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Mon November 21, 2011
Superfailure Looks Likely; Then What?
Originally published on Mon November 21, 2011 7:28 am
The headlines this morning all say pretty much the same thing:
-- "Deficit Effort Nears Collapse." (The Wall Street Journal)
-- "Debt Supercommittee Members Brace For Failure." (The Washington Post)
-- "The Deficit Deal That Wasn't: Hopes Are Dashed." (The New York Times)
-- "Parties Brace For 'Super' Fallout." (Politico)
-- "For Debt Committee, No Final Hour Deal Apparent." (Morning Edition)
As NPR's Tamara Keith reported for Morning Edition, since today "is the last day the congressional supercommittee can reach a deficit reduction deal and still make its Wednesday deadline" to have legislation ready for a vote, "it is widely expected the committee will admit it has failed."
NPR's John Ydstie says many experts are worried about financial markets going "into a spiral." And as he reports, "it could look a lot like the stock market losses surrounding the debt ceiling crisis" last summer. "During the two weeks surrounding that debate, the Dow Jones industrial average dropped close to 2,000 points. Some of those losses were associated with the European debt crisis."
Beyond that possible immediate impact, there's the prospect of deep, automatic cuts in domestic and defense spending starting in fiscal 2013. The Associated Press, though, says lawmakers will likely spend lots of time arguing over how to keep that from happening:
"Failure by Congress' debt-cutting supercommittee to recommend $1.2 trillion in savings by Wednesday is supposed to automatically trigger spending cuts in the same amount to accomplish that job. But the same legislators who concocted that budgetary booby trap just four months ago could end up spending the 2012 election year and beyond battling over defusing it."
And of course, there will be the blame game — which has already begun: As Tamara reports, on the Sunday shows there was talk from supercommittee members such as Sen. John Kyl (R-Ariz.) about Democrats always wanting "the same thing: raise taxes, pass the president's jobs bill, no entitlement reform." And Sen. John Kerry (D-Mass.) said it was Republicans who won't budge their resistance to any increase in taxes on the wealthy.