Succeeding Through Failure

http://www.washingtonpost.com/opinio...y.html?hpid=z2
E.J. Dionne Jr.
Opinion Writer
How we can succeed through supercommittee’s ‘failure’

By E.J. Dionne Jr., Published: November 16

Here is a surefire way to cut $7.1 trillion from the deficit over the next decade. Do nothing.

That’s right. If Congress simply fails to act between now and Jan. 1, 2013, the tax cuts passed under President George W. Bush expire, $1.2 trillion in additional budget cuts go through under the terms of last summer’s debt-ceiling deal, and a variety of other tax cuts also go away.


Knowing this, are you still sure that a “failure” by the congressional supercommittee to reach a deal would be such a disaster?

In an ideal world, of course, reasonable members of Congress could agree to a balanced package of long-term spending cuts and tax increases to begin bringing the deficit down, coupled with short-term measures to boost the economy.


Continued by clicking on link at top of page

Fairly interesting concept. Maybe it is indeed better that they dont reach a decision.

http://www.washingtonpost.com/blogs/...g.html?hpid=z2
The Bush tax cuts are tripping up the supercommittee
Posted by Ezra Klein at 11:40 AM ET, 11/17/2011


(Center on Budget and Policy Priorities) On Wednesday night, Michael Steel, John Boehner’s spokesman, e-mailed reporters to quash talk that the supercommittee’s Democrats had presented Republicans with another counteroffer and that the ball was now in the GOP’s court.

“This particular conversation was a step backwards,” Steel wrote. “It would lock in the largest tax hike in history – at least $800 billion - and then add an additional $400 billion in job-killing tax hikes without pro-growth tax reform, plus more than $300 billion in ‘stimulus’ spending.”

Democrats were agog. There’s no $800 billion tax increase in their proposal, they said. Their plan calls for $400 billion in new revenues -- close to the levels Republicans had pitched earlier. When I circled back to Steel, he explained his note more clearly. “They now plan to extend the current tax rates?” He replied. “That’s big news!”


Whole article continues on link.

http://www.nytimes.com/2011/11/18/op...d.html?_r=1&hp

So the supercommittee will fail — and that’s good.

For one thing, history tells us that the Republican Party would renege on its side of any deal as soon as it got the chance. Remember, the U.S. fiscal outlook was pretty good in 2000, but, as soon as Republicans gained control of the White House, they squandered the surplus on tax cuts and unfunded wars. So any deal reached now would, in practice, be nothing more than a deal to slash Social Security and Medicare, with no lasting improvement in the deficit.

Also, any deal reached now would almost surely end up worsening the economic slump. Slashing spending while the economy is depressed destroys jobs, and it’s probably even counterproductive in terms of deficit reduction, since it leads to lower revenue both now and in the future. And current projections, like those of the Federal Reserve, suggest that the economy will remain depressed at least through 2014. Better to have no deal than a deal that imposes spending cuts in the next few years.

But don’t we eventually have to match spending and revenue? Yes, we do. But the decision about how to do that isn’t about accounting. It’s about fundamental values — and it’s a decision that should be made by voters, not by some committee that allegedly transcends the partisan divide.

Eventually, one side or the other of that divide will get the kind of popular mandate it needs to resolve our long-run budget issues. Until then, attempts to strike a Grand Bargain are fundamentally destructive. If the supercommittee fails, as expected, it will be time to celebrate.