On November 21, the Joint Select Committee on Deficit Reduction announced that it had failed to reach an agreement to cut the federal budget deficit by $1.2 trillion over the next ten years. As expected, the Super Committee failed because of the standoff between the Republican position of no new taxes on the wealthy and the Democrats' refusal to reduce spending on domestic programs and entitlements unless Republicans agreed to on new taxes. In the end, news media reported that Democrats wanted nearly $1 trillion in new taxes to make a deal. Some wonder if members of the Super Committee were ever serious about compromising their positions.
It seems inconceivable to me that the Super Committee could not reach a deal to reduce the deficit by at least $1.2 trillion over the next ten years. In a July 21, 2011 Insight, I noted that the “Gang of Six” U.S. Senators presented a new deficit reduction plan to members of the U.S. Senate. The plan sparked excitement and bipartisan enthusiasm that a deal to couple a deficit reduction plan with an increase in the debt ceiling could be worked out by the August 2, 2011 deadline. Senator Kent Conrad (D-ND) announced that the group’s plan would cut $3.7 trillion from the federal deficit over the next ten years. In general, the plan would have trimmed entitlements and other spending programs and raised more than $1 trillion in new revenues by reforming the tax code. The Gang of Six touted the $1 trillion of additional revenue raised from changes to the tax code as being a tax cut rather than a tax increase because the revenue would result from lowering tax rates, shrinking deductions and eliminating the Alternative Minimum Tax (AMT). A similar tax plan was presented by the Republicans to the Super Committee. In that same Insight, I also noted that Senator Tom Coburn (R-OK) had, one day prior to the Gang of Six announcing their plan, released his own $9 trillion deficit reduction plan in a report he titled “Back in Black.” Coburn’s 614-page report was the result of a critical review conducted on spending and duplication in thousands of federal programs. A summary of the savings projected in Coburn’s report by governmental agency is provided below:
Neither the “Gang of Six”, nor the Coburn plan appears to have been given serious consideration by the entire Super Committee. If the Super Committee had focused on just portions of Coburn’s roadmap of waste, fraud and duplications in the federal budget, savings of $1.2 trillion could have easily been realized. As Coburn’s report points out, special interest and politicians would have us believe any proposed savings resulting from reducing spending will unfairly harm the disadvantaged.
Thus, the U.S. debt and deficit stalemate continues, and what is even more disturbing, it appears that the expectation and acceptance of failure is a growing trend in the U.S.
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