Stephen Reader covers politics for It's a Free Country, WNYC's interactive politics site. He joined the station in 2010 and has also worked for Studio 360, WNYC's Peabody Award-winning show about art, culture, and creativity.
Super Committee Struggles: What $1.2 Trillion in Cuts Looks Like
Wednesday, November 16, 2011
Should the deficit reduction super committee fail to cut at least $1.2 trillion in spending, a trigger will do it for them, taking an axe to defense spending while largely sparing entitlement programs.
The Budget Control Act of 2011, signed into law by President Obama in August, created the bipartisan super committee and charged it with reducing the deficit by at least $1.2 trillion and gave it a deadline of November 23rd. But it also stipulated consequences in the event that the committee could not reach an agreement: across-the-board spending cuts that were proportionate with the size of each government agency and program. The deficit would be reduced by any means necessary, and regardless of operator malfunction.
The trigger would enact about $110 billion from the federal budget every year for the next ten years, half of which ($54 billion) falling on spending designated "security" alone. That means that the Department of Defense would be the single biggest victim of the super committee's dithering. (The Department of Homeland Security, Veterans Affairs, and international affairs would shift to become classified as "non-security" spending in the event of a trigger, giving them greater protection from cuts.) There is, however, a protective loophole for funding wars in Iraq and Afghanistan, as well as "emergency spending."
The other $54 billion in annual spending reduction would come from non-security expenditures, but the trigger would shield Social Security and Medicaid from cuts, and it would cap Medicare's spending reduction at two for a fiscal year.
(These projections assume that the super committee doesn't offer any plan for deficit reduction. Should the committee come up with a portion of the prescribed reduction—say, only $600 billion—the difference between that figure and $1.2 trillion would be made up by the trigger.)
Given that defense has the most to lose from triggered cuts, and proponents of the social safety net can rest relatively easy, Republicans should be more wary of super committee failure than Democrats. Taking Social Security and Medicaid out of the picture and cushioning the blow to Medicare is a boon for the Left and an ironic pitfall for the Right; the GOP's refusal to raise taxes may translate into unintended austerity for their favored programs and a lost shot at reining in entitlement spending. Indeed, the Office of Management and Budget estimates that over the next ten years, the cap on non-security spending would rise by about $200 billion while the cap on security spending would fall by about $100 billion. (Cutting spending by $1.2 trillion means cutting from baseline projections of what spending would be otherwise, not a pure reduction necessarily, hence the net rise in the discretionary spending cap envisioned by OMB.)
There's an interesting dichotomy at play here: the trigger is subject to rules and constraints that the super committee isn't. That is, while the trigger can't touch Social Security or Medicaid and mandates that half of all cuts come from defense, the super committee faces no such restrictions. The super committee could leave defense alone if it likes and rejigger entitlement programs as it saw fit, however unlikely that scenario is. OMB Watch, a nonprofit organization that published its own "Debt Ceiling FAQ", notes that "more programs could be on the chopping block through super committee deficit reduction than through triggered, across-the-board cuts."
Triggered cuts would begin in 2013, and when that happens "across-the-board cuts" would be at a 7.9 percent rate. Whatever budget Congress appropriates for defense that year would be reduced by 7.9 percent—same for the EPA and every other agency subject to the cuts. That's why defense gets hit hardest: excepting entitlements, it has the biggest budget to begin with.
That said, the structure of the triggered cuts is not set in stone. As Manu Raju pointed out on this morning's Brian Lehrer Show, since cuts don't begin until 2013, politicians have a whole year to change the rules; the summer's debt ceiling deadline was supposed to be doomsday, but Congress came up with a way to postpone a meaningful decision and shift responsibility. It's entirely possible we'll see a similar story unfold in 2012, with Republicans and Democrats jockeying over how the trigger will work in the absence of a deal. The rate of cuts could change, as could the division of burden, the timetable, and whatever else one might imagine.
It's extremely difficult to envision the breakdown of non-security spending cuts resulting from the trigger beyond an across-the-board rate of 7.9 percent, but the picture for defense spending is clear. Failure by the super committee would weigh heaviest on a major pillar of the Republican platform, at least under the current structure of the trigger. However, the next year offers plenty of opportunity for a Republican-controlled Congress to shift the balance of triggered cuts in a direction that favors GOP policy, potentially slimming the chances of compromise with Democrats even further in the process. One wonders if Congress will ever come to an agreement and tackle deficit reduction with a sense of finality—and face the consequences of inaction—or look upon each deadline as a chance to lather, rinse, and repeat.