The Super Committee is poised to fail after markets close on Monday — which is to say the 12 members weren’t able to agree on a package of new revenues and lower spending to reduce the deficit by at least $1.2 trillion over 10 years. That was their charge, and insofar as they didn’t do what they set out to do, they “failed.”
But if Republicans and Democrats keep failing to agree on this stuff for the next year and change, the result will be an extraordinary decrease in federal deficits — many multiples of what the Super Committee was tasked with finding.
We’ve been over this before, but the point is actually stronger now than it was earlier this year, because of the outcome of the debt limit fight. Between the looming expiration of the Bush tax cuts and other temporary tax provisions ($4.8 trillion), a large, scheduled drop in Medicare physician reimbursement rates ($300 billion), the soon-to-be triggered penalties for Super Committee failure ($1.2 trillion), and the resulting savings on servicing the national debt ($900 billion), deficits are set to drop by over $7 trillion automatically, unless Congress affirmatively stops it. That’s on top of the $1 trillion-plus dollars Congress banked in the debt ceiling fight.Here are the figures from the Center on Budget and Policy Priorities.
As you can see, the “do nothing” approach practically eliminates the deficit by mid-decade. Congress’ preferred approach of whining about the deficit but then voting to make deficits higher blows up the budget very fast.
Of course, there’s never been much of an appetite in Congress for letting these things happen. Republicans want to extend all the Bush tax cuts, Democrats want to extend most of them. Republicans and Democrats both want to protect Medicare doctors from a pay cut. And Republicans are already clamoring to repeal and replace the defense spending cuts in the Super Committee penalty.
In fairness, it would be bad policy to allow all of this stuff to happen, and to funnel all of the savings and revenue into reducing the deficit. But for all the agonizing members of both parties have been doing about the deficit, this is a helpful reminder that they really don’t care all that much about the deficit.