Tag Archives: supercommittee

Why The Failure Of The Supercommittee Is Not A Bad Thing

If media reports are correct, it appears that the congressional “supercommittee” will fail to reach its midnight Monday deadline to specify how it would trim at least $1.2 trillion from the budget deficit during the next decade.

This is probably a good thing.

(Technically, the committee has until Wednesday to reach agreement, but any plan has first to be on the table for 48 hours for review and to allow the Congressional Budget Office time to “score” the proposal.)  The immediate reason for the failure is that, in an election year, the purported cost of not reaching a deal pales in comparison to the political price both sides calculate they would pay at the polls come November if they actually negotiated a substantive compromise that really reduced the deficit.  Instead, both sides are gambling that they will be better positioned to negotiate a year from now.

In my view, this is a gamble worth taking.  What’s that, you say?  How can the decision to postpone a deficit reduction be good news? A bit of background is in order: you will recall that the 12-member bipartisan congressional committee was created as part of the negotiation that ended, at least for the moment, last summer’s debt default crisis. Under the agreement, the supercommittee, composed equally of six House Representatives and six Senators, was supposed to develop a deficit reduction plan by this Wednesday.  Assuming at least 7 of the 12 committee members agreed, that plan would then go to the full Congress to face a simple up-or-down majority vote in each chamber by December 23, with no option to amend the bill or filibuster it in the Senate. If Congress voted down the plan, automatic spending cuts totaling $1.2 trillion, divided equally between defense and non-defense programs, would kick in.  Crucially, however, those non-defense spending cuts would not touch the biggest budget busters: Social Security, Medicaid, food stamps and veterans’ benefits.  At the same time, there is a growing sentiment that deep cuts in defense spending are politically untenable at this moment.  Obama’s own defense secretary, Leon Panetta, has been quietly signaling the administration’s desire to renegotiate the defense budget targets.

And that’s why the plan was never likely to work.  Under the original agreement creating the supercommittee, the automatic deficit reduction plan would not kick in until January, 2013 – or until after the 2012 elections. Under that timetable, neither side really had any incentive to cut a deal, since they could avoid making hard choices and suffering the associated political costs until after facing the voters.  Remember, unlike during the debt default debate, a failure here triggers neither a government shutdown nor a debt default and a drop in the nation’s credit rating.  So, for most members it is easier to point fingers at the other side, knowing full well that the “automatic” procedures will then kick in to “force” across the board budget cuts that may be cuts in name only.  Each side can then play the blame game heading into November, and then use the election results as a referendum with which to replay the budget debate.

With hindsight, we should not be surprised that Congress’ effort to legislate by, in effect, tying their own hands, has not worked. Congress has a history of failed efforts to institute internal procedures designed to force them to pull the trigger on hard political choices that they were otherwise unwilling to undertake.  Think back, for example, to the Gramm-Rudman-Hollings (GHR) act Congress passed and Ronald Reagan signed into law in the 1980’s in order to curb burgeoning deficits.  The procedure, passed in 1986 and revised after a constitutional challenge in 1987, mandated across-the-board budget cuts (sequestration) if Congress and the President failed to reach agreement on budget reduction targets. For the first few years after passage Congress was able to jerry rig the deficit accounting process to avoid triggering the automatic cuts, but by 1990 when it appeared that no amount of creative bookkeeping could avoid sequestration, Congress instead negotiated a new budget agreement with President Bush that served as a crucial down payment on deficit reduction.  That ultimately led, when followed by the Clinton tax increases, to short-lived budget surpluses.  (Not incidentally, by breaking his no new taxes pledge, the 1990 budget agreement also was a significant factor in Bush’s defeat in 1992).

The point, and it is one that Newt Gingrich delights in making on the stump, is that no effort by Congress to make hard choices through automatic procedures is likely to succeed if Congress lacks the political will to enforce the agreement.  And in the case of the supercommittee, it is quite clear that both Democrats and Republicans would prefer, in an election year, to bear the political recriminations of failing to reach a deal over actually making difficult choices that would almost certainly alienate key elements in their respective political coalitions.  One needs only to turn on the television, and see the paid political advertising by groups like the AARP, which is threatening electoral retribution on any member of Congress who touches Medicare benefits, to understand why the supercommittee was only too glad to put off making difficult decisions.

My point here is not to say the parties negotiated in bad faith, or that the entire process was a charade. In fact, I think members in both parties hoped that they might get the other side to see it their way, at least enough to come to some type of agreement.  And, in truth, both sides were willing to make significant concessions.  Democrats agreed to make some budgets cuts, and Republicans did, if media leaks are to be believed, agree to some revenue increases, albeit primarily through changing the tax code. There were even reports that both sides had agreed on a plan to means-test Social Security benefits. But ultimately the ideological divide which undergirds Republican’s resistance to tax hikes and Democrat’s opposition to cuts in entitlement programs proved too big to bridge under the current political climate. No legislative procedure could overcome that political reality.

To be sure, both sides may yet negotiate a smaller face-saving agreement.  On Friday, Republicans reportedly floated a smaller $640 billion deficit reduction package that includes some revenue increases, and I wouldn’t be surprised to see Democrats leak their own mini-reduction package in response.  But I would be shocked if both sides suddenly agree to a plan that meets the $1.2 trillion target and avoids triggering the automatic cuts.

If, as I expect, the supercommittee fails to reach an agreement, both sides will engage in full-scale damage control and finger pointing, and the media will doubtless partake in another bout of handwringing about our “dysfunctional” Congress. But while that plays well with the public, I think it is probably the wrong message to take from the supercommittee’s failure. The debate over the budget is really a debate over political values and the future direction of the nation’s budgetary policy.  It is not a debate that should be resolved by legislative gimmicks that allow members of Congress to avoid making hard choices, and from being held accountable for those choices by the voters.  And, in fact, in the next several months legislators will face several more difficult decisions, including whether to extend unemployment benefits and whether to allow payroll tax cuts now in place to expire. In the meantime, legislators from both parties now have an opportunity to prepare their case in the run up to what is shaping up to be the most consequential national election in several decades.

There is no guarantee, of course, that the 2012 elections will send an unambiguous signal regarding how to address the nation’s budgetary woes. In the 2010 midterm elections, however, we saw how a grass-roots Tea Party movement rooted in opposition to government bailouts, increased spending and growing deficits produced one of the biggest partisan reversals in the post-World War II era.  More recently, similar anti-corporate sentiments spawned the “occupy Wall St.” movement which may yet develop into a potent electoral force.  Who knows how these sentiments will play out in 2012? With so much at stake, I’d rather take my chances with the electoral process than have members of Congress hide behind legislative gimmicks designed to provide political cover.

The supercommittee (apparently) has failed.  Let the real debate begin!

What Will The Super Committee Do?

With the membership of the congressional “super committee”  almost finalized, it’s worth asking:  Who do the members  represent?  The answer to that question may provide clues regarding how they plan on devising $1.5 trillion in deficit cuts by November.  One way to think about the answer is to draw on political science theory regarding congressional committees more generally.   That’s what I’ll do in this post.  First some background:

With yesterday’s announcement by Speaker John Boehner, the Republican membership on the joint House-Senate committee is finalized.  Boehner appointed Dave Camp (R-Mich.), Fred Upton (R-Mich.) and Jeb Hensarling (R-Texas) to the panel, where they will join Senate Minority Leader Mitch McConnell’s picks:  senators  Jon Kyl (R-Ariz.), Rob Portman (R-Ohio), and Pat Toomey (R-Pa.).  Their Democratic counterparts, as announced by Senate Majority Leader Harry Reid two days ago,  are  Max Baucus (D-Mont.), John Kerry (D-Mass.) and Patty Murray (D-Wash.).   House Minority leader Nancy Pelosi has until August 16 to announce the final three members of the committee.

 Under the terms of the debt agreement negotiated to end the debt impasse, this super committee has until Nov. 23 to deliver a deficit reduction proposal that has majority support among its members. Assuming it can do so, the committee’s proposal will then go to each chamber for an up-or-down vote by Christmas.  If the committee cannot achieve a majority, or if the full chambers do not approve them, automatic across-the-board spending cuts will be triggered – something most members in both parties do not want to see.

 So, what can we expect from this committee?  The answer depends in part on what you think motivates them. In this vein, political scientists have classified congressional committees as one of three types, according to what is the dominant interest driving committee members’ choices.  These (not necessarily mutually exclusive) categories are:

1. The Committee Autonomy View:  One view is that committee members are largely free agents whose decisions reflect their own individual electoral and policy preferences. From this perspective, committee members are not very responsive to the full chamber or to the party leadership.  Instead constituency and district influences are more important.

2. The Chamber Dominated Perspective:  In this view, committees primarily represent the interests of the full chamber in which they serve, and they use their policy and political expertise to help the full chamber craft effective policy.  That is, the committee members serves primarily in an informational capacity.

3. The Party Dominated Perspective:   The third view sees committee members as primarily responsive to their respective party.  Members pursue the party’s interest because they benefit electorally if the party is able to pass a partisan-based legislative program that enhances the party’s “brand name”.  For this reason the committee members will fight hard in committee for policies that the full party prefers

Before applying these analytic frameworks – individual, chamber or party – to predict what the supercommittee might do, a couple of caveats are in order. To begin, these three perspectives may be more useful for understanding House committees than their Senate counterparts.  Second, they are usually used to explain the motivations of members on  standing, or permanent, committees in a particular chamber.  As a joint committee, it’s not clear how relevant these models are to understanding the super committee.  Nonetheless, they at least offer an initial way of thinking about what is likely to motivate the nine members selected so far.  So, let’s see where they take us.

1. Senate Democrats. Baucus, Kerry and Murray are all liberal members of the Democratic Senate caucus who chair key Senate committees. Kerry heads Foreign Relations, and Baucus chairs the Finance Committee. Murray chairs the Democratic Senatorial Campaign Committee (DSCC) charged with furthering the electoral fortunes of Senate Democrats in 2012.  Based on Simon Jackman’s ideological rankings, Murray is the 9th most liberal member of the Senate, Kerry the 20th and Baucus the most moderate at 36. None of them is up for reelection earlier than 2014.  It seems clear that Reid expects these individuals to act on behalf of his leadership team, working for the electoral interests of Senate Democrats. That is, the party-dominated perspective is likely to best explain how they will approach the budget cutting exercise. Remember, Democrats are in grave danger of losing control of the Senate in 2012.  Note that Reid did not appoint any of the three Democrats – Dick Durbin, Kent Conrad, or Mark Warner – who were part of the Gang of Six whose deficit plan included significant entitlement reform. Although Baucus did serve last year on the president’s bipartisan fiscal commission, he opposed the compromise package authored by that panel.  So my expectation is that these individuals were chosen not so much for their budgetary expertise, but instead because  they carry political weight in the Senate, and their proposals are likely to receive party support.  Reid’s counting on them to protect Democrat’s political and policy interests.  My guess is that means the three will link any deficit reduction to an increase in taxes, and will likely resist entitlement reform that is linked to a reduction in benefits or a delay in eligibility.

2. Senate Republicans. In contrast to Reid’s uniform purpose, McConnell’s picks seem to reflect a range of motivations. While it is true that all three have pledged to oppose tax increases, they may be more amenable to tax reform if it is paired with ways to rein in entitlement costs. Toomey, a freshman Senator and former president of the conservative Club for Growth lobbying group, is the most conservative, ranking 9th in Jackman’s ideological rankings for conservatives in the Senate.  He’s on the committee, I think, to protect the interests of the tax cutting conservative wing of the Republican party. In contrast, Portman and Kyl are relatively liberal Republicans, ranking 32 and 41 on the conservative scale.  Kyl, as McConnell’s chief deputy, is the second ranking Republican in the Senate, and has already announced he will not seek reelection in 2012.  He will be the party leadership”s voice in deliberations, ensuring that what comes out will meet the party’s approval. Portman, like Toomey, is also a freshman Senator.  Note that before winning his Senate seat Portman served as OMB director under George W. Bush, so he brings a wealth of budget expertise to the table. Although he opposes tax hikes, he has expressed support for portions of the Gang of Six deficit reduction plan.  In some respects, then, he comes closest to playing an informational role.  Note that neither Toomey nor Portman is up for reelection in 2012, so none of the three Senate Republicans are going to be directly motivated by electoral concerns.

Bottom line?  It seems that McConnell’s picks illustrate all three motivations at work. I think Toomey and Portman may have some freedom to pursue personal preferences, although this autonomy may lead them in different directions during committee deliberations.  Toomey, as a Tea Party favorite, will be dead set against revenue hikes. But I expect Portman to be more open to some type of revenue enhancement linked to tax reform, in return for entitlement changes.   Kyl, meanwhile, will serve as elder statesman tasked with making sure the Republican Party’s broader interests are protected.  I think these three are more likely to go in different directions, and that at least some of them will be amenable to making a deal.

3. House Republicans. Boehner’s team is best viewed as an arm of the party leadership. All three appointees are veteran lawmakers. Significantly, none are members of the Tea Party caucus. Indeed Both Camp and Upton are among the more liberal Republicans in the House, and both chair important House committees – Camp heads Ways and Means, and Upton is chair of Energy and Commerce. So they bring some economic expertise to the table and they are responsive to the party leadership.  Hensarling, although much more conservative, heads the House Republican conference which basically administers the party caucus in that chamber and therefore is also tied closely to Boehner’s leadership team.  By cutting out the Tea Party caucus, Boehner is likely hoping his  team will come back with a proposal closer to the grand bargain he almost signed with President Obama.

So, where does that leave us?  The missing pieces of the puzzle are the three House members Pelosi will appoint.  My guess is that she will come back with three liberal appointees who will be responsive to her leadership, and who will be focused on protecting entitlement programs from significant cuts.  If so, that will make it harder for Democrats to compromise.

There are a couple of additional factors that complicate forecasting the committee’s deliberations.  First, there is significant pressure to make the committee’s deliberations “transparent”.  In my view, this is a mistake, because transparency makes it harder for committee members to make difficult choices. (Do you think we ever would have gotten a Constitution approved in Philadelphia if the delegates’ every move was scrutinized on the evening news and dissected in blog posts?)  So much depends on how deliberations are carried out.  Will there be a gag order imposed?

Committee members also have to anticipate how their choices will be received in their host chambers. In this respect, I think Republicans have more flexibility to give ground than do Democrats.  Keep in mind that this committee only needs a simple majority to vote out a proposal. If a majority can support a deficit reduction package that meets the $1.5 trillion target through a combination of deep spending cuts; entitlement reform that centers on some combination of benefit reductions, eligibility delays and – perhaps – means testing; and revenue enhancement based on the closing of tax loopholes and deductions, and reductions of subsidies, this might be enough for Boehner to push it through the House. He’ll likely lose some Tea Partiers, but he could pick up enough Democrats to get this passed, based on a coalition similar to the one that passed the debt default bill.

The Senate is dicier, in large part because Reid and his fellow Democrats are under tremendous electoral pressure to retain majority control in 2012, which militates against making hard choices. If Senate Democrats torpedo the super committee’s recommendations, then automatic cuts are supposed to kick in.  The problem with the automatic cuts is that they provide a semblance of political cover to Democrats who can say, “I tried to protect your benefits, but the Republicans played hardball and now the decision is out of my hands.”

These committee theories, then, provide one way of trying to frame what the supercommittee might do, but they leave a lot of wiggle room. At this point, my best guess is that we are in for a reprise of the debt default game of chicken, with both sides playing brinkmanship right up until the impending deadlines force them to choose.  I think there is room for a deal, however, along the lines of the “grand bargain” discussed by Boehner and Obama.   The biggest obstacle to that deal in committee, however, may be the Pelosi Democrats.  I’ll return to this topic when she makes her choices known.