Now that all 12 members of the “Joint Select Committee on Deficit Reduction” (also known as the “Super Committee”) have been chosen, it is time for Democrats to think about how to approach the Committee and its work.
The Super Committee was established by the Budget Control Act of 2011, which was the deal negotiated by the President and Congressional Republicans whereby the GOP agreed not to destroy the economy in exchange for several opportunities to inflict pain on U.S. citizens in the future.
There is little we can do for now about the caps on discretionary spending in the deal, which—if allowed to proceed—will cut non-security discretionary spending (R&D, education, infrastructure, and regulation) to the lowest level since the 1950s. For FY2012 alone, the caps ensure a budget cut of $30.5 billion, thereby reducing U.S. GDP by $43 billion (0.3%) and destroying 323,000 American jobs.
By taking a smart approach to the work of the Super Committee, however, Democrats can:
1) Make the case for additional government action to put Americans back to work;
2) Prevent additional self-inflicted wounds to the U.S. economy in the short-run; and
3) Set up a clear choice for voters in 2012, hopefully leading to Democrats retaking power and limiting long-run damage to the economy and country.
Mechanics of the Super Committee
According to the legislation, the goal of the Super Committee is to produce a proposal that will “reduce the deficit by at least $1.5 trillion between FY2012 and FY2021.” There are no restrictions on what is included in the proposal, however, which means non-deficit reducing, and even non-budget-related, legislation is entirely fair game.
The Members of the Super Committee are instructed to vote on whatever proposal they produce by November 23, 2011. The Super Committee is not required to release the language to the public until a vote is taken. If the proposal wins the approval of at least seven members, it is to be submitted to both houses of Congress by December 2nd. Each House is then required to report the bill by December 9th and vote on it by December 23rd. The Super Committee proposal will be fast-tracked, meaning no filibusters and no amendments—a clean up or down vote.
If the Super Committee fails to come up with a proposal by November 23rd, the proposal fails to win seven votes, Congress fails to pass the proposal, or the President vetoes the proposal, automatic cuts of $1.2 trillion are triggered. The cuts are spread evenly between defense and non-defense spending (including “entitlements,” although Medicare cuts are limited to 2%/yr) and are spread out over 9 years starting on—and this is very important to remember—January 2, 2013.
Democratic Strategy
The President, the Democratic Party, and their representatives on the Super Committee need to make it clear to the American people that they believe:
1. The jobs crisis is the most pressing economic issue that needs to be addressed and the government can take immediate action to put people back to work.
The stimulus saved millions of jobs, but was insufficient because the economy was contracting much faster than many anticipated. Given the ongoing jobs crisis, with over 16% of the country unemployed or underemployed, we need additional stimulus. We can borrow at historically low rates, and there is no shortage of proven ideas that can be enacted immediately to slow layoffs, put people back to work, and get the economy moving again.
2. The country has a long-term debt problem, but the best way to address the problem is to get our economy growing again and slowly phase in a mix of spending cuts and tax increases.
Our economic output is currently $900 billion per year below its potential due to a lack of demand. Not utilizing our full productive capacity has cost us $2.8 trillion since the recession began. By closing the gap between our current output and our economic potential, we will reduce the deficit. Stronger economic growth means more people paying taxes and fewer people relying on the social safety net.
Even assuming the economy improves, however, some actions need to be taken to reduce the long term budget shortfall. Just like past efforts to reduce the deficit, we will need to strike a balance between spending cuts and tax increases in order to get the situation under control. A balanced approach is the only way to achieve the savings needed without slashing the services Americans depend on and the investments needed for long-term economic growth.
3. Democrats are open to compromise, but we will not accept a plan that inflicts further pain on those that have been hurt most by the recession while protecting those that have benefited most from economic changes over the past three decades.
The typical middle class family has lost 23% of its wealth since the recession began. And even before the recession, middle class families were struggling with stagnant wages and reduced benefits. At the same time, the wealthy have benefited immensely in recent years. The top 1% take in 25% of the country's income and control 40% of its total wealth. The recession has accelerated this divergence, increasing inequality and further hollowing out the middle class. A deal that asks the suffering to sacrifice more while protecting the most well-to-do is simply unacceptable.
If the Republicans on the Super Committee agree to a balanced deal, fantastic. We may not get everything we want, but that is the essence of a compromise. If they do not, then, in Speaker Boehner’s words “so be it.” Democrats should allow the Super Committee to end without an agreement and take their argument to the American people.
On the 2012 campaign trail, the Democratic Party will be able to explain to voters that major, politically unpopular cuts to Social Security, Medicare, and defense are scheduled for January 2013 as a result of the absolute unwillingness of the GOP to compromise on anything. Democrats can campaign nationally around the idea that if the American people return them to power, they will put people back to work and enact a balanced deficit reduction plan that gets the budget under control while avoiding the economically-destructive and socially-irresponsible cuts pushed by the Republican Party. In doing so, the Democrats can frame the 2012 election as a stark choice between two very different Americas: a laissez-faire free-for-all where everyone is on their own or an America where those that play by the rules are assured a minimum level of economic security and a helping hand when they're down on their luck.
Outlook
Over the next several months there will be intense pressure on Democrats to accept whatever unbalanced piece of shit plan the GOP proposes. It will come from the press and probably from leaders and strategists within the Party itself. They will say stimulus is off the table because it’s a deficit committee, but in reality, there are no restrictions on the Super Committee’s actions, and short-term stimulus doesn’t preclude long-term deficit reduction. They will say that massive cuts will be triggered if a deal isn’t struck, but half of the cuts will come from the Pentagon and none of them will be enacted until January 2013. If the Democrats retake power in the 2012 elections, they will be able to avoid the cuts (through the filibuster-proof budget reconciliation process if necessary). If they do not, Republicans will enact their agenda. Either way, there is absolutely no reason to prematurely concede in the Fall of 2011.
While I hope Democratic Party leaders read this and agree, I’m not overly optimistic. It is up to us—politically engaged citizens—to make sure that we get the outcome we want. Most Americans know little about the Super Committee, and it probably won’t be their top concern during the holiday season. We need to make sure that our families, friends, and neighbors know that everything from road improvements to their Social Security benefits are on the line and that their leaders need to hear from them. It won’t be easy, and corporate money will likely line up against us, but, paraphrasing a few quotes from my political inspiration, "Politics is not just about power and money games, politics is what we do, politics is what we create, by what we work for, by what we hope for and what we dare to imagine."