One way to look at the creation of the deficit super committee of twelve Congressmen and Senators is that this was the only way for the leadership in Washington to deal with the radicals in the Democratic and Republican parties. The Far Left wants to soak the rich and the corporations with tax increases and is absolutely opposed to cuts in entitlements. The Far Right doesn’t want to raise the debt ceiling under any circumstances and is steadfast against tax increases on anyone. So, as the story goes, the centrists are getting together to put forward a reasonable plan. The idea is for a semi-grand bargain that would raise revenues by reforming the tax code and make substantial cuts in non-defense discretionary spending and possibly change the benefits formula for Social Security.
But there is another interpretation of the super committee. This is that the committee was set up not just to fail but as a booby trap. Well, two booby traps actually, one laid by the Democrats and the other by the Republicans. The Democratic booby trap is based on the assumption that the Republicans, particularly the Tea Party freshmen in the House, will never accept tax increases. Therefore, there will be no deal. As a consequence, defense gets whacked because of the automatic cuts that will be triggered. The Republicans would then implode as the pro-defense and anti-tax wings collide.
Of course, the other way the Democrats could win the political contest is if the Republicans swallow hard and accept tax increases as the price of preserving defense. In the Iowa debate, presidential candidate Newt Gingrich framed the problem as a choice between having a leg or an arm cut off. Either way, the Republican Party would enter the 2012 election period gravely maimed.
But the other way of looking at this same situation is that it is a trap set by the Republicans for the Democrats, in general, but the President, in particular. If the automatic cuts are triggered, defense spending could be cut by as much as $1 trillion over the next decade depending on assumptions about the baseline against which cuts are to be measured. If the Republicans on the committee hold firm in the super committee negotiations on their initial position of no tax increases, the Democrat members will have to choose between caving in on taxes or looking like they are anti-defense. The question will be do you hate the rich more than you support the troops? Could President Obama as Commander-in-Chief actually accept the gutting of defense? It would be a great issue for his Republican opponent in the 2012 elections. So, in the end, the Democrats may be forced to accept an all-spending cuts solution out of the super committee in order to help the President’s reelection chances.
In reality, neither party has an incentive to see defense spending drastically cut. Reformed, yes; gutted, no. So, both sides are likely to look for any way they can of avoiding the booby trap of automatic cuts in future defense budgets.
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