Instead of reducing America’s ballooning national debt with spending cuts, the 12-member Super Committee yielded no grand bargain. But the very collapse of the Super Committee now opens the door for some real horse-trading to really begin. By J BROOKS SPECTOR.
Earlier this year, the US Government began its bureaucratic equivalent of a stroll through the monkey house at the zoo. At first the small guys get started: the marmosets start their chirping sounds; then the gibbons call; the howler monkeys – well – they begin to howl; then the baboons cry out; and, then, soon enough, the really big primates – the chimps, orangutans, bonobos and gorillas all make their deeper sounding calls of alarm and cries for attention. (The writer has been waiting months to find a way to work this image into a story on politics.)
For America’s political leadership, this was not precisely about a fight over territory for the feeding grounds with the especially tender fruits, roots and shoots, or for the best places to make their sleeping nests at night. But there are similarities. In this US governmental version, the screaming was a rumble in the jungle over the federal budget and who gets the juicy bits and who has to pay for them. First the political small fry on congressional subcommittees and aides and staffers got started, then the two parties’ leadership cadres got into it as well – with posturing, huffing and puffing. Concurrently there were the cries and howls of disaster from the US’ chorus of commentators, bloggers and the other charter members of the commentariat on the 24/7 TV news channels, in the papers, on the blogs and in the internet newsletters. Although critics like neo-conservative Charles Krauthammer could say on the television that the greater fault was with the Democrats for their insistence on raising taxes to cut off investment as the economy struggles, also typical of many other comments was that of the more liberal Eugene Robinson, writing in “The Washington Post,” who argued:
“As usual, the two parties began with vastly different ideas of what it means to negotiate. Democrats envisioned meeting somewhere in the middle, while Republicans anticipated not moving an inch. This isn’t just my spin, it’s a matter of public record: Before the 12-member supercommittee ever met, House Speaker John Boehner warned that they had better not agree to any new tax revenue.
“Think about this for a minute. The whole point of the subcommittee exercise was to begin reducing the ballooning national debt, now more than $15 trillion. Closing such a big gap with spending cuts is possible only in the parallel universe inhabited by GOP ideologues, a place where the laws of arithmetic do not apply.
“Here in the real world – where tax receipts as a percentage of gross domestic product are lower than they’ve been since 1950 – it’s ridiculous to think of solving the long-term debt problem without substantial new revenue. Yet the position taken by Republicans in Congress is that tax rates can go only down, never up….”
Throughout, the central question was whether these warring parties could put the posturing and chest thumping aside for just long enough to pass a budget for the current fiscal year, then move on to work out a compromise plan for future budget cuts, and then – eventually – establish a path to carry all this forward into the next decade, without grinding the government to a halt in the meantime. And apparently the answer is no, even after the various warring tribes (or species) had drawn their respective lines in the sand. And yes, The Daily Maverick knows this is a real melange of metaphors – but the mix helps give a sense of what’s been going on these past months. In a phrase, a real mess.
Or not? At least for some politicians. When rumours that the Super Committee was about to admit defeat – i.e. its inability to do what it was expressly set up to do – started gathering steam over the weekend, the first reactions were just a little short of Chicken Little’s cry that “the sky was falling” on the republic. Assiduous readers of The Daily Maverick and iMaverick will recall the collapse of efforts to achieve the so-called “grand bargain” that was supposed to reset the national debt ceiling, achieve agreement on tax changes, spending cuts and a way forward to bring the national debt down gradually. And it was supposed to do this with the willing agreement of the Congress and the President; the Republicans and Democrats. Everyone was supposed to give a little, get a little – even the country as a whole.
Of course, the way it turned out, there was no grand bargain, just a more modest agreement to cut some significant spending from civilian and military spending, reset the debt ceiling so that the federal government wouldn’t go into a technical default, and set up a special, new congressional committee – Democrats and Republicans, senators and congressmen and women. These 12 members were tasked by the other 523 members with figuring out what else to cut and where to enhance revenue by 23 November – or an automatic, rather more Draconian process – the sequester of around $1.2 trillion for the next decade, beginning in 2013, would kick in. In effect, it was a self-imposed chain on the refrigerator since the Congress decided it could not trust itself to go onto – and stick with – a rigorous diet and exercise plan.
While all of this maneuvering was going on, of course, the US national credit rating was bumped downward as a warning about the lack of political will in the country to take hold of its taxing and spending patterns and set up a real path for the future. In effect, the Standard and Poors people were insisting that the country was not bankrupt fiscally – only politically. But presumably the credit downgrade was supposed to be the policy shot across that proverbial bow that became the wakeup call. (Sorry, but this mess just invites a mishmash of metaphors.)
And so, in the fullness of time, the leaks from the super committee hinted, then bellowed, that the members of the committee from the two parties were coming no closer to setting out a plan – or even sketching out a way forward – and that was an outcome of the deadlock in the contemporary American political system. As political theorist and historian Francis Fukuyama (and the man who gave us the “end of history” at the end of the Cold War) wrote in Tuesday’s Financial Times:
“The failure of the congressional supercommittee to reach a deal on the budget is a sad reflection of the polarisation in the US today. But this failure has roots that go well beyond the individuals charged with coming up with a plan to reduce the deficit; they go to the very nature of the political system. And while this committee has failed ignominiously, it contains the seed of an idea that might show us a way out of paralysis.
“Americans take great pride in a constitution that limits executive power through a series of checks and balances. But those checks have metastasised. And now America is a veto-cracy. When this system is combined with ideologised parties, one of which sees even the closing of tax loopholes as an unacceptable tax increase, the result is paralysis.”
For Fukuyama, the system is not just broken, it is frozen solid. The fact that Congress and the political system more generally suffers from an over-inflamed purple-hued political rhetoric and culture that withers the chances of compromise; that no grand bargain deal for the sake of the republic was possible; that the Congress can barely pass the budgets of government departments before the fiscal year is over; that the special committee they set up to box themselves into a deal they couldn’t evade similarly couldn’t reach any sort of conclusion all would seem to underscore Fukuyama’s despairing comments.
But there is another interpretation. The very collapse of the supercommittee now opens the door for some real horse-trading to really begin. Along with the reciprocal blaming that is a necessary corollary of the dealing. As the dynamic is beginning to play out already, the Republican Party’s leadership is starting to signal that they are looking for ways around that chain on the fridge they helped put into place by proposing and voting alternative measures. A few of their members have even indicated a willingness to consider some modest revenue enhancement – closing some of the US tax code’s more egregious tax loopholes and income exemptions, although not the tax rates in the federal income tax schedules that would ratchet up the percentages due, before maximum and creative use of tax breaks, tax avoidance – and just plain vanilla tax evasion.
Meanwhile, Democrats in Congress are arguing that they were always open to compromise – pointing to the negotiations in which Republicans barely yielded on any tax increases at all, despite the cave by Democrats on spending. This is now further tangled with the Bush era tax cut in payroll taxes – the money that supports Social Security. These cuts are due to expire shortly – giving Democrats an interesting club to use: those Republicans want to raise the taxes on working men and women – an estimated $1,000 per family on an annual income of $50,000 per year, even as they steadfastly refuse to raise ten cents worth of taxes on those in the upper 1% or 10%, for that matter. An additional factor is extended unemployment benefits, similarly set to expire soon. And another swipe at the people most threatened by the current economic malaise.
And President Obama in all this? While Republicans vying for the presidential nomination have tried to accuse Obama of being AWOL during this latest round of negotiations, it is hard for them to move beyond the reality that they were the part-authors of the super committee precisely to keep the tax and spending plan outside of the political world – and keep it in congressional hands. The mechanism was, after all, initiated in Congress and signed into law by Obama. The Obama administration, meanwhile, has drawn some new – and interesting – lines in the sand.
The other day, Obama went public with his declaration after the super committee admitted their inability to come to agreement. His position was an emphatic “no!” on alternative measures – that the bed was made by the Republicans and now they have to deal with it. It’s tough but let’s let the big sequester begin and make the hard choices mechanically – in 2013. In the meantime, Obama’s Secretary of Defense, Leon Panetta, has gone public to demand Congress do something lest the sequester (when did that become a noun?) hollow out the US military so critically that it would have the lowest ship totals in generations, be unable to acquire needed weapons systems and also be unable to have the manpower to operate them anyway.
This represents something of a very clever squeeze play on the Republicans: this whole mess is now your problem – oh, and by the way, it makes you soft on defense because of your ideological stance. Literally as the writer was working on this article, this missive from an element of the Democratic Party arrived by email. In part it reads:
“The super committee negotiations have failed. Why? Because Republicans simply REFUSED to make billionaires and big corporations lift even one finger to help reduce the debt. In fact, they’re demanding TAX CUTS for their biggest benefactors, the top 1%.
“Instead, here’s who Republicans think should shoulder the burden: Seniors on Medicare. Middle class families who want to send their children to college. Every American receiving Social Security. The unemployed and all those who are suffering the most in this economy…
“We’ve ended up at this stalemate because these radicalised Republicans refuse to deal. If we don’t stand our ground now – and if we allow them to take the Senate in 2012 – we will lose our ability to stop them from unraveling our social safety net right out from under the Americans whose lives depend on it….”
And it sets out the case Democrats will be hammering home for a whole year – together with the now old standby: jobs, jobs, jobs.With the president’s personal popularity holding steady and his having pretty much having made his “bones” on security and defense (this backed up by polling data) after the draw down of troops in Iraq and Afghanistan, the dispatching of Osama bin Laden and other miscreants, as well as a reasonable approximation of success in Libya; if he gets just a little bit lucky, he may catch a break on the economy and squeeze into his second term. Meanwhile, Congress’ popularity and respect continues to mimic the support levels normally given to used car salesmen. Moreover, Republicans are still in the midst of a struggle to determine their champion: do they want to hold their noses and take a potential winner in the person of Mitt Romney, or go for the anti-Mitt in the way of a candidate suitable to the party’s right wing and its Tea Party partisans – but less likely to be successful in the general election. DM
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