US Politics Feature: Can Super-Committee "Get It Done" on Debt Reduction? The Signs Say No

The "Super Committee"Next Thursday, the Joint Committee on Deficit Reduction --- the so-called Super Committee --- begins in earnest its search for $1.5 trillion or more in cuts to the national debt over the next ten years. Its first item, “Overview: Revenue Options and Reforming the Tax Code", will look at ways that the code can be simplified through the elimination of many tax "breaks" currently enjoyed by both individuals and corporations. No surprise there: proposals for tax reform, of varying scales, have been included in every deficit reduction plan that has appeared since the publication of the  Bowles-Simpson report in January, and both sides of the political divide have made noises over the past year that they are willing to consider changes in the way Americans are taxed to help stabilise the debt.

But that is as optimistic, for those who actually want to see the committee achieve its goal, as it gets these days in Washington. Already, the two political parties are staking the same rhetorical and ideological positions on revenues that soured the debt-ceiling negotiations back in July, talks that resulted in historic nationwide disapproval of politicians in Congress.

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US Politics Feature: Can a Senator Named Coburn Cut $9 Trillion from the US Government's Debt?

Washington has a notoriously Byzantine manner of getting things done, but if his new subcommittee is ordered to write out new legislation reforming the tax code as part of a super-committee deal, Senator Tom Coburn will wield enormous influence. After all, he has a comprehensive plan ready to go. If that is the scenario that ultimately plays out, it will be fascinating to see the response of special interests, business lobbyists, and advocacy groups --- can they maintain their hold over a Congress newly determined, and chagrined after the nation's credit downgrade, to begin finding a long-term solution to America's debt problem?

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US Politics Special: Fiddling While America Defaults?

With four weeks to go before the US faces a possible default on its debt, there is still little sense of how President Obama will lead the country out of the public finances mess the nation faces. It defies belief that the Administration does not have some kind of long-term strategy to ensure that America pays its bills come 2 August, but quite what that plan is nobody outside the Administration could claim to know for sure.

One disturbing possibility to begin considering is that Obama is privy to information that the crisis in America's finances is worse than thought --- his seeming reluctance to get fully involved in the debate is, in fact, a masterful attempt to avoid spooking the markets before a Band-aid can be slapped on the problem. That is pure speculation, but it says something about the ineffectiveness of the President that the only way to take some cold comfort from his performance is to imagine an even worse scenario.

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US Politics: Compromising on the Federal Government's Debt

A few weeks ago it appeared that Republicans were prepared to use the need for increasing the debt limit to push through some of the controversial measures included in their 2012 Budget Resolution, notably the plan proposed by Rep. Paul Ryan (R-Wisc) to change the Medicare programme for future beneficiaries and/or a Balanced Budget Amendment that would require sharp and immediate reductions in government spending.

These options are not totally off the table, especially with the pressures being exerted within Republican ranks by new members of Congress keen to assuage their Tea Party constituencies, but the overwhelming message that emerged from participants after the Biden talks is the urgent need for compromise before the debt limit vote.

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