COMMENTARY The congressional "supercommittee" is only six days away from a deadline to reach a deficit-reduction deal, leading top lawmakers to gird for another possible outcome: failure.
With Democrats and Republicans seemingly deadlocked over how to shrink the U.S. budget gap by at least $1.2 trillion over 10 years, House Speaker close tax loopholes, a "fair offer." Boehner added:
"Reforming the code is a step in the right direction. The details of how we get there frankly are yet to be worked out."
Those pesky details. Toomey would not only make permanent the preferential treatment of capital gains and other tax cuts passed during the George W. Bush administration -- it would lower those rates even more. That means foregoing some $800 billion in potential deficit savings that would come from allowing the Bush tax cuts to expire for wealthier households as scheduled at the end of 2012, according to the Center on Budget and Policy Priorities, a Washington think-tank. Most of the deficit-reduction under the proposal also would go toward bringing down taxes, requiring proportionally larger cuts to domestic discretionary spending.
Put another way, Toomey would make the deficit even bigger, preserve tax breaks for the rich while eliminating them for people of more modest income, and likely gouge Medicare and other social services that most Americans depend on. As a result, the plan is political poison to Democrats, who have soundly rejected it.
So why is Boehner backing a plan that is effectively dead in the water? Preemptive damage control. Chances are rising by the day that the supercommittee will fail, triggering $1.2 trillion in automatic cuts to a range of government programs and to defense. Democrats would correctly finger Republican intransigence as a major cause of that failure. But aligning behind Toomey's plan, no matter what its real impact on the deficit, allows Republicans to claim they made a good-faith effort to reach a deal with Democrats.
Another reason Boehner and other lawmakers are content to engage in political theatrics as the clock counts down -- they don't give a fig about cutting the deficit. But they do care about appearing to cut the deficit, something Americans say they want. As a result, the WSJ reports, both Republicans and Democrats are resorting to "accounting gimmicks" to help reach the $1.2 trillion savings target:
Some tools are familiar to old Washington hands, such as massaging budget assumptions and painting rosy economic scenarios. Others include taking credit for "saving" money on wars that are ending and putting off until next year what lawmakers don't want to deal with now.
All told, none of these efforts make the fundamental policy changes needed for a long-term budget fix. "Suddenly everyone is talking not about deficit reduction but deficit-reduction gimmicks," said Stanley Collender, a budget expert and former congressional aide.
It's not only the Republican leadership that is bracing for impact if the supercommittee fails. . After pointedly keeping his distance from the talks, he has recently raised the heat on panel members to reach a deal.
No surprise there, given the White House's interest in ensuring that Congress produces a sound fiscal plan. But Obama also faces political risks if the committee fails because he acceded to its creation as part of an August pact with Republicans to
In short, neither side will emerge unscathed if the impasse persists. So the game now in Washington is shifting from how Congress can reduce the deficit to how to avoid the blame when Congress strikes out.