Super Committee Fails to Reach Deal
Yesterday evening, the Joint Select Committee on Deficit Reduction announced its failure to reach an agreement. Rather than taking a long look in the mirror and trying to figure out solutions to the gridlock that has only begat failure, Democrats and Republicans alike are sniping at each other and castigating each other for failing to reach a deal to reduce the federal budget deficit by $1.2 trillion over the next decade. For the moment, though, continued gridlock on the part of Congressional leaders has done little but hurt the economic recovery. The Dow Jones Industrial Average plummeted yesterday at news of the continued impasse and is positioned to fall further still. This situation cries out for leadership from our elected officials, and instead all we’ve been given is a logjam.
The next steps are where things will get very interesting. The August deal between President Obama and Congressional Republicans to raise the debt ceiling created the Joint Select Committee as a means of achieving additional deficit reduction. As a backup plan, though, in case the committee was unable to reach a deal, the two parties agreed to automatic cuts of $1.2 trillion, split equally between defense and domestic spending–meaning that deficit reduction would happen in some form. Attention now has shifted to two sets of issues: Speculation exists that Members of Congress will soon try to change or eliminate the automatic cuts, especially the cuts slated for the defense budget. President Obama has promised to veto any attempts to undo the automatic cuts, saying, “There will be no easy off-ramps on this one.”
The other issue coming down the pike is whether Congress will extend unemployment insurance and the payroll tax cut, both of which are set to expire at the end of this year. It was hoped that extensions of these two programs would have been included in any deal reached by the Joint Select Committee, but now these issues will have to be considered by Congress in December.
Check back here often for more updates on these critical issues.
Photo courtesy of the Associated Press.