The Supercommittee's Worst-Case Scenario

Caught between the untenable and the unlikable, a dozen members of Congress face the prospect of throwing Washington into chaos

Baucus supercommittee - J Scott Applewhite AP - banner.jpg

As a symbol of government dysfunction, the deficit supercommittee has succeeded gloriously.

Its basic premise, which arose from the summer's debt-limit stalemate, is that President Obama and congressional leaders could only agree on the fact that they could not agree. We can't decide what to do about deficits, they said, so let's make these other guys decide later. As solutions go, it wasn't one.

It's easy (and fun!) to look on the supercommittee cynically, but the idea could in theory actually work. If the six Republicans and six Democrats can agree on a plan, the supercommittee will look like a brilliant instance of managerial delegation.

That's what all hope for. The other possibility, of course, is that the supercommittee will fail, just as the process that preceded it did.

If it does, what form might that failure take -- and what will the policy and political consequences be?

The Somewhat Bad Scenario Many Would Like to Avoid: "Sequestration"

"Sequestration" is kind of an ugly word, despite its resemblance to "Sea Quest." Fitting, then, that it's what will happen if the supercommittee can't agree on a deficit-reduction plan.

What it means: If the committee can't agree on an approach by the Thanksgiving Holiday, that failure would automatically trigger an across-the-board cutting process to eliminate $1.2 trillion. This would seem like something deficit-reducing GOP House members could get behind, but remember -- these would be across-the-board cuts and would dig into defense funding that the GOP wants to preserve as well. The whole concept of sequestration was designed to encourage the committee to reach agreement or face consequences neither party likes.

Here's how it could go down: The committee has until Nov. 23 to approve a plan that reduces the deficit by at least $1.2 trillion over 10 years. Right now it's still up to the panel members how they do it: Cut spending or raise taxes -- it's their choice. If they can't agree on a plan, sequestration automatically follows by law.

The cutting would be mandated and automatic, with little flexibility. Some programs would be exempt -- Medicaid, Social Security, food stamps, the Children's Health Insurance Program, the Earned Income Tax Credit, veterans' benefits, and federal retirement, for instance -- but some defense programs like war funding would take a 9-percent hit, compared to current spending levels.

Here's how the independent Center for Budget and Policy Priorities (CBPP) breaks down the cuts:

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It's unclear which programs would get cut the most: The Budget Control Act, which created the supercommittee and delineated the cuts outlined above, does not specify which individual programs will lose money -- only which agencies. The administration and congressional appropriators will have to figure it out.

Medicare might be the ugliest area of cutting: It would take the biggest hit of any mandatory, nondefense spending program, according to the CBO, although about 10 percent of Medicare would be exempt from cuts, while the remaining 90 percent would be limited to 2 percent in yearly spending reductions. So says the CBO:

The CBO estimates that mandatory spending will account for roughly 58 percent of all nondefense spending that would be subject to enforcement procedures under the Budget Control Act during those nine years. Of that nonexempt mandatory spending, the vast majority is for Medicare programs and activities that would be subject to the 2 percent limit. In the absence of such a limit, reductions in budgetary resources for Medicare would total $256 billion between 2013 and 2021, CBO estimates; with the 2 percent ceiling, however, such reductions would total $123 billion over that period.

There's a silver lining for Medicare recipients, in that premiums would drop for Medicare Part B (medical coverage), costing the government $31 billion through 2021.

Farm subsidies would take a big hit. CBPP says they, not Medicare, would see the worst of it: "About $5.2 billion in cuts in the other mandatory programs that are subject to sequestration, the biggest of which is farm price supports," the group writes. The war-funding cuts outlined in CBPP's chart would, undoubtedly, make some people nervous.

Bottom line: Should sequestration happen, get ready for an algae-bloom of stories about what appropriators and the administration would consider cutting. Other than Medicare, major vital programs for vulnerable constituents would be protected, but we'd read stories every day about education grants and the like getting the axe.

Presented by

Chris Good is a political reporter for ABC News. He was previously an associate editor at The Atlantic and a reporter for The Hill.

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