Why the Super Committee Deadlock Is a Victory, Not a Failure

November 23, 2011

It now appears the Joint Select Committee on Deficit Reduction (the “Super Committee”) will deadlock, resulting in automatic spending cuts of $1.2 trillion over the next 10 years. Some are decrying this as a failure; I’m celebrating it as a victory. Clearly, much more must be done to cut federal spending and avert a fiscal crisis. But real spending cuts were never on the table. What was on the table was a disastrous tax hike that would have undermined our economic recovery and given Washington politicians even more money to spend, undermining the goal of cutting spending.

Republican House Leadership reportedly offered as much as $640B in tax hikes in the negotiations, contrary to political posturing from Democrats that Republicans were anti-tax absolutists (which they should have been). Even Senator Pat Toomey and Representative Jeb Hensarling, the most conservative members of the panel, offered $300 billion in net tax hikes, offering to do much more than “pay for” an extension of the Bush tax cuts with an itemized deduction phase-out that would have, among other things, limited the deductibility of charitable contributions and home mortgage interest.

The only thing that protected the American people from a large and extremely poorly-timed tax hike was Democrats’ unending hunger for more of our money. They rejected the big tax hikes the Republicans offered because they wanted even bigger tax hikes.

Democrats never intended to do anything about the spending problem. In fact, they insisted on tax hikes of more than the $1.2 trillion deficit reduction mandate so they could increase spending by funding the president’s latest stimulus proposal.

Considering what the offer was on the table, news out of the Super Committee that they won’t report a package is a huge success.
Although it is not nearly enough to solve the impending fiscal disaster, the sequester mechanism is a Washington spending cut, or more precisely a reduction in expected spending increases. It is not the doomsday scenario some on the left (and even some on the right) claim. As economist Dan Mitchell of the Cato Institute has explained, spending will still increase every year under the sequester (although more slowly), including increases in defense spending.

In the end, Democratic intransigence made clear that the only option to even modestly reduce the runaway growth of federal spending was to deadlock and trigger sequestration. Under the circumstances, we should celebrate the outcome. But not for very long, because there is much more work to do to cut federal spending and we need to keep the pressure on.

By Phil Kerpen, AFP Vice President for Policy

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