WASHINGTON Nov 8 The 12 Democrats and
Republicans serving on a congressional "super committee" have
been wrangling for months over how to find at least $1.2
trillion in deficit reductions by a Nov. 23 deadline.
At the heart of the debate is a Democratic demand that
significant revenue increases be part of any 10-year deal --
something Republicans have been resisting. Without Republican
concessions on taxes, Democrats are not seen agreeing to the
kind of healthcare and retirement benefit program savings
Super committee failure would trigger $1.2 trillion in
spending cuts starting in 2013. But it could also rattle
financial markets already fretting about a lackluster U.S.
economy and Washington's ability to deal with fiscal affairs.
If the super committee members cannot close their
differences, voters -- already weary of Washington's bickering
-- could punish lawmakers in the 2012 elections.
Here are possible scenarios for how the committee could hit
the bullseye, get close to it or miss the target altogether.
This scenario is fuzzy, but it is one that regularly comes
up among budget and tax experts outside the government. They
give it strong odds.
Here is how it would work: The super committee, unable to
reach agreement on the $1.2 trillion in savings, agrees to some
savings -- say $500 billion to $800 billion over 10 years. Farm
subsidies and federal workers' pensions could get trimmed along
with other spending cuts and tiny revenue hikes.
The automatic spending cuts starting in 2013 could help
achieve the rest of the $1.2 trillion goal.
There could be a twist: In a move to give credit rating
agencies and investors confidence that Washington is determined
to fix the long-term fiscal mess, the super committee instructs
congressional committees to find more savings next year. That
likely would mean an attempt at broad tax reform.
It is unclear though how the super committee could force
the congressional committees to actually do the work.
THE FULL DEAL
The super committee finds a way to thread the needle and
get enough votes for a package that reduces deficits by $1.2
trillion over a decade.
Maybe it's a combination of more domestic spending cuts,
counting savings from upcoming troop withdrawals from Iraq and
Afghanistan and cutting federal pensions and agriculture
supports. Throw in savings from lower government interest
payments on debt and maybe even changing the way government
calculates cost-of-living increases for healthcare and
retirement benefits and the super committee might find itself
at the magic $1.2 trillion number.
Still unclear is whether some revenue increases would be
part of this formula. That's the most difficult part of the
A majority of committee members fail to agree on anything,
a scenario that is given even odds by some budget observers.
Here's why: Republican leaders have said no to tax hikes,
while President Barack Obama and his fellow Democrats have said
they won't allow major cuts to government retirement and
healthcare programs without tax increases.
The pessimists also argue that months of negotiations
between Congress and the White House earlier this year failed
and so there is no reason the super committee can close the
divide. They also point to the bickering that unfolded in
September over a routine spending measure to fund aid for
disaster victims and keep the government running temporarily.
The result: $1.2 trillion in spending cuts are
automatically triggered to begin on Jan. 1, 2013.
But 2013 is a long time away. In the meantime, voters will
go to the polls on Nov. 6, 2012, to pick a president and
members of Congress. Depending on who wins, there could be a
move to suspend or change the automatic spending cuts.
Some Republican senators already are crafting such
A ROBUST DEAL
Nobody sees it now, but sometimes the unexpected happens.
Under this scenario, the super committee surprises everybody,
and crafts a $3 trillion deficit-reduction deal that includes
Republican spending cuts and Democratic tax increases.
The panel writes into legislation comprehensive tax reform
and structural reforms to the Medicare and Medicaid healthcare
programs for the elderly, poor and disabled.
By Dec. 23, the full Congress approves the plan. Obama
signs it into law and heads into the election year as a
tight-fisted budget hawk. Republicans, including Tea Party
fiscal conservatives, boast that they have changed the culture
of Washington from spendthrift to miser.
This is the recipe ratings agencies are looking for. Over
the long run it could persuade Standard & Poor's to restore
Washington's AAA credit rating that was cut a notch in August
after a rancorous debate over raising the U.S. credit limit.
But it has nearly no chance of actually happening,
according to budget experts.
The Nov. 23 deadline for the super committee to finish its
work is written into law, not stone, and Congress can change
But moving the deadline faces serious problems: It looks
bad politically and there might not be enough support for an
extension to pass Congress as many lawmakers already resent the
extraordinary powers the super committee enjoys to advance
legislation without any opportunity to amend it.
A Democratic member of the committee, Representative Chris
Van Hollen, said this week the panel was not looking for more
time to strike a deal.