More than the curious “lead from behind” strategy often preferred by Barack Obama, an apt description of his efforts to steer the Super Committee to an acceptable conclusion would best be described as “in absentia.” Both Republicans and Democrats noted with disappointment the President’s absence in a challenge that was always thought to be difficult at best – even doomed, in the opinion of many experienced Congressional observers.
The morning after the announced failure by the committee members to reach a solution, Jay Carney was asked by a reporter if the President had bothered to talk with even one of the twelve Democrats and Republicans on the committee in the closing weeks of their effort. The only answer Carney offered was that Obama had “put forward a plan in mid-September” and by inference, that qualified as a sufficient leadership effort on his part.
The Obama plan that Carney referenced was his half-trillion dollars of immediate government spending coupled with $1.5 trillion of permanent tax increases. Even though the President addressed a joint session of Congress imploring them to “pass this bill” as well as the better part of a month flying coast-to-coast trying to generate support, to date only one small portion of Obama’s plan – a substantial tax credit incentive for employers to hire military veterans – has passed Congress. Even Congressional Democrats have been timid about supporting other provision of the plan, particularly the enormous tax increases.
The ideological divide between Republicans and Democrats was simply too great to just split the difference. Republicans believed it anathema to consider raising taxes, particularly in these most stressful economic times, and according to reports from committee members, the Democrats were “unwilling to agree to anything less than $1 trillion in tax hikes.”
Most everyone in the media is talking about the “failure” of the committee, and certainly Barack Obama has already started the blame-game against Republicans, and many on the GOP side have responded in kind. We’re not so sure, though, that the lack of a deal from the committee was all that bad. “A deal” is little assurance of a “good deal” – and, in this case, any compromise with the Democrats would have meant forsaking bedrock GOP principles. In addition, the $1.5 trillion in deficit reduction target given the committee represented but a fraction of the total magnitude of the fiscal mess that remains unresolved.
Fortunately, Republicans did not give in to demands for big tax increases. Real resolution to the challenges facing the economy and America’s fiscal crisis are not going to be resolved while the Democrats still have control of the Senate and Barack Obama is in the White House. Any hope for the consensus around the enormous decisions that must be made – and the will to support them – lies with the voters in an election still a year away.
While we share the concern expressed even by Obama’s Secretary of Defense, Leon Panetta, that further cuts to the military budget triggered by the inaction of the Super Committee could be “devastating” to our national security capabilities, members of Congress from both parties have vowed to correct that problem as have the leading GOP candidates to be our next President. Obama on the other hand has vowed to veto any legislation to lift the sequester – the automatic cuts.
While many are busy lamenting the “failure” of the committee and projecting dire consequences, some good analysis by reliable sources put the issue into a much more objective perspective. Phil Gramm, the former Senator and Presidential candidate and aficionado of the federal budget, calculated that even if the sequester is implemented, “total spending in 2013 would still be a whopping $3,582 billion—32% more than projected by the Congressional Budget Office in January 2007.” That’s a very significant date for two reasons: first, that’s a staggering difference from a CBO estimate just five years ago, and secondly because it is also the date that Nancy Pelosi took control of the nation’s checkbook as Speaker of the House. The spending binge and budget baseline increases implemented by the Congressional Democrats and Obama completely blew apart any semblance of fiscal discipline.
Likewise, Veronique de Rugy at George Mason University’s Mercatus Center graphed the with-and-without the sequester budget ramifications. As the following chart demonstrates, the difference is less than what Washington considers a rounding error these days. Spending between 2013 and 2021 will increase $1.6 trillion with the sequester, or $1.7 trillion without, which is hardly the draconian end-of-the-world-as-we-know-it scenario that has been painted by some.
The real work to get the federal fiscal house in order lies ahead, and whether it gets done will depend on the direction the voters steer the country with the elections in November, 2012. If voters really want to put government on a serious diet and implement sound economic policy again, they’ll keep a significant conservative majority in place in the House, elect a Republican Majority in the Senate, and change the occupant in the White House. If not, then America will continue the quest to out-Europe the Europeans, and we already have plenty of indications of how that story will end.