Most of the postmortem analyses of the super-bust committee’s entirely predictable but nonetheless impressive crash-and-burn last week so far has mostly been nothing more than after-the-fact spin by the participants. Here’s what you actually need to know to understand what didn’t happen and why:
First, this never really was about reducing the deficit, so the fact that the anything-but-super committee didn’t succeed at doing that shouldn’t have surprised anyone.
The committee, the expedited legislative process that would have been used had it come up with something, the Nov. 23 deadline and the automatic spending cut if the process collapsed were all created so that House and Senate Republicans and Democrats could vote for an increase in the federal debt ceiling this past summer. At best, reducing the budget deficit would have been a bonus to getting past that impasse.
If you have any doubts about this, look at the parts of the agreement that have and haven’t worked.
The increase in the debt ceiling that was needed to avoid the cash crunch that was expected in early August took place as soon as the Budget Control Act was signed into law. No committee had to agree on anything for that to happen: It was automatic and immediate.
In addition, the process that is allowing the subsequent debt ceiling increases the Treasury says are needed has worked so well that the additional government borrowing that was such an inflammatory and hyperbolic issue then has become all but invisible now.
That’s a political success by virtually every standard.
In contrast, the deficit reduction procedures in the agreement either have already broken down completely or are likely to be substantially modified so that their effect is far less than was promised.
While the debt ceiling was increased instantly, the automatic spending cut was designed so that it wouldn’t go into effect until more than a year after the committee process failed.
That may be the best indication of all that deficit reduction was not anything close to the main purpose of the deal.
In addition, not only was the committee (I’ve run out of adjectives to say that “super” was and is wholly inappropriate) unable to agree on anything, but there are now more than just rumbles from Capitol Hill and demands from industries and voters that the automatic spending cuts be delayed, revised or completely canceled.
That should make you wonder why the Budget Control Act didn’t include a super-majority requirement for any changes in the sequester. If proposed balanced budget amendments to the Constitution include super-majority requirements to raise revenues, it’s more than curious why someone didn’t demand that more than a simple majority of both chambers be required to cancel or modify the spending cuts that would occur if the committee process failed.
All of this adds up to one conclusion: Now that the debt ceiling has been raised, the deficit reduction included in the deal to get the borrowing limit raised was —and still is — largely beside the point and could very well not happen.
Second, the committee’s failure demonstrated once and for all that the budget process is not the problem.
In fact, this process was almost exactly what many people have asked for over the years because it put a Base Closure and Realignment Commission-like procedure in place that would have eliminated the standard legislative juggernaut that, among other things, makes deficit reduction so much more difficult.
If the committee had been able to come up with something, it would have been considered quickly by Congress, no filibusters would have been possible and the only thing allowed would have been an up-or-down vote in both chambers. That’s as close to a BRAC-like process that is ever going to be available on the budget, and it didn’t change the outcome of the debate in the slightest.
This should be the ultimate lesson for all of those who say the federal budget problem would be solved if we just had a (check as many of the following as you think apply) line-item veto, balanced budget amendment, modern-day version of Gramm-Rudman-Hollings, tax increase limit, spending as a percent of gross domestic product limit, supermajority requirements for something or God knows what else. The super committee process didn’t fail because it was flawed but because there never was a consensus about what to do or how to do it.
Third, making the automatic spending cuts, which were triggered when the committee failed, part of the deal may have been a terrible mistake by those who were serious about deficit reduction.
Including a Plan B was probably needed to get the votes to pass the debt ceiling increase, but having the fallback in place actually made it easier for the committee to collapse. Indeed, in the immediate aftermath of its inability to agree on anything, some members of the committee and others in Congress said the process shouldn’t be seen as a failure because, thanks to the sequester, spending will be cut anyway.
The committee would have been under far more pressure to compromise if there had been no Plan B and its failure would have meant that absolutely nothing would have happened other than the debt ceiling being raised. No one would have been able to take any solace in a backup plan, and everyone on Capitol Hill would have had far more explaining to do to financial markets and constituents.
Stan Collender is a partner at Qorvis Communications and founder of the blog Capital Gains and Games. He is also the author of “The Guide to the Federal Budget.”