The supercommittee’s real failure

Yesterday, the congressional supercommittee announced that it failed to come to an agreement to reduce the deficit by at least $1.2 trillion over 10 years. The committee’s failure automatically triggers $1.2 trillion in cuts to domestic and defense spending starting in 2013, along with the expiration of the Bush tax cuts. The failure of the committee is no surprise to observers, given the failure of past commissions, negotiations, and various other initiatives. This is especially true since congressional Republicans continue to rule out reversing Bush-era tax cuts for high-income individuals, effectively insisting that the burden of deficit reduction be borne primarily by low- and moderate-income Americans.

The commission has not only failed to address medium-term deficits, but it has passed up an opportunity to address the immediate crisis: jobs. With unemployment and underemployment remaining high and job creation remaining weak, we cannot continue to let the wounds to the labor markets fester.

Looking forward, Congress needs to immediately turn to jobs. This means continuing emergency measures to boost consumer demand by extending support for unemployed workers and preserving tax cuts targeted to low-income taxpayers (by extending the payroll tax holiday or enacting a more targeted credit). It also means providing federal assistance to prevent further pullbacks by state and local governments. Finally, this means investing in America’s future by boosting infrastructure spending, supporting our children’s education, and creating work opportunities for all.

Congress can still address the jobs crisis, and should do so immediately.

From left, supercommittee members Sen. Max Baucus (D-Mont.), Rep. Rob Portman (R-Ohio), and Sen. John Kerry (D-Mass.). (Image from Flickr Creative Commons by sunlightfoundation)

  • Richard Bergen

    However, I am forced to ask the question “will congress act”. Washington is becoming so entrenched in partisanship that the only glimmer of hope is November 2012 or a miracle of christ like proportion. November 2012 is fast approaching. November 2012 will be one of the most expensive elections and the most important in recent history. The election will answer the question that congress has been unable, or unwilling to answer: is the American dream too great to fail?

  • CenTexDem

    Social security and medicare are non-discretionary spending programs funded solely with taxes earmarked for those programs.  Unfortunately, the bonds evidencing decades of deficit spending primarily under GOP administrations borrowed from our social security trust funds are coming due and the rich whose tax cuts and failure to help pay for Bush II’s unjust and unnecessary Iraqi War do not wish to pay the tax increases needed to pay for those bonds and their GOP henchmen seek to offset such need to pay by cutting future social security and medicare benefits.  If additional funding is needed to keep those programs solvent without cuts in benefits, then subject all types and levels of income to existing tax rates and as a last resort raise those tax rates. Both political parties need to otherwise leave those two basic social safety net programs alone intended to let the elderly who worked hard all their lives to make America rich live their last days in minimal dignity.

    Both political parties should be left to fight over wasteful and fraudulent defense budget spending which is more than half of the discretionary budget of the federal government and cutting the more than $500 billion in government welfare for the rich and big business in the form of subsidies and tax credits in order to provide needed income tax relief to consumer demand creating working families and job creating small businesses earning less than $100,000 in net income per year who already pay harshly regressive total taxes in the form of property, sales, franchise, excise, payroll, in addition to 20 to 30 percent income tax rates on those earnings needed for a basic decent standard of living. 

    Instead we see the GOP resist defense budget cuts and strive to destroy social security and medicare at all costs  We also see the GOP presidential candidates chose to march lock step in trying to reduce taxes paid by upper tier incomes and protect at all costs their income tax rates of only 15% on dividends, long term capital gains on non-productive legalized financial scams, and hedge fund manager earnings. 

    Time to see a Democratic super majority elected to both houses of Congress if we ever hope to see these economic injustices corrected and upper tier incomes paying their fair share of the sacrifices needed to eliminate the federal debt most of it created by GOP administration deficits, needless tax cuts for the rich, borrowing for needless wars, unfunded prescription drug benefits, and Federal Reserve almost zero interest loans to big banks with no strings attached like making mandatory  low interest job creation loans to small businesses. 

    Time to vote out every GOP incumbent so that the Congress is forced to cut the defense budget waste and fraud, government welfare for the rich and big business, and to return to the more progressive tax rates that remained after the first round of Reagan tax cuts.

  • Frunobulax718

    Jobs are gone for good; they’re not coming back. [When was the last time we had an ‘economic recovery’ that *wasn’t* jobless?] The coming robotics revolution (driven, as often the case with new technologies, by the military) later on this decade will exponentially accellerate that trend.Soon, there may be hundred of millions of Americans that are permanently unemployable. They’ll be poor, uneducated and miserable. And they’ll breed like flies.The problem is not jobs or the deficit. The problem is what are we going to do with all these people?

    Is it bread-&-circuses time in the American Empire? Or perhaps Great Pyramid-like construction projects? Maybe even a replay of the Irish famine?

    I have no idea what to do. But I sure hope someone does.

  • rodnacious

    Recovery, in and of itself, requires a new direction… areas of production that would improve our economy and create jobs that stay in America are:

    1.  Development of, and subsidizing of new sources of energy

    2.  Re-distribution of the available water sources to in crease production of grains, cattle, other sources of food for the world

    3.  Improvements to the Electrical grid, water systems, and gas lines are critical to safety and the efficient distribution of these utilities

    4.  The repair and on Interstate infrastructure and the bridges associated with that infrastructure is paramount – across these roads and bridge ride the commerce from our producers

    Were Congress to address these issues, the economy would respond in such a way that the need to make cuts to the budget would be eased by the increase in taxes brought on by the jobs created – Federal, State, and local taxes.

    • JWW

      I tend to agree, in principle, to most of these points.  I would add that, in order for these 4 items to successfully stimulate the economy even one-iota, the following must be part of the 4 step plan:

      1. Any and all contract letting be on a cost-competitive basis (do not discriminate as to who gets the jobs and contracts), and,

      2. All proposals for work and contracts be open for review by any American taxpayer who is interested (we have to trust our elected officials, and transparency is one gigantic step in the right direction…).  This review should be for allowed for all ongoing project work.

      American ingenuity, free enterprise, and even (dare I say) capitalism is how this country became so great.  The govt can have a great, important role in reversing the economy, but it will require a return to the things that everyone around the world agrees makes this country different, and superior, to all others.