Sunday, December 18, 2011

A Commission Designed To Fail

The budget deficit and debt debate has been so debilitating to Congress that they gave up on trying to reach an agreement and instead appointed the so-called “super committee” to do it. This committee, consisting of six Democrats and six Republicans, was chartered to formulate a plan for reducing the deficit by $1.2 trillion over the next ten years. The committee would report back to Congress with its plan, and Congress would vote on it. If no plan was presented or if Congress voted it down, automatic spending cuts equal to the $1.2 trillion would kick in.

In government, when you want to make sure nothing happens, you appoint a committee.

There are 535 members of Congress (100 U.S. Senators and 435 Representatives). They argued about the debt and deficit for months, and couldn’t agree. What reason was there to think that this super-committee of twelve would be able to work magic and come up with a plan when Congress had been so utterly unable to do so for so long? And even if the committee did somehow develop a debt plan, what reason was there to think Congress would approve it after Congress had been deadlocked for so long?

The answer is that this committee was designed to fail. The people appointed to it were the most ideological from both sides. There was no chance they were going to come together after all of the political wrangling and suddenly have a love fest. It was just a way of letting Congress kick the can down the road a little longer and avoid having to make tough choices.

So the committee has failed, as planned, and the automatic spending cuts will be enacted.

In a paragon of political double-speak, Rep. Jeb Hensarling (R-Texas) said, “It wasn’t so much a failure as a failure to seize an opportunity.” If you want to know what’s wrong in Washington, just mull that statement over for awhile. Here we have a committee that was given the expressed mandate to formulate a plan to reduce the budget deficit by $1.2 trillion, yet when the committee functionally collapses with no plan, it’s not a failure, it’s a missed opportunity.

Mr. Hensarling, instead of lamenting this missed opportunity, why don’t you take the lead in getting Congress to fix the problem? Congress has unlimited opportunities to fix the deficit. Congress could have done it instead of appointing a committee. Congress could go into session tomorrow, or the next day, or next week, or next month, and do what needs to be done.

Well, now because this committee has failed, oops, I mean missed an opportunity, we’ll be afflicted with those “draconian” (if I hear that word one more time, I’m going to throw up) automatic across-the-board budget cuts.


Congress, demonstrating yet again that it isn’t serious about any of this, put in place the provision that the cuts won’t happen until 2013, over a year from now.

Once again, we see that the committee was a farce. It didn’t have those “draconian” (excuse me for a moment – OK, I‘m back now) cuts hanging over it ready to immediately fall like a guillotine if the committee failed to reach agreement. The cuts won’t happen until over a year from now!

Hmmm - 2013. There’s something about that date. 2013, 2013 – what is it? Oh, yes, we have an election in November 2012. They put the cuts off until after the next election!

So what do you think will happen in the first Session of Congress in 2013? They’ll undo the cuts, of course. The cuts will never happen, and that was the way it was planned.

You can’t make this stuff up.

$1.2 trillion sounds like a lot of money, but in the world of Washington, it isn’t.

The total federal deficit recently reached $15 trillion. So even if the deficit were reduced by $1.2 trillion, it would be a rather modest 8% reduction. And that’s over ten years, so it comes out to only 0.8% per year. Yes, all of this caterwauling in D.C. is because they can’t find a way to reduce the budget deficit by somewhat less than 1% a year.

Or look at it this way. The total federal budget for 2011 is $3.8 trillion. The $1.2 trillion of cuts over ten years represents a cut of $0.12 trillion per year, or a little more than 3% per year.

In a time of financial distress, Congress can’t manage to reduce the federal budget by 3% a year or reduce the deficit by 0.8% a year. How much do we pay these people?

It gets better. Another factoid that no one is talking about right now is that even if the $1.2 trillion of cuts do happen, nothing is actually going to be cut. That’s right, even under that “draconian” (there I go again) scenario, nothing will be cut, because in Washington, an increase is a cut. The “cuts” that are the target of all of these political machinations represent a reduction in the budget increase. That’s the notorious base-line budgeting process whereby every year the federal budget automatically increases across the board by some percentage, and then any reductions to those increases are demagogued as “draconian” (I can’t help it) cuts. But the spending goes up in absolute terms everywhere. So an increase is a cut in Washington; even if those $1.2 trillion in “cuts” happen, spending will still go up. Nothing will be cut!

Here’s what’s really going on. There is a fundamental ideological war going on in this country. There are two competing visions for the future of America. Liberals want to continue on the path to a European-style socialist democracy with lots more government spending, much higher taxes and more government borrowing, a much smaller military, complete government-run healthcare, more government spending on “green” energy, more entitlements (the latest proposal being government-paid-for baby diapers), more government jobs programs, more environmental regulations, and so on. Conservatives what to roll back the welfare state, cut government spending, reduce taxes, reduce regulations that inhibit the economy, keep a strong national defense, promote traditional American values and patriotism, foster individual responsibility and self-reliance, let the private economy create jobs, and not have the government do anything for people that the people could and should do for themselves.

This battle for the future of the country vis-à-vis big government vs. small government has been going on for decades, but it has intensified during the last three years. Since then, Democrats and Republicans in Congress have been fighting vigorously over everything, but especially over the issues of government spending, entitlements, the federal budget, and the deficit, as we have all witnessed.

The resolution to this fundamental conflict will not come until November 2012. Until then, expect more of the same.

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