Supercommission Fail?
Don't count on the debt-deal supercommittee's ability to pare back the deficit—or the backup reductions that are supposed to kick in if the committee fails to cast a sufficiently powerful deficit reduction spell. Via Bloomberg:
Congress may undermine the deal that raised the U.S. debt ceiling by failing to agree on a plan to curb the deficit and then softening the impact of automatic spending cuts that would kick in to achieve the budget targets.
That's the view of five former directors of the Congressional Budget Office. Lawmakers on a new committee charged with deciding on a budget plan will struggle to reach an accord, even as the Standard & Poor's decision to downgrade U.S. debt heightens pressure on the panel, some of the ex-CBO chiefs say. And while the backup mechanism for across-the-board cuts may be the best compromise for a divided Congress, it's a flawed device with a history of failure, they say.
…While the cuts are supposed to be automatic, Congress can delay or override them if they prove too painful -- defense spending would be reduced by 9.1 percent over a decade while non-defense programs would be cut 7.9 percent. That's what lawmakers did with the 1985 Gramm-Rudman-Hollings Balanced Budget Act, the template for the trigger.
I noted the committee process's history of failure here. More on the failure of Gramm-Rudman-Hollings here.
