As Congress gets set to reconvene after Labor Day, all eyes have turned toward the so-called “super committee”—the special budgetary panel created by the debt limit deal. That’s understandable because the super committee has the potential to be a very, very powerful force in Washington. As constituted, if seven of the twelve members of the committee agree to a proposed deficit reduction plan, it will be brought up for an up or down vote in the House and Senate—without the possibility of amendment from non-super committee members. Further, and even more importantly, the super committee’s legislative proposal can’t be filibustered in the Senate. That effectively lowers the bar of support needed to get a super committee-endorsed plan through the upper chamber by nine votes—from a super majority of 60 to a simple majority of 51.
The committee’s legislative mandate is also sweeping. It is charged with finding a minimum of $1.2 trillion in deficit reduction over the coming decade to avoid the same amount getting cut automatically and indiscriminately from a wide array of spending programs, including Medicare and the defense budget. To meet its deficit cutting objective, the super committee has the authority to tackle tax and entitlement reform, health care, the budget and appropriations process, even government reorganization. All it takes to get something big and serious moving through Congress is for seven of the super committee members to support it.
But, of course, that’s the rub. Getting seven members of the super committee to agree to anything won’t be easy. There are six Republicans on the panel and six Democrats, all appointed by the top party leaders in both chambers. Their appointments came on the heels of a bruising, months-long partisan battle over raising the debt limit in which numerous proposed “grand bargains” on the budget were floated and ultimately jettisoned. Now, in some quarters, there’s hope that the super committee will be able to agree to something like a grand bargain despite the failure of party leaders to do so just a few weeks ago.
But is a grand bargain from the super committee even something to hope for?
It depends, of course, on what a grand bargain would accomplish. Unfortunately, in the spring and early summer, the contours of the grand bargain under discussion between the White House and Republican congressional leaders was anything but desirable. It would have required a painful concession from Republicans on tax increases in exchange for agreement by Democrats to support some reduction in entitlement spending. On the surface, it looked like both sides were giving something. But not all entitlement changes are created equal. The types of changes Democrats were agreeing to did not fundamentally alter the entitlement programs in ways that would really make a difference. Striking a deal on the terms outlined in June and July would have been a substantive and political debacle for the GOP.
For a grand bargain on the budget to be worthy of the name, it would need to address in a serious way the primary reason the long-run fiscal outlook is so bleak, which is the coming explosion in health care costs. The president promised the health care law he jammed through Congress in 2010 would “bend the cost curve,” but it’s already clear that the supposed cost-cutting in what was passed is a mirage. The only real cutting contained in the health law is in what Medicare pays for unit services. That’s been the pattern or three decades, and it hasn’t worked to slow the rise of Medicare’s overall cost. Worse still, this type of cost-cutting in Medicare actually increases costs for the privately insured even as it was used to grease the way for a massive entitlement expansion, with at least 30 million more Americans expected to be brought onto the government’s benefit rolls.
What’s needed is an entirely different approach to health and entitlement reform, one that relies not on central government command and control but on a functioning marketplace with cost-conscious consumers. That’s the way to bring about new cost discipline and higher quality health care because it is only through competitive pressures that productivity in the health sector will accelerate.
But it is also true that this kind of reform would mean sweeping away the president’s signature initiative. It thus stands zero chance of happening while the current president remains in office. Any “grand bargain” struck in 2011 or 2012 would almost certainly leave today’s health entitlement programs, including those erected by ObamaCare, largely unreformed, and thus isn’t the kind of grand bargain that should get any support at all from the GOP.
Some Republican super committee members may feel pressure to accept such a deal to avoid the automatic cuts in the defense budget scheduled to occur in January 2013. There’s no question that a deep reduction in the military’s spending authority in fiscal year 2013—some estimates put the size of the cut in that year at about 10 percent using current spending projections and assumptions—would be completely irresponsible, especially in time of war, but that’s no reason for the GOP to acquiesce to a terrible deal on taxes and entitlements. If the super committee were to fail to reach an agreement, and the $1.2 trillion in automatic cuts were thus scheduled for implementation, there would still be ample time to undo the defense cuts in 2012 before they actually took effect. Moreover, a stalemate on the budget—and on health care—in the super committee would mean that the voters would get to have their say in 2012 before difficult-to-reverse decisions were made by Congress and the president. In the end, that’s probably the best way to settle a fight over what amounts to fundamentally different governing philosophies.
James C. Capretta is a fellow at the Ethics and Public Policy Center and project director of ObamaCareWatch.org. He was an associate director at the Office of Management and Budget from 2001 to 2004.