I asked readers if, despite each side’s rejection of the other’s opening proposals, there could be a supercommittee debt reduction deal and, if so, whether it would include tax hikes.
Chuck 02 thinks any deal won’t survive. “The supercommittee is all buffalo as nothing will take effect before it can be changed by future Congresses. Their will be a lot of posturing up to the deadline then a package of cuts including substantial cuts to defense. No new revenue, as neither side really wants to raise taxes and the Democrats will posture on the Republicans’ refusal. The defense cuts will be DOA and be reversed before they ever take effect. Net result will be business as usual.”
Pilsener doesn’t even think they will go through the motions: “No plan. Instead there will be an 11th hour re-working of ‘automatic cuts’ as part of a new continuing resolution that will take us to the end of January. Both sides will blame the other and . . . [hope] that the American public will not notice how incompetent incumbent . . . [congressmen] are. President Obama will express disappointment and proclaim his leadership in preventing a depression. Profiles in courage are in short supply inside-the-beltway.”
A few commenters thought a deal was possible and that the GOP will cave on tax increases. (Truthwillout: “There will be a plan, and it will have tax increases, as the GOP is now between a rock and a hard place. The rock is tax increases, the hard place is military cuts. The Dems are not on the horns of this dilemma, as they can live with military cuts — the GOP cannot. That, and the tide of public opinion is clearly moving in favor of increased tax rates for the wealthy.”)
I wish I could say I were optimistic that a deal to cut $1.2 trillion could be struck. But there no chance — none, zero, zip — the House Republicans will agree to a net tax increase. The very best we can hope for, I think, is a deal that cobbles together bits and pieces left over from summer debt-reduction talks, perhaps totaling $600 billion to $800 billion. Under the debt reduction, the remainder of the $1.2 trillion would be subject to sequester, half the cuts to come out of defense and half from non-defense. But, of course, if the GOP wins in 2012 and/or gets control of the Senate, the entire deal will be reworked.
We are a year away from the 2012 election. I anticipate virtually nothing will get done in Congress for the next year. Certainly, there will be no grand bargain.