Superman! Faster than a speeding bullet! More powerful than a locomotive! Able to leap tall buildings in a single bound! Fighting a never-ending battle for truth, justice and the American Way!
He was Superman, and everyone knew that he would save the world.
Last August, Congress, unable to agree on how to reduce budget deficits, appointed a “Super Committee” to do the job. The idea was that 12 members of Congress, half Republicans and half Democrats, half from the Senate and half from the House, could craft a compromise that 535 Representatives and Senators could not.
World credit markets were so nervous when Congress almost forced the nation into a default that Congress passed a “lose-lose” law that included $1.2 trillion in automatic deficit savings so distasteful that it thought the Super Committee could finally make the tough choices.
This was real-life “Survivor,” like the TV shows where strangers stranded on an island form alliances to vote off others. In Survivor Congress, both Republicans and Democrats were confident that they could outwit, outplay and outlast the other side.
Had one member broken ranks and joined the other side, the consequences were dire. Sure defeat in next year’s election because all their political support and money would dry up instantly. Probable loss of both the White House and control of the Congress next year. The only hope was that all 12 suddenly and simultaneously become statesmen, setting aside their individual differences for the collective good of the country.
Despite the damage to the country, both parties were surely relieved when no one from their party broke ranks.
Who was kidding whom? The Super Committee hardly met.
Most communication was like fourth graders passing notes back and forth through others:
Sally’s note to George: Does Billy like Mary?
George’s note to Sally: Does Mary like him?
Sally’s note to George: I’ll ask her if you’ll tell me if Billy likes her
George’s note to Sally: Billy needs to know if Mary likes him first. By then, the bell rang, and class was over. Like Congress, Billy and Mary had short attention spans.
After three months of passing notes back and forth, the Super Committee finally quit. Its most difficult task was writing the note to tell the world that it quit. None of them was super enough to stand in front of the cameras with flags behind them and tell the world of its failure.
Their assignment wasn’t even that difficult. The super committee was charged with reducing budget deficits by $1.2 trillion over ten years beginning 2013. No pain this year or next.
Federal spending is approaching $4 trillion per year. So, $1.2 trillion out of $50 trillion, or more, over ten years should be doable. But, it wasn’t. Worse, they know that the real task is to close the budget gap by $4 trillion or more.
What will Congress do now? Nothing. Blame each other. Undo the $1.2 trillion in automatic cuts since no one liked them anyway. Posture for next year’s election. Watch its approval rating drop from its current 9 percent. (Isn’t that statistically the same as 0 percent?)
If the world economy weren’t in such a mess, a failure of this magnitude would probably have sent stock markets spiraling down and interest rates shooting up. Both are worse than tax increases since they reduce savings and raise prices on everything.
But, at this point in history, the U.S. economy is considered the “least of the terrible,” so money is flowing into the U.S., pushing short-term interest rates to virtually 0 percent.
Interest consumes 15 percent of the U.S. budget. If interest rates climb back to their 2006 level, the cost will be hundreds of billions a year, in fact, more than Super Committee’s $1.2 trillion target. If (when?) that happens, the only options will be steeper cuts to all federal spending programs, larger tax increases, or even more enormous borrowings to pay the cost of borrowing. The Super Committee simply lacked the courage to do the right thing.
Why was it called “super”? The only thing that was super was the extent of its failure.
Superman was everyone’s hero. He could fix anything. The Super Committee was by no means super.