All signs point to empty political posturing without real solutions. And that was always the expected outcome.
The super committee, set up after the debt limit debacle in early August, is due to report on November 23. This report is supposed to tell us how Congress will meet its self-inflicted requirement to reduce future deficits and the growth of the country’s debt by at least $1.1 trillion over the next 10 years. If this goal is not met, then automatic cuts — called sequestrations — will go into effect, divided equally between domestic and defense expenditures. This report was actually due to the Congressional Budget Office well before now so that the CBO could score the proposals. But if you knew anything about congressional negotiating, you knew that would never happen; it was always doomed to be strung out until the last minute.
So what’s the report going to propose? Here is my handicapping of possible outcomes with commentary to follow:
1) Chances of a breakthrough and a major deal: 0 percent. There was never any chance of this. No member of the committee has anything close to the clout needed to move his or her party toward any kind of real deal.
2) Chances of a failure and the ensuing sequestration: 10 percent. This would be an awful result for the committee members and for Congress as a whole. I know that there is great pressure on the committee to avoid a failure. Embedded in my 10 percent estimate is some small chance of a modified failure, such as a decision to delay the report. But I cannot imagine the committee wants to prolong this agony.
3) Chances of a “kick the can down the road” minimum proposal filled to the brim with fake cuts, empty allocations, and meaningless two-step processes: 90 percent. The report will propose approximately $1 more than the absolute minimum combined with a maximum degree of fakery.
To describe the “kick the can” option more completely: it will include a) a very small total of real deficit or debt reduction; b) maximum possible use of fake changes — for example, counting currently planned troop reductions as defense cuts; c) broad, empty allocations — other committees will be instructed to make cuts in very broadly specified areas (so no one is guilty of any actual reduction); d) I hear there is some chance of the return of an oldie but goodie — the general fraud, waste, and abuse reduction; and e) a new maneuver — the revenue increase two-step, by which a (small) revenue increase is stated with the actual tax changes assigned to the tax committees to decide upon next year.
One can be disappointed, but certainly not surprised. This super committee was, from its beginning, intended to produce this result. It is the Congressional version of the joke about the train car load of 10-year-old canned sardines: intended for trading, not for eating. Creating this committee was solely the way to get out of the debt limit/deficit debacle Congress created for itself. Yes, lots of people played their expected roles and presented to the committee. But no one who knows the town ever thought we would be any where else but right here.
The committee’s report will then immediately become the vehicle for a much more satisfactory game of finger pointing, which will set an appropriate tone for the presidential campaign we are headed into. Some of the truest words ever spoken about pro football also apply to politics: Blain Francis Nye, Stanford graduate and tackle for the Dallas Cowboys, is credited with observing, “It’s not who wins or loses, but who gets the blame.”
But, to end on a positive note, there is some modest chance that events might force both sides toward a grand bargain immediately after the presidential elections in the period between November and Inauguration Day in January. No matter who wins, there is going to be a high sense of urgency to get this issue at least partially out of the way.
Roosevelt Institute Senior Fellow Bo Cutter is formerly a managing partner of Warburg Pincus, a major global private equity firm. Recently, he served as the leader of President Obama’s Office of Management and Budget (OMB) transition team. He has also served in senior roles in the White Houses of two Democratic presidents.