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Designed  for deadlock

by A.B. Stoddard 08/03/11 11:06 PM ET

The American people were spared default by the federal government this week — but they were cruelly duped in the process.

Borrowing authority the Treasury needed to keep spending $4 billion more per day than it takes in was enacted Tuesday. In exchange for new debt, Congress passed $1 trillion of cuts and a promise — an old Washington device — that tough choices on curbing entitlement programs will come soon from a “supercommittee” because, well, negotiators couldn’t do it themselves.

{mosads}The markets, reacting to dismal economic data and the debt deal’s punt on fixing our structural debt, registered disturbing discontent. Our foreign creditors, namely the Chinese, snarled in disappointment, and an audible cheer could be heard from K Street as lobbyists prepared to protect their special interests and block hordes of cuts under consideration by what will turn out to be the “Super-Dupe Committee.”

This new Gang of 12 must find a path for deficit reduction by Thanksgiving, and if it doesn’t, across-the-board cuts that dig into Pentagon spending and Medicare will be adopted automatically. Both parties agreed to name three representatives from each party in each chamber in the next two weeks to succeed where Vice President Biden’s committee, the Bowles-Simpson commission and the Gang of Six all failed. Republican leaders have pledged not to name any members who would even entertain the idea of new taxes, and Democrats are expected to stack the panel with liberals who won’t budge on meaningful, money-saving changes to Medicare or Social Security, like means-testing or changes to the eligibility age.

The deadline is a clue to the deception. Congress returns from recess on Tuesday, Sept. 6. All current funding for the government runs out on Sept. 30, and Congress hasn’t passed any of the 13 appropriations bills that must be completed by Oct. 1, the start of fiscal 2012. That means another near-shutdown of the government one month from now — a new pitched battle lasting through mid-to-late October. When that ends, the Super Dupes will have roughly four to six weeks left until their deadline. Comprehensive tax or entitlement reform? Not enough time.

If the parties wanted a compromise, President Obama and House Speaker John Boehner (R-Ohio) would have found one. If both sides truly intended for the supercommittee to produce a deal instead of a dupe, they would have selected the other party’s membership for the panel. Democrats would have chosen Republicans like Gang of Six Sens. Saxby Chambliss (Ga.) and Tom Coburn (Okla.), who have agreed revenues must be paired with cuts to substantially reduce the deficit. Republicans would select pro-business Democrats like Gang of Six Sen. Mark Warner (Va.) and House Blue Dogs who vote against tax increases.

Alas, the supercommittee was designed to deadlock, and is merely a front for decisions the parties have already made. The trigger over which they fought so hard? It will be pulled. Republicans chose cuts to defense spending over new taxes and Democrats chose cuts to Medicare providers over reductions in Medicare benefits.

The ratings agencies warned that a deal to cut $4 trillion would only be a good start to averting an eventual downgrade of our bond rating, but negotiators didn’t come close. The stock market lost all its gains for 2011 in the longest string of low closings since 2008 this week because bleak economic news — a drop in consumer spending, worse-than-projected 1.3 percent growth and fears of continued high unemployment as the July jobs numbers are released this Friday — was compounded by the federal government once again refusing to truly attack its debt. Experts know the Super-Dupe Committee won’t change this equation, and a true fix is at least two years away.

Stoddard is an associate editor of The Hill.