By Nicholas Wapshott
All opinions expressed are his own.
Thanksgiving, I don’t have to remind you, marks the settling of irreconcilable differences between the early settlers and the original Americans, the burying of the hatchet, as it were, between Christians and heathens. If only this Thanksgiving marked the same.
The Congressional supercommittee that was created to find $1.2 trillion in spending cuts has until November 23, the night before Thanksgiving, to find a way to pay down the national debt. But things look bleak. Former Bill Clinton chief of staff Erskine Bowles, whose own deficit cutting plan dribbled into the sand, told the committee the prospect of their reaching an agreement is no more than 50-50. If there is going to be any burying of the hatchet this Thanksgiving, it may be deep in someone’s cranium.
The arguments in the committee echo the ill-tempered debate in the summer over extending the federal debt ceiling. As before, the Democrats will only agree to entitlement cuts if the Republicans agree to raise taxes on the wealthy. As tax breaks for the rich have become an article of faith for Republicans, compromise seems unlikely. Intransigence is the order of the day.
But there is a significant difference between the obduracy on display in July and the obduracy that may doom an agreement this time around. In the summer, the Republicans were calling the shots: agree to a debt deal without tax increases for the top earners or we’ll allow the government to default on its debts and the dollar to be downgraded. This time failure to come up with a deal will automatically trigger $1.5 trillion in spending cuts, starting in January 2013. The slash and burn program was built in to the debt ceiling deal to spur the committee to agree. Neither side, it was thought, would want such brutal cuts, divided evenly between the military and benefits for the old and the unfortunate.
This would appear to give the advantage to the Republicans, the party of small government, who favor deeper cuts made more quickly. They should take care what they wish for, because there are considerable benefits to the Democrats if the scale and substance of the automatic cuts become real. The president set out on his reelection campaign in earnest two months ago when he demanded the Jobs Act, a $447 billion Keynesian stimulus by another name, be passed, despite knowing it never would be. Since then he has been on a bus tour to key election battlegrounds such as Ohio, Virginia, and North Carolina, telling his audiences he could find them the jobs they crave if only the Republicans would be reasonable.