The super committee has predictably failed – maybe there was green kryptonite hidden in its meeting room. Months of nearly round-the-clock debate about reigning in the national debt, conducted at the highest levels of government, come to a close with nothing done about the problem. This is the essence of contemporary Washington: lots of empty talk, interest groups appeased, all difficult decisions indefinitely tabled and the national interest ignored.
What comes next? Most likely, Congress will make the national debt even worse.
Republicans want to extend the George W. Bush top-rate tax cuts. Democrats want to extend the Barack Obama payroll tax cut, and enact yet another bonus extension of unemployment benefits. One or all may happen by Christmas as both parties switch to full-blown pandering mode.
If the costs in the December 2010 stimulus bill are any guide, a package of extended tax cuts for the well-off, payroll tax cuts for everyone and bonus payments to the unemployed will add around $700 billion to the national debt.
Bear in mind, last December’s stimulus bill (the third, following a 2008 stimulus under Bush and a 2009 stimulus under Obama) entailed $860 billion in borrowing. If another $700 billion or so is borrowed for lead items on the parties’ wish lists, during the very 12 months that Washington has refused to take action to reduce the national debt by $1.2 trillion over many years, an extra $1.5 trillion will be added to the debt in the here and now.
If tax-cut and unemployment-benefit extensions pass, Congress will already have spent every penny of the $1.2 trillion the deficit commission was supposed to save. Though no money has actually been saved yet – the “mandatory” spending reductions triggered by super committee inaction don’t start until 2013, which leaves plenty of time for Congress to cancel them.