The US government faces yet another looming budget deadline, this one barreling down on Congress and federal agencies with the added prospect that what some see as draconian cuts could kick in if lawmakers fail to act.
Officially, the congressional Joint Select Committee on Deficit Reduction, also known as the super committee, has until Nov. 23 to present its plan to Congress. Lawmakers in turn have until Dec. 23 to act on that plan. If they don't, the hammer falls, and $1.2 trillion in budget cuts will automatically happen in discretionary defense and nondefense spending through 2021 – no wiggling out this time. The biggest impact could be on the Pentagon.
In theory, at least, that stark possibility is supposed to get everybody’s attention, forcing a path to deficit and debt reduction.
But number crunchers for the nonpartisan Congressional Budget Office will need at least a couple of weeks to comb through whatever the super committee comes up with, pointed out Douglas Elmendorf, CBO director, in a super committee hearing Wednesday. That means the 12-member committee, split evenly between Democrats and Republicans, has to count its time frame in days, not weeks, Mr. Elmendorf implied.
Meanwhile, according to several press reports, party leaders in the House and Senate are acting behind the scenes to stimulate super committee action.
According to Politico.com, Senate majority leader Harry Reid has been reaching out to House Speaker John Boehner and Senate minority leader Mitch McConnell in a series of recent meetings that have included super committee co-chairs Sen. Patty Murray (D) of Washington and Rep. Jeb Hensarling (R) of Texas. And Speaker Boehner has met in his office with both House and Senate Republicans on the 12-member panel.
“I’m not going to tell you who exactly I have been meeting with,” Senator Murray told Politico. “But I will tell you I have been meeting with anybody who I believe will help us get to a deal at the end of the day.”
At the same time, at least some super committee Democrats are holding out for something like the sweeping “grand bargain” that President Obama and Boehner tried (and failed) to come up with last July as part of raising the federal debt limit.
Sen. Max Baucus (D) of Montana, who chairs the Senate Finance Committee, suggests cutting up to $3 trillion from the federal budget deficit over the next decade, roughly divided between spending reductions (including $500 billion from Medicare and Medicaid) and as much as $1.3 trillion in revenue increases, including some new taxes.
“The offer represents the thinking of Senate leaders and marks the first time either party has put numbers on paper in an effort to jump-start the talks,” The Washington Post reported Wednesday.
In his testimony Wednesday, Elmendorf pointed out that discretionary funding for 2011 includes $712 billion in defense spending and $566 billion for nondefense items, including education, energy, environment, and veterans’ benefits.
One point of discussion has been the military’s operation and maintenance budget (part of discretionary spending), which includes the wars winding down in Iraq and Afghanistan. The extent to which reducing those wars can be included as part of deficit reduction over the next decade is a matter of some dispute. Coincidentally, the amount of budget authority for US operations in Iraq and Afghanistan since the terrorist attacks of 2001 has totaled $1.2 trillion – the same amount that lawmakers are now trying to cut over the next 10 years.
In opening Wednesday’s super committee hearing, Murray said, “We have received input from our colleagues, standing House and Senate committees, groups from around the country, and close to 185,000 members of the public.”
“Nondefense discretionary spending represents less than one-fifth of total federal spending. But listening to the debates here in D.C. over the last few months – you would think this small piece of the pie was a whole lot bigger,” she said. “Congress has gone back to this relatively small pot with cuts and spending caps again and again – while leaving many other pieces of the budget essentially untouched.... All the focus on this one area is especially striking given that we are spending roughly the same on nondefense discretionary programs in 2011 as we did in 2001 – while mandatory programs have increased, defense spending has increased, and revenues have plummeted.”
For his part, co-chair Representative Hensarling pointed out what he sees as “the No.1 function of our federal government, and that is to protect us from all enemies, foreign and domestic, and specifically our national defense budget, which continues to shrink as a percentage of our economy, shrink as a percentage of our budget, as we continue to live in a dangerous world.”
Hensarling also noted that “as an order of magnitude, we know that the discretionary spending of our nation is roughly 40 percent and shrinking; our entitlement spending is roughly 60 percent of the budget and growing.”
In a nutshell, those statements sum up the super committee’s political challenge.