Afraid of Their Own People

The congressional supercommittee is charged with rescuing the over-indebted United States by coming up with a plan to restructure America’s finances. Right now, the group is as good as dead because Republicans want to continue permanently protecting the super-rich from paying more taxes. Not even that old gambler Max Baucus has been able to help.

Max Baucus is known as an old hand in politics. The Democrat has been a Montana senator for 33 years. The gray-haired financial expert is known as a numbers freak and a shrewd gambler. Even Republicans consider him a pragmatic deal-maker, someone who is open to compromise. Therefore, Washington got its hopes up when, late in the summer, Baucus was included in the supercommittee charged with coming up with a long-term restructuring plan for America’s finances.

A lot has to happen for this gravely serious man to show much emotion. At the end of last week, however, as his supercommittee threatened to fall apart, his emotion showed. “We’re at a time in American history where everybody’s afraid — afraid of losing their job,” Baucus said, blaming the nation’s elected officials. He went on to say that not enough people were willing to do the right thing for the country for fear of radical elements in their own party. Baucus then digressed for a moment to recall his nephew Philip, who was killed in Iraq in 2006: “Compared with the thousands who have given their lives in service to this country, I think it’s tragic, and it speaks volumes” that politicians in Congress and the White House are “too worried about their jobs in order to reach an agreement.”

Officially, the deadline for the 12-member supercommittee is Monday night, but as early as Sunday, it became apparent that the six Democrats and six Republicans would reach no compromise to reduce America’s debt by $1.2 trillion over the next 10 years. This failure will likely exacerbate the low esteem Americans have for Congress, which currently has a miserable 9 percent approval rating. Obviously, both parties are hoping to use the disagreement in their 2012 election campaigns. For weeks, President Obama has been attacking the “do-nothing” Congress, depicting it as unwilling to solve the economic crisis. Republicans have been following an anti-Washington strategy, promising to clean house after they’re elected.

The supercommittee was created in August when President Obama and the Republicans disagreed on raising the statutory national debt limit, and the country narrowly missed declaring bankruptcy. Shortly afterward, Standard & Poor’s rating agency downgraded America’s AAA credit rating. The idea was that a supercommittee would break taboos: Democrats would have to accept cuts in social spending such as Social Security, Medicare and Medicaid. In return, Republicans would accept tax increases. In the event of no agreement, across-the-board automatic cuts amounting to $550 to $600 billion for both social programs and defense spending would go into effect in January 2013. Neither party wants that to happen.

An agreement seemed within reach until 10 days ago. Democrats had managed to agree on $400 billion in cuts to various social support and medical programs. The Republican response agreed to $300 billion in tax increases over 10 years. Economic models suggested for several days that the remaining $400 billion difference was two-thirds of the way to a $1.2 trillion compromise.

But that was too optimistic because Republicans made their agreement to a tax increase contingent upon also making the Bush tax cuts permanent. According to law, those tax cuts, which have cost the U.S. government $4 trillion over the last 10 years, will expire at the end of December.

Democrats also want to extend the Bush tax cuts, but with one difference: The top 2 percent of the income pyramid would have to pay higher tax rates as of 2013. Senator Patty Murray insisted that any deal was dependent on revenues and had to be “fair to working families.”

The failure of the supercommittee now forces the entire Congress to resume negotiations. Decreases in Social Security revenues and the end of the temporary extension of unemployment benefits both loom at the end of the year. Without both of these, 2012 growth could well be 2 percent lower than forecast. Whispers around Washington have it that both parties don’t want to take up the issue until Nov. 7, 2012, one day after the presidential election. That’s when they will be least afraid of their own constituents. Max Baucus stands ready to do what his duty requires of him: Come up with a compromise. His term as senator doesn’t end until 2014.