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Archive for Tuesday, November 22, 2011

Super failure: Deficit-cutting panel gives in to defeat

November 22, 2011

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— Congress’ supercommittee conceded ignominious defeat Monday in its quest to conquer a government debt that stands at a staggering $15 trillion, unable to overcome deep and enduring political divisions over taxes and spending.

Stock prices plummeted at home and across debt-scarred Europe as the panel ended its brief, secretive existence without an agreement. Republicans and Democrats alike pointed fingers of blame, maneuvering for political advantage in advance of 2012 elections less than a year away.

The impasse underscored grave doubts about Washington’s political will to make tough decisions and left a cloud of uncertainty over the U.S. economy at the same time that Greece, Italy, Spain and other European countries are reeling from a spreading debt crisis and recession worries.

Lawmakers of both parties agreed action in Congress was still required, somehow, and soon.

“Despite our inability to bridge the committee’s significant differences, we end this process united in our belief that the nation’s fiscal crisis must be addressed and that we cannot leave it for the next generation to solve,” the panel’s two co-chairs, Sen. Patty Murray, D-Wash., and Rep. Jeb Hensarling, R-Tex., said in a somber statement.

They added it was not possible to present “any bipartisan agreement” — omitting any reference to the goal of $1.2 trillion in cuts over a decade that had been viewed as a minimum for success.

President Barack Obama — criticized by Republicans for keeping the committee at arm’s length — said refusal by the GOP to raise taxes on the wealthy was the main stumbling block to a deal. He pledged to veto any attempt by lawmakers to repeal a requirement for $1 trillion in automatic spending cuts that are to be triggered by the supercommittee’s failure to reach a compromise, unless Congress approves an alternative approach.

Those cuts are designed to fall evenly on the military and domestic government programs beginning in 2013, and Defense Secretary Leon Panetta as well as lawmakers in both parties have warned the impact on the Pentagon could be devastating.

“In my four decades involved with public service, I have never been more concerned about the ability of Congress to forge common-sense solutions to the nation’s pressing problems,” Panetta, a former House budget committee chairman, said in a statement. “The half-trillion dollars in additional cuts demanded by sequester would lead to a hollow force incapable of sustaining the missions it is assigned.”

In reality, though, it is unclear if any of those reductions will ever take effect, since next year’s presidential and congressional elections have the potential to alter the political landscape before then.

The brief written statement from Murray and Hensarling was immediately followed by a hail of recriminations.

Senate Majority Leader Harry Reid, D-Nev., said Republicans had “never found the courage to ignore the tea party extremists” and “never came close to meeting us half way.”

But Sen. Pat Toomey, R-Pa., who authored a GOP offer during the talks, said, “Unfortunately, our Democratic colleagues refused to agree to any meaningful deficit reduction without $1 trillion in job-crushing tax increases.”

It was unlikely the outcome would materially improve Congress’ public standing — already well below 20 percent approval in numerous polls.

And the panel’s failure left lawmakers confronting a large and controversial agenda for December, including Obama’s call to extend an expiring payroll tax cut and unemployment benefits. Democrats had wanted to add those items and more to any compromise, and lawmakers in both parties also face a struggle to stave off a threatened 27 percent cut in payments to doctors who treat Medicare patients.

Comments

mloburgio 3 years, 1 month ago

Bush tax cut debate dooms deal to cut deficit

A long-running war between Democrats and Republicans over Bush-era tax cuts doomed the debt supercommittee's chances of reaching a deal. Efforts to overhaul the tax code may await the same fate as both parties gear up to make taxes a central issue in 2012 elections.

Extending all the Bush tax cuts, including provisions to spare millions of middle-class families from paying the alternative minimum tax, would add $3.9 trillion to the budget deficit over the next decade, according to projections by the nonpartisan Congressional Budget Office. The Democratic plan would add about $3.1 trillion to the deficit over the same period and make the wealthiest Americans pay about $800 billion more in taxes. http://ap.cjonline.com/pstories/us/20111122/917786117.shtml

jafs 3 years, 1 month ago

Assuming that those numbers are correct, neither plan goes anywhere near far enough.

We need to stop running deficits at all.

And, start to pay down our debts.

Is that really what the terrible argument is about - the difference between adding $3.1 and $3.9 trillion over a decade to our debt?

just_another_bozo_on_this_bus 3 years, 1 month ago

"We need to stop running deficits at all."

We need to get smart about when, how and for what reasons to run deficits, but the mindless approach to cutting them currently espoused by Republicans, and way too many Democrats, does more way more harm than good.

jafs 3 years, 1 month ago

I might concede that there are a few, and very rare times, when deficit spending might be the best choice. But, it's become the norm, and is accepted so blithely in Washington that it's frightening.

Look at the numbers - there's a huge argument about two plans, one of which increases our debt by $3.1 trillion over a decade and the other which increases it by $3.9 trillion over the same time period.

Neither one of those is anywhere near good enough to get us on the path to fiscal stability and soundness, and yet we can't even get the slightly less damaging one agreed on.

I think it's hopeless - we've had it.

I'm sure you understand that even if we balanced the budget immediately, and for the foreseeable future that we still have an outstandingly large national debt, which will never come anywhere close to being lowered if we can't even stop increasing it.

It's like a homeowner who bought a "negative equity" mortgage, meaning that each month the principal increases, even if he makes his payments each month. It's insane, and yet that's how we operate as a nation.

just_another_bozo_on_this_bus 3 years, 1 month ago

Deficits by this government are not the same as those by individuals. Trying to make the analogy isn't useful to the discussion. That's not to say that they aren't problematic-- they are. But this country is not even close to going into default, even though Republicans like to threaten to drive us off that cliff if they don't get their way.

So the issue really does come down to when we run deficits, and why. Should they be run simply so the wealthy shouldn't have to pay their fair share of taxes? Should they be run so that we can have a bloated military-industrial complex, and conduct pointless wars? Should they be run to prop up a healthcare system that's designed to deliver private profits, but not healthcare. Should they be run up to allow Wall Street to run scams on the American people, knowing full well that those same folks will be required to bail them out when their scams collapse? Should they be run deficits to subsidize fossil-fuel industries, even though they're destroying the ability of the planet to support 7 billion people? To all of that, I say no.

But should we run deficits in order to put people back to work, educate our people, feed and house those who can't fend for themselves? In the short term, I say yes, but if we can eliminate the wasteful spending described in the previous paragraph, that shouldn't have to be a permanent state of affairs.

Crazy_Larry 3 years, 1 month ago

It's a good start. Remember, you can't eat an elephant all at once. (pun intended) 3.1 and 3.9 trillion...such small numbers! Well, how big a number is a trillion anyway? 1 trillion seconds equates to 31,546 years. 800-billion dollars...We could buy 129,000 M1 Abrams battle tanks with that. http://www.youtube.com/watch?v=Z1WV8D...

Fred Whitehead Jr. 3 years, 1 month ago

"We need to stop running deficits at all.

And, start to pay down our debts". Sez Jafs. An amazing and clear grasp of the obvious.

So where do we start? Who's ox gets gored first? Which Republican will give in and increase the taxes on the rich? Which Democrat will allow the Pentagon to quit buying $100.00 hammers and $200.00 toilet seats? Who will put his re-election chances up to do the right thing? That is the question. This childish playground squabbling is actually at the feet of the voters. If their rrepresentatives do the right thing and avoid the "my way or the highway" attitudes, the clueless voters will go and elect some other stupid and jerkwater congressman who will cowtow to their own NIMBY attitudes. As long as the American voter behaves like a clueless child and votes for these iedologues with some dumb association with non-entities like the tea bag party or whatever, we will get this assinine and idiotic squabbling like childern in a school yard. What ever happened to true representatives that understand reality and not the dumb and vapid wingnuts buying TV time to bash some congressman for his alleged mismanagement of the national business? When did the single issue cabal take over the governing of the United States.?.

voevoda 3 years, 1 month ago

When it was Congress that failed to deal responsibly with the budget, more than once, why are you blaming President Obama, rockchalk1977? Put the blame where it belongs, on the ideologues in Congress and the constituents who elect representatives who campaign on a "refuse-to-compromise" platform.
Yes, indeed, by January 20, 2013, maybe we'll have a Congress that will be "the end of an error." Then maybe President Obama will have people he can work with.

Armstrong 3 years, 1 month ago

So whose playing who ? You do remember when the D's had control of the house and senate right ? Who was it that never bothered to pass a budget ? Wasn't that budget due around election time, and who punted on that responsibility ? Obama is playing you and the rest of the bunch willing to believe his tripe. He can talk a good game from a teleprompter but after that Obama fails. The R's had no complicity in the initial budget debacle the D's own it from the top down and make no mistake it was done that way on purpose

voevoda 3 years, 1 month ago

Armstrong, I remember the supermajority rules invoked during the first two years of Obama's term. That's what got in the way of real progress, although I do think that the Democrats could have strong-armed some legislation through. If they had, though, you'd be even more livid against them than you are now. Face it, Armstrong, there is nothing that Obama and his administration ever could have done that would earn your respect.
As for "tripe," a whole lot more comes from the Republican campaign zoo. Every one of them has said things a whole lot more scary than anything Obama has ever voiced.

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