What happens if deficit super committee fails? Maybe nothing.
The latest rumor in Congress is that the massive $1.2 trillion in automatic cuts – designed to take effect if the deficit super committee fails to come up with its own plan – might never happen.
If the super committee fails, will there be any real consequences? Or will a future Congress take one look at the draconian automatic cuts set to take hold in 2013 – $600 billion to defense, $600 billion to entitlements – and say, no way.
That’s the latest rumor in Washington this week, as the 12-member joint deficit reduction committee struggles to find a $1.2 trillion package of cuts that can pass the panel and the Congress.
What if they fail – and nothing happens? After all, the automatic cuts kick in after the 2012 elections – when a new Congress will be in Washington. Will that Congress feel bound by the decisions of the previous Congress?
Speaker John Boehner (R) of Ohio told a roundtable of reporters Thursday that he feels morally bound to carry out the automatic cuts – known as the sequester option –should the super committee fail.
“Yes, I would feel bound by it,” he said. “It was part of the agreement. Either we succeed, or we’re in the sequester. The sequester is ugly. Why? Because we don’t want anybody to go there. That’s why we have to succeed.”
But some GOP colleagues have already signaled that they are not prepared to preside over what would be more than $1 trillion in defense spending cuts over 10 years – and will call to repeal the mandatory cuts.
“The sequester is an absolute national security disaster,” says Sen. Lindsey Graham (R) of South Carolina, a member of the Senate Armed Services Committee, who has pledged to replace it. “There will be virtually no support when the new Congress understands what it does.”
In fact, the practice of restoring defense cuts after first claiming them as part of deficit reduction has settled into habit on Capitol Hill. It’s common for lawmakers to vote defense cuts, for example, then restore them in a subsequent “emergency” spending package. Few labels are as fatal in congressional politics as the charge of being weak on defense.
“Everyone comes to the defense of defense,” says Julian Zelizer, a congressional historian at Princeton University in New Jersey.
A Congress elected on a pledge not to cut defense is not likely to enforce the cuts mandated by an outgoing Congress, he adds. “They’re setting up a political dynamic that will make it very difficult to go through with it.”
Another factor in this mix is how seriously lawmakers take the threat of sanctions from Wall Street and a downgrade from rating agencies, if Congress fails to fulfill its own plan to get the nation back on a sustainable fiscal path.
“Wall Street works off expectations, not events,” says Stan Collender, a longtime congressional budget analyst with Qorvis Communications in Washington. “I don’t think there’s any expectation that the super committee is going to succeed.”
“Allowing the cuts to be triggered doesn’t mean they will take effect immediately … not until 2013,” he adds. Members of Congress – and the candidates eager to replace them – "will have a year to talk about it going into the 2012 elections.”
On Wednesday, 100 House members – 60 Democrats and 40 Republicans – called on the super committee to “go big.” They want the committee to aim for at least $4 trillion in deficit reduction – the level that the president’s deficit reduction commission targeted as needed to get the nation’s fiscal house back in order.
“As the deadline approaches for the Joint Select Committee on Deficit Reduction, or the super committee, to propose major deficit reductions to Congress, many Americans don’t believe they can succeed,” said Reps. Mike Simpson (R) of Idaho and Heath Shuler (D) of North Carolina in a joint statement on Thursday. “Not only do we think they can succeed, but we don’t believe failure is an option.”
Members of Congress, both Democrats and Republicans, “are at a different place than they used to be,” Mr. Boehner told reporters at the roundtable. “I think they understand the gravity of the situation they face.”