The Super Committee Fails – Medicare and Defense to Suffer

Heartache and disappointment were thick throughout twitter, facebook and the comments on articles across the internet on the news that the Congressional “Super Committee” on deficits had failed. In actuality, nothing has actually happened.

Rep. Jeb Hensarling, the Republican co-chair of the committee, penned an account of why the committee failed. In short, the Democrats dismissed the three major Republican ideas out-of-hand, promised to bring back plans of their own and never did.

First, democrats took any and all spending related to President Obama’s health care plan off the table. Then rejected Bill Clinton’s budget director’s plan, then rejected ideas from the bi-partisan Simpson-Bowles commission. After quickly killing all three ideas, two from bi-partisan or Democrat sources, the committee democrats came back with their own plan… er ..  not really.

To put this in perspective, there were exactly 6 democrats and 6 Republicans on the committee. There was one Republican and one democrat co-chair. No one side had more say, more power or more influence than the other.

The Republicans presented three ideas, the Democrats refused them and presented nothing in return.

On to the important part – why should anyone care?

In a word, sequestration – the automatic $1.2 trillion in cuts that will occur in 2013 if Congress doesn’t pick up the ball dropped by the committee. Those cuts will happen “equally” in national defense spending and domestic programs should Congress not be able to find $1.2 trillion in cuts.

The CBO estimates that the cuts will take almost 10% from the defense budget and would cut Medicare by up to 2% of the program’s costs.

The Medicare cuts should be alarming to anyone on the federal medical program. 100% of the cuts come in the form of cuts on the amount paid to providers. If providers are paid less, we’ll see them opt out of the program and seniors will have fewer choices of where to get care. Medicare is expected to lose about $125 billion in funding from 2013 to 2021.

The toll on America’s ability to defend itself will likely be impaired as well. Just under $500 billion in cuts are expected to have to be swallowed by the nation’s military. Rep. Buck McKeon (R-CA), House Armed Services committee chariman, said that he will be proposing a bill to head-off the sequestration cuts to defense spending. Rep McKeon said that his legislation is necessary because the cuts would cause “catastrophic damage to our men and women in uniform.”

President Obama’s response was to continue the Democrat strategy – just say no to anything the Republicans propose. On Monday evening, the President noted that “Already some in Congress are trying to undo these automatic spending cuts, my message to them is simple: No.”  The president continued by threatening to veto any measure to hold back the cuts to Medicare or the country’s armed services.

Unfortunately, with or without the sequester the end is the same – out-of-control spending. Veronique de Rugy of Mercatus Center wrote:

Changes in spending from sequestration result in new budget projections below the CBO’s baseline projection of spending based on current law. The federal government would spend $3.62 trillion in the first year with sequestration versus the $3.69 trillion projected by CBO. By 2021, the government would spend $5.26 trillion versus the $5.41 trillion projected. Overall, without a sequester, federal spending would increase $1.7 trillion over those ten years (blue line). With a sequester, federal spending would increase over ten years by $1.6 trillion (red line).

Despite the stonewalling from Democrats, some polls show that a slight majority of Americans will blame Republicans for the failure of the 50/50 split bi-partisan committee despite most Americans opposing sequestration.

The super committee was a failed idea with a designed end. Democrats knew all along that they weren’t going to do anything. They couldn’t even bring themselves to propose a single plan. Now that the extra-legislative body has failed, what is the next step?

Since the cuts don’t take effect until 2013, the only course of action left for Conservatives who wish to see discipline returned to the budget process is to win the Senate and White House in 2012. At that point, a responsible budget can be put in place and the sequestration can be done away with.