even part of the Bush tax cuts will be a budget deal that involved both program cuts and new revenues. But Democrats have not shown much courage in the past when it was time to pass or renew the Bush tax cuts. Politicians love to play to the voters and voters like tax cuts. Nonetheless, I expect there to be a lame duck session, and I expect that the media and many DC groups that hate the deficit to make very forceful public cases against a straight renewal of the Bush tax cuts.
1:02 Vivyan Tran: Thanks for the questions everyone. Happy Thanksgiving!
Sentiment inside the Beltway has turned sharply against China. There are many issues where the two parties sound more or less the same. Trump and others in the administration seem heavily invested in a ‘get very tough with China’ stance. It’s possible that some Democrats might argue that a decoupling strategy borders on lunacy. But if Trump believes this will play well with his core constituencies as his reelection campaign moves into high gear, he will probably decide to stick with it, if the costs and the collateral damage seem manageable. But that’s a very big if, especially if the downsides of a protracted trade war for both American consumers and for American firms become increasingly apparent.