Super Committee: Take Automatic Cuts ... or Make a Deal?by Gerri Willis
Five days - that's how much time is left for 12 partisan lawmakers to reach a compromise. It could be five months - or five years - and the odds of a compromise would still be slim to none. But five days is what the Super Committee has - or these "automatic cuts" will be triggered. So what does that mean?
If the six Democrats and six Republicans fail to reach an agreement - we would see one point two trillion dollars in cuts. But that's over ten years. And they won't kick in until January 2013.
These cuts would also be put in place if Congress rejects the Super Committee plan or President Obama vetoes it. $984 billion dollars in cuts would be split between defense and non-defense programs. The other $20 billion will come in the form of lower interest payments on our 15 trillion dollar debt.
According to the Center for Budget and Policy Priorities - that's about $55 billion in both defense and non-defense spending each year through 2021.
Social Security benefits are exempt from the spending cuts - as are Medicare benefits, veteran's benefits, food stamps and a few other programs designed to help seniors and low-income americans. But not everything having to do with Medicare will be spared!
Payments to hospitals and other health-care providers will be reduced by two percent a year - these cuts will be coming just as obamacare really starts to kick in - so I'm sure doctors are loving this plan!
And regulatory agencies such as the Commodity Futures Trading Commission and the Securities and Exchange Commission will see their budgets slashed - making it even more likely they will not catch major violations.
One of the biggest casualties of the automatic cuts though would be the military.
And as we've mentioned Defense Secretary Leon Panetta is warning of "doomsday" if the Super Committee fails to act! The Pentagon is already facing $450 billion in cuts over the next ten years. If these automatic cuts take place that would mean a 23 percent cut in the budget - in the first year alone!
By his calculations, Panetta says: "We would then have the smallest ground force since 1940, the smallest number of ships since 1915, and the smallest air force in history."
Not to mention possible months-long furloughs of civilian employees and a complete overhaul of our national security strategy. But Secretary Panetta shouldn't panic just yet - because there's a chance Congress might actually cave on these cuts.
Congress can take all of next year - an election year - to rescind or change any of these things.
Either way I'm not very optimistic any legitimate plan will emerge by 2013. Why? Because this is fourth group of people tasked with coming up with one. The National Commission of Fiscal Responsibility and Reform - headed by Bowles and Simpson - came up with a plan to cut four trillion dollars. That never went anywhere.
The Debt Reduction Task Force - with Pete Domenici and Alice Rivlin - wanted to cut six trillion dollars! That plan was dead on arrival. And the Gang of Six - the bi-partisan senators - had a three and a half trillion dollar plan that never happened.
This administration's approach to debt reduction is the definition of insanity - doing the same thing over and over again - but the national debt is now above $15 trillion.
It's beyond time to stop playing political games and start taking our national debt seriously cause you know us taxpayers already are.