The Incredible Shrinking Supercommittee

A couple of weeks ago, I had a conversation with a prominent--and not normally excessively optimistic--budget expert.  This person offered me two reasons to hope that the Supercommittee in charge of finding budget cuts would choose to go big rather than go home.


1.  They would be extraordinarily foolish to pass up this opportunity; the Supercommittee has a great deal of power to do things that are normally very difficult to accomplish.

2.  There had been no leaks; if the talks really weren't going anywhere, both sides would have been leaking like sieves.

I wanted to believe this very much.  Alas, they're now, well, leaking like sieves.  And they're leaking dueling proposals that seem very, very far apart:

House Speaker John Boehner (R-Ohio) on Thursday rejected a proposal by the Democratic members of the congressional supercommittee on deficit reduction, declaring its $1.3 trillion in tax increases unacceptable.

A majority of the six Democrats on the 12-member panel privately proposed a package that would cut the deficit by $3 trillion over 10 years, including more than $1 trillion in tax increases.

Boehner said in a press conference that the amount of new revenue was too high.

. . . Boehner made no mention of a counteroffer by Republican members of the panel, which aides said would cut the deficit by $2.2 trillion over a decade and include up to $640 billion in new revenue.

Some of this revenue is from increased user fees, and some is expected gains in tax revenue from an economy the GOP expects will improve from its reform of the tax code.

Spending cuts in the proposal include changes to Medicare, Medicaid and other healthcare entitlements, and $250 billion in discretionary spending cuts.

Democratic aides denounced the proposal as "unserious," although Van Hollen declined to comment on it.

We're still where we were six months ago: Democrats are determined to have substantial tax increases, and the GOP is determined not to.


The good news for budget hawks is that there will still be some movement because if the Supercommittee doesn't come to a deal, then automatic cuts will be triggered.  For libertarians, this actually looks like a very pleasing prospect.

The bad news is that $1.2 trillion is hardly enough to address our future budget problems, and there's no indication that there's any hope of a bigger deal.

The only hope is that one way or another 2012 settles things, and both parties get down to the business of legislating.  But I'm not exactly optimistic that this will happen.
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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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