Something tells me the “supercommittee” may have been a bit too ambitiously named.
The supercommittee’s deadline to find a balanced package of spending cuts and tax hikes is this week, as per the terms set during the debt ceiling fiasco this summer.
I can’t see how this thing is going to play out but every reporter covering it is saying the two sides are moving further apart as we get to the deadline, not closer.
But we knew this would happen, right?
“It looks like a standoff,” said former Democratic U.S. Senator Byron Dorgan, who is now a lobbyist. “Nobody’s ever created a supercommittee where you have 523 members of Congress that are not involved and 12 who are working largely in secret,” he said. “It was generally a bad idea from the start.”
That’s from a Bloomberg story about the “widening rift” between the GOP and Dem representatives charged with finding a compromise. In other words, what we put off in August is back to haunt us again.
But maybe a failure of the Super Committee isn’t such a bad thing. Barry sent this my way yesterday, an opinion piece in the Washington Post by E.J. Dionne that explains how it could be good if both parties simply walk away without a deal:
Here is a surefire way to cut $7.1 trillion from the deficit over the next decade. Do nothing.
That’s right. If Congress simply fails to act between now and Jan. 1, 2013, the tax cuts passed under President George W. Bush expire, $1.2 trillion in additional budget cuts go through under the terms of last summer’s debt-ceiling deal, and a variety of other tax cuts also go away.
Now of course, where you stand politically will determine how you feel about that outcome.
But the more important question is: How will the market feel about that outcome? We may be about to find out.