11th
The “Super Committee” and Taxes
It’s Groundhog day with the second installment of the recently concluded debate over spending and taxes set to begin again when Congress returns from its Summer break Sep. 7.
Spending is on the table. It is unclear whether taxes are on the table or hovering slightly near the table.
The BIG difference between the debt ceiling debate which just ended in such ugly fashion and the upcoming encounter is that this time, Obama also has leverage on the tax side of the equation.
The big elephant in the room is the Bush tax cuts, which are set to expire on Dec. 31, 2012 if no action is taken by Congress. With a majority in the Senate and the veto pen, the president has the option of letting tax rates revert back to Clinton era-levels should he choose to do so.
The two parties have recently named their starting lineups (mostly) for the 12-member so-called “super committee” which must present its plan to cut $1.5 trillion from the federal budget to Congress by Nov. 23.
The current political mood is hard to judge.
Democrats experienced a major backlash from their base following the last deal and a narrative has taken hold in the media that Obama has been wounded by the economic malaise the country finds itself in. However, Republicans did themselves no favor with the general public, a trend consistently revealed by opinion polls.
The coming debate will be interesting to watch. Don’t expect any meaningful results to come out of the process just a year out from a general election.
At this point, you figure there’s a better than even chance we’ll be looking at an enforcement of the trigger mechanism that will automatically cut $1.2 trillion from the Pentagon budget and Medicare (providers only).
Mitch McConnell and John Boehner showed intransigence in picking the likes of Toomey, Kyl, Hensarling and Camp to the super committee. Reid’s pick Patty Murray, the current head of the DSCC was also an easy political target for Republicans.
