Supercommittee is Over: Punishment Phase Begins

Bob Englehart, The Hartford Courant

During a town hall meeting in Ottumwa, Iowa Friday afternoon, Rick Santorum argued that Americans receive too many government benefits and ought to “suffer” in the Christian tradition. If “you’re lower income, you can qualify for Medicaid, you can qualify for food stamps, you can qualify for housing assistance,” Santorum complained, before adding, “suffering is part of life and it’s not a bad thing, it is an essential thing in life.” …Think Progress

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So, Democrats would give up $542 billion in spending cuts and Republicans would give up $3 billion in revenue — not a penny of which would come from additional taxes on anyone, but rather, the end of a tax break currently enjoyed by corporate jet owners.

This, in the minds of GOP committee members, is a “compromise.”

Rep. James Clyburn (S.C.), a House Democratic leader and a super-committee member, told The Hill after hearing the GOP offer, “Do we look stupid?”

Republicans should take that as a “no” to the offer.

This is, by the way, the final weekend before the debt panel is supposed to finish its work. The committee is so far apart that no meetings have even been planned, and no one thinks success is even a possibility. …Steve Benen, Washington Monthly

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The congressional committee tasked with reducing the federal deficit is poised to admit defeat as soon as Monday. …WaPo

The Washington Post declares this morning that the supercommittee is, effectively, dead.

… Neither side was predicting a last-minute breakthrough. Instead, seven panel members booked appearances on the Sunday talk shows, as both sides readied their best arguments for why the other is at fault. …WaPo

You may still see slight signs of hot breath if you hold a mirror to the committee’s face, but here’s the thing:

Although the official deadline is midnight Wednesday, the committee is legally barred from voting on any plan that was not made public at least 48 hours in advance. …WaPo

Among the eye-catching results will be the virtually automatic extension of tax breaks.

Many of the breaks are designed to benefit narrow home-state interests, such as NASCAR racetracks, racehorse breeders and ethanol producers. Those are precisely the sorts of provisions that have been excoriated throughout this year’s debate over the debt. …WaPo

Steve Ellis is the spokesperson for a “watchdog,” non-partisan “Taxpayers for Common Sense.”

Said Ellis: “To have gone through this whole wailing and rending of garments and gnashing of teeth that the supercommittee process has elicited and then to turn around and increase the deficit by extending a bunch of tax breaks — many of which are for special interests — would just look terrible.”

Maybe next year they’ll do something about it?

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Economists are warning of dire consequences if US politicians fail to make progress this weekend in tense talks aimed at reducing America’s massive deficit ahead of a Wednesday deadline. …

…Failure to reach an agreement on what is essentially a small reduction on the deficit – just 0.7% of gross domestic product in 2013 – could trigger another rating’s agency downgrade, warned economists including Paul Ashworth, chief North American economist at Capital Economics.

“With all this pressure to reach an agreement, it really doesn’t look good if they can’t find a solution,” said Ashworth. …

…Ratings agency Standard & Poor’s cited the “extremely difficult” political conditions in Washington when it made the controversial decision to downgrade its rating on US debt in August. The firm also put the US “on watch’ implying further cuts could come. …Stock markets are already under pressure from the credit crisis now sweeping Europe and further signals of a lack of leadership in the US could have negative consequences for the markets… The Guardian

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The Hill sees it in simple terms.

There are various possible endings to the supercommittee drama, though the most likely is a partisan, crash-and-burn failure.

The congressional panel on debt reduction is expected to flop, as Republicans refuse to break from Grover Norquist’s tax pledge and Democrats are adamant they won’t cave like President Obama did in prior high-profile negotiations with the GOP. …The Hill

Best possibility:

1. Supercommittee members offer competing partisan plans that are voted down.

If the panel cannot come up with any bipartisan savings, it will spark negative headlines and mockery by the late-night talk-show hosts.

Earlier this month, Rep. Xavier Becerra (D-Calif.), a supercommittee member, said a $4 trillion deal was possible. On Friday, he tried to make the case that sequestration would not constitute failure. That spin is telling, along with a prediction last week by Sen. Charles Schumer (D-N.Y.) that the supercommittee will fall short.

The law states that supercommittee members must have a Congressional Budget Office score of a plan 48 hours before a final panel vote. Because of the Wednesday deadline, a CBO score must be available late Monday night. But there is a good chance CBO will be producing two scores on separate plans. There is growing chatter that Democrats and Republicans will offer separate plans at next week’s meeting, pointing the fingers at the other side of the aisle and playing 2012 election politics.

Chances: 80 percent. ...The Hill

Cross posted from the blog Prairie Weather.