Go Ahead, Pull the Trigger
Why the Super Committee should allow its automatic deficit-reduction mechanism to work.
History shows that Congress can't be trusted to control spending, much less cut it. Neither can the bipartisan committees it so often creates to reduce the deficit when Congress has failed. But what about automatic spending cuts scheduled to occur when the committee process inevitably fails? Sadly, they can't be entirely trusted either. But they might still be the best hope we have.
This summer's long-haggled debt deal called for the creation of a bipartisan "Super Committee" tasked with finding and recommending $1.2 trillion in deficit reduction over the next decade. The process itself was intended to be relatively speedy, at least by Washington standards. Recommendations were due by Thanksgiving, and Congress would be required to vote up or down by the end of the year. At least, that is, if the recommendations ever arrived.
It was a familiar ploy—designate a bipartisan committee to make tough decisions behind closed doors that legislators had proven otherwise unwilling to make, pat yourselves on the back for having taken action, then hope no one one notices when the committee fails to agree on savings. In fact, it was so familiar that Congress had to create a fallback mechanism designed to reassure people that it was serious this time.
That mechanism became known as a "trigger"—an automatic budget cut of about $1.1 trillion to a wide variety of spending programs, including Medicare and defense, set to take place automatically. These cuts, which are made through a process known as sequestration, in which previously authorized spending is withheld from agencies, are often referred to as "across-the-board-cuts." But as the Congressional Budget Office (CBO) points out, a number of major programs, including Social Security and Medicaid, are exempt from the cuts, and the trend has been to categorize more and more spending as protected over the years.
No one knows exactly what sort of cuts would come from a sequester. The CBO admits its estimates are imperfect because the actual process would be managed by the administration, which hasn't released detailed plans. The following chart, prepared by Mercatus Center Senior Research Fellow and Reason columnist Veronique de Rugy, shows what the cuts might look like:
Despite the steady wave of protections and carve outs, the hope is that the prospect of Medicare cuts will motivate Democrats to deal while potential defense spending reductions will put the fear of God—or at least Lockheed Martin—into Republicans.
Buried in this idea is the assumption that such reductions are somehow unthinkable. But these are hardly dramatic cuts. Some Democrats have cried foul about the potential Medicare cuts, but they're capped at 2 percent, which would barely make a dent in the program's rapidly growing spending.
Republicans, meanwhile, are up in arms about the fact that the biggest cuts would come from the defense budget. Earlier this month, GOP members of the House Armed Service Committee issued just a single, predictable recommendation to the deficit panel: Don't cut defense spending. "We've gone past cutting into the muscle. And if these other hits come from the trigger, if the super committee is not able to do their work, and the sequestration cuts in we're into the bone and it's all over," Armed Services Committee Chairman Howard McKeon said.
But the maximum total cut possible cut to the defense budget is about $850 billion by 2021. The effect would be to leave the United States responsible for 40 percent of total global military spending, while returning defense spending back to levels not seen since the dark days of…2007. Does anyone actually believe we were defenseless in 2007—or that we'd become so by capping defense spending at 2007 levels over the coming decade?
Even with the sequester, though, America may remain defenseless against endless spending increases. Republicans are already attempting to get the Super Committee to accept a troop drawdown—a now-classic budget gimmick that calls for the Congressional Budget Office to score overseas troop reductions that were already scheduled to occur—in place of actual defense cuts.
Nor is the history very reassuring. A similar attempt to reduce the deficit through sequestration in the 1980s failed to reach its budget targets. And as Stan Collender, author of The Guide to the Federal Budget, pointed out in August, budget deals don't have a very strong track record. Indeed, he notes, they have "always been changed, waived, ignored or abandoned long before they were scheduled to expire."
The ideal outcome from the Super Committee would be a deal to reduce spending even more than the sequestration process calls for. But with predictable gridlock between panel members over taxes and entitlements already setting in, that doesn't seem likely. Sequestration may not be perfect, but, even with its limitations, it's probably the best plausible result. So go ahead, Super Committee. Pull that trigger.
Peter Suderman is an associate editor at Reason magazine.