The Super Committee's failure to reach a deficit-reduction deal leaves a host of problems in its wake, including the expiration of tax breaks and unemployment benefits and tremors of uncertainty in the stock market. While failing to tackle the nation's long-term deficit was its chief failing, here's who else is affected by the committee's collapse:
Markets U.S. stocks were the first to take a hit on news this morning that the committee will likely declare defeat this afternoon. Stocks plunged with the Dow Jones industrial average falling more than 250 points and the S&P 500 dipping 2.2 percent. On top of the major indices, Bloomberg reports that "The 10-year yield fell six basis points to 1.96 percent at 9:13 a.m. ... The benchmark Stoxx Europe 600 Index lost 1.9 percent, extending last week’s sell off, and the MSCI Asia Pacific Index dropped 1.5 percent."
Middle class Another issue that has now been tabled is the extension of payroll tax cuts and jobless benefits for millions of Americans. The Super Committee was expected to include these priorities in an agreement but now it's up to Congress and that may prove difficult because the extension would increase the debt by at least $160 billion. As the AP reports, these aren't unsubstantial policy decisions. "The 2 percent payroll tax cut expiring in December gave 121 million families a tax cut averaging $934 last year at a total cost of about $120 billion, according to the Tax Policy Center ... Letting extended jobless assistance expire would mean that more than 6 million people would lose benefits averaging $296 a week next year, with 1.8 million cut off within a month."
Doctors In the absence of an agreement, doctors will start taking a 27.4 percent cut in Medicare payments from the federal government, which could hurt doctors' bottom lines and also Medicare patients' ability to easily get service starting January 1. As Reuters reports, it's up to Congress to step in now. "Congress has routinely pushed back a planned cut to doctors and hospitals who accept patients under the Medicare health program for the elderly, and will have to do so again at the end of this year, a move that has happened so many times it is known as the 'doc fix' on Capitol Hill."
Corporations According to Reuters "Corporations are anxious about business credits expiring on December 31, such as one for research and development ... Businesses are set to lose 'bonus' depreciation tax write-offs for new purchases, and the tax credit for research." This was another deal that seemed to be fairly uncontroversial. "Making the research credit permanent is an idea with bipartisan support in Congress and from the Obama administration."