As supercommittee deadline nears, doubts and speculation about backdoor options rise
With just 10 days to go before the deadline for the supercommittee to make a deal, news outlets are reporting more reasons to worry that the talks will fall
Jul 31, 20201.7K Shares1.7M Views
With just 10 days to go before the deadline for the “supercommittee” to make a deal, news outlets are reporting more reasons to worry that the talks will fall apart — and that Congress may try other maneuvers to address the deficit.
As was to be expected after this summer’s debt-deal deadlock, members of the congressional “supercommittee” remain hung up on tax and entitlement reform.
At the moment, Republicans and Democrats are divided by their respective plans, with each offering a mixture of spending cuts and tax revenue increases. Republicans have offered a $1.2 trillion deficit-reduction package with roughly $750 billion in spending cuts over the next decade and a $300 billion tax proposal mostly comprised of deduction eliminations. Democrats have offered to trim $2 trillion, with their proposal calling for an almost equal mix of spending cuts and tax increases. The committee was assigned to come up with $1.2 trillion in deficit savings.
Attention now has turned to other courses of action available to the committee to try and avoid the “trigger mechanism,” a fail-safe that would result in deep military and across-the-board cuts in the case a deal is not made.
Texas Rep. Jeb Hensarling, the panel’s Republican co-chair, told CNN’s “State of the Union” that supercommittee may punt some of the decisions about deficit reduction to individual committees — “a two-step process,” as he described it. In that scenario, the supercommittee would set the amount of increased tax revenue to be met, and individual congressional committees would then draft legislation to meet it.
The chairmen of the relevant committees — the House Ways and Means Committee and the Senate Finance Committee — have said that they would accept that arrangement, according to reporting this morning from the New York Times.
But even if no deal is agreed to and the “trigger” is pulled, there’s still reason to believe the heavy cuts it calls for will be avoided.
The trigger’s cuts do not go into effect until January, 2013, so Congress would have a year to legislate their reversal. That would likely “launch a heavy lobbying effort on K Street, where defense firms in particular would be eager to prevent automatic cuts,” according to The Hill.Senator Pat Toomey (R-Penn.) addressed the possibility on “Fox News Sunday,” saying, “In the very, very unfortunate event that we don’t [make a deal] I think it’s very likely that Congress would reconsider the configuration.”
President Obama has told the committee that it needs to “bite the bullet,” and has floated the possibility that he may blockany attempt to create a workaround from next week’s Thanksgiving deadline.
Camilo Wood
Reviewer
Camilo Wood has over two decades of experience as a writer and journalist, specializing in finance and economics. With a degree in Economics and a background in financial research and analysis, Camilo brings a wealth of knowledge and expertise to his writing.
Throughout his career, Camilo has contributed to numerous publications, covering a wide range of topics such as global economic trends, investment strategies, and market analysis. His articles are recognized for their insightful analysis and clear explanations, making complex financial concepts accessible to readers.
Camilo's experience includes working in roles related to financial reporting, analysis, and commentary, allowing him to provide readers with accurate and trustworthy information. His dedication to journalistic integrity and commitment to delivering high-quality content make him a trusted voice in the fields of finance and journalism.
Latest Articles
Popular Articles