It’s November 23, 2011. The world, according to most media outlets, was supposed to come to an end today because the Joint Special Committee on Deficit Reduction – a.ka. “the Super Committee” – did not find at least $1.5 trillion dollars in deficit reductions over the next ten years. Another opportunity missed by Congress to avoid the bogey man that every conservative congressman has been saying is hiding right around the corner.
Even Wall Street continued to be spooked by pending gloom and doom as evidenced by an immediate fall off in stock prices. In addition, analysts and commentators are now raising the issue that on top of pending cuts to the budget, the debt ceiling question will be raising its ugly head again … probably around February 2012.
But even with the Super Committee’s failure to prepare a recommendation on deficit cuts, some in Washington and on Wall Street welcomed Monday’s announcement that the bipartisan committee couldn’t get its act together over what would be included in the recommendation.
So what substantive content should we be reading today as a result of the Super Committee’s hard work since August?
First: the report should have included an estimate by the Congressional Budget Office of the budgetary effects of the legislative language found in the recommendation. Budgetary effects is public administration slang for “which agency and which group of citizens isn’t getting any goodies this fiscal year.”
Second: the recommended language should have had a statement spelling out how much of the deficit would be chipped away during the period Fiscal Year 2012 to Fiscal Year 2021. Whenever reductions in deficits are projected, they are never in a straight line, so even if a recommendation came out, you wouldn’t have seen (exactly) $150 billion coming out of the budget each year.
Third: there would have been a statement by the Super Committee describing the possible effects of the recommended legislation on economic growth, employment, and national competitiveness. Since Congress’ main revenue generator is taxes, and Republicans have been arguing that our high corporate tax rates have forced corporations to keep $2 trillion locked up overseas, more than likely any positive statement on competitiveness would have had to be accompanied by reductions in taxes. With Democrats in the room, you’d need the luck of many an Irishman to see tax reductions.
Finally: the recommended legislative language would have included the repeal of any existing language running contrary to statutes proposed by the Super Committee. Needless to say the Government Printing Office is happy that there is a little less printing that will have to be done before Turkey and High Carbs Day.
Issues in Greece, Italy, and Spain – specifically American financial system exposure to Greece, Italy, and Spain – should have been giving Americans more worry than what the media made the Super Committee process out to be. To its credit, the business media has been giving Europe a lot of attention. Unfortunately most Americans have not – much less knowing where Greece, Italy, and Spain are.
The real pressure would have been on the members of Congress having to defend an up or down vote on cuts to defense (a real nationwide jobs killer) and discretionary spending (an inside-the-Beltway jobs killer).
Fortunately, the Super Committee did a super nothing of a job, leaving us at that familiar place in the budgetary process: square one.