Don't let the super committee fail
September 17th, 2011
09:47 AM ET

Don't let the super committee fail

Michael E. O'Hanlon

Editor's Note: Michael O’Hanlon specializes in national security and defense policy and is senior author of the IraqAfghanistan, and Pakistan Index projects. You can read more from him on the Global Public Square.

By Michael O'Hanlon - Special to CNN

With President Obama’s expected unveiling of a detailed deficit reduction plan this upcoming week, aimed to influence and cajole the super committee, which must report with its proposal by November 23, the debate about how to reduce our huge fiscal overhang is about to get intense again.

President Obama can be expected to put forth a balanced approach for cutting $1.5 trillion in government spending, with a mix of tax increases and spending cuts in most discretionary parts of the government budget as well as some aspects of Medicaid and Medicare. Most likely, any tax increases the president proposes, relative to the current Bush-era tax rates due to expire at the end of next year, will focus on just higher-income earners.

This will be a reasonable plan. But if the super committee goes a different direction, and its 6 Republicans adamantly oppose any talk of any tax increases whatsoever (or, more accurately, any suggestion that Bush tax cuts not be extended), there is a better approach for Democrats than to simply vote it down and allow sequestration to kick in. They should take whatever package of balanced spending cuts is possible to achieve this year, approve it, and then let the 2012 campaign be a referendum on what to do next.

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Sequestration would be a bad idea because it would devastate national security as well as key domestic investments funded within the so-called domestic discretionary accounts. Both these areas of spending would be targeted for disproportionate cuts if the super committee is unable to forge a deal or if Congress is unwilling to pass whatever deal it comes up with. Among other things, defense cuts could then approach $1 trillion over ten years with precipitous cuts beginning in 2013. This would require the nation to make unpalatable and indeed unwise choices, like whether to maintain its strong defenses in the Persian Gulf or the Western Pacific Ocean, because it will no longer be possible to do both well, even as Iran intimidates and China rises.

Many Democrats, myself included, would find it unreasonable of Republicans to refuse to include any revenue increases in a budget deal this fall. Given that tax rates are historically quite low today - lower than at most periods of Reagan’s presidency, lower than during Clinton’s time in office - there is a very reasonable case to go back to 1990s rates until we can reform the tax code (ideally reducing exemptions in the process, and possibly adding an energy or a value-added consumption tax too, thereby permitting lower income tax rates to go with increased revenues). Globalization, automation, and other innovation have continued to help the wealthy of this country disproportionately and it is only right that upper-income Americans pay a bit more in taxes.

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But if the GOP refuses this argument in the fall, smart political tactics would not be to have Democrats fall on their swords and block a deal. Not only would the resulting sequestration jeopardize crucial federal programs and investments, but the resulting standoff would sour Americans even more on their current government - and jeopardize the economy even more, in both the short term and the long term.

The better strategy would pocket whatever balanced deal is available, including some entitlement reductions and even some social security reforms. Everyone could then acknowledge that more deficit reduction work needed to be done and the two parties could fashion their proposals for next steps and ask the voters to help the nation choose via the 2012 elections. Democrats would presumably suggest that some tax increases would be preferable to further deep cuts in discretionary accounts or big reductions in entitlements. Republicans would likely continue to oppose any tax increases and perhaps bring out a modified version of the Ryan Plan as their vision for the future. Ideally, both parties would also lay out ideas on tax reform, not just on income tax rates.

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There is no reason such an approach should work strongly for or against either party. It would be a straightforward choice for the American people, easy enough to explain and campaign on, honest and constructive in its character, and in the best traditions of democracy. And any politician truly confident in his or her views on fiscal policy, national investments and taxes should be unafraid to ask the voter for a verdict.

The views expressed in this article are solely those of Michael O'Hanlon.

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Topics: Debt Crisis • Economy • Politics • United States

soundoff (193 Responses)
  1. JennyTX

    I completely and totally disagree with this!! The Democrats need to stand firm for a change. Let the Repubs do a little compromising and respect what the vast majority of Americans want, which is to let the rich do their fair share in fixing the economy. Stop making the poor and middle class get us out of this recession.

    September 18, 2011 at 11:14 pm | Reply
  2. Russ

    I hope Obama's policies fail!!!

    September 18, 2011 at 11:16 pm | Reply
  3. dem737

    Notice how all the repulicans are old white men? I'm an old white man raising my family. The difference between them and me is they are rich, I am not. They do not represent America, only old rich white men

    September 19, 2011 at 12:15 am | Reply
  4. Baldman

    Trickle down economics DOES work. I WISH we had been practicing it the last 30 years (as someone said). It was what got us out of the nasty economic mess known as the "70's".

    September 19, 2011 at 12:55 am | Reply
  5. Matt

    We have three choices:
    1. Raise taxes and do not cut spending- will not get us very far.
    2. Cut spending and do not raise taxes. again will not help.
    3. Raise taxes and cut spending. Look at your own personal finances that is what you would have to do (increase revenue and cut expenditure) if you were in our counties position. I just cannot understand why people are so mad when someone tells them the truth. Oh it is because not everyone is getting taxed only the rich in the case. Well guess what the poor cannot pay anymore and no matter how much you want to whine and complain that fact will not change. The middle class could pay more and I am sure we will get to that, but it needs to start somewhere and at least Obama has the courage to tell us what we need to hear.

    September 19, 2011 at 1:54 am | Reply
  6. more obama lies

    how can you love a person who only wants one thing, total control of your life. obama is a racist who wants only one thing, to tax the white man to pay for those who do nothing but sell drigs and sit on the corner threatining the livelyhood of all workers. It is time for all true patriots to take a stand and kick this bum under the bus and Take Back America from this marxist socialist pig. Rally around America and defeat obama.

    September 19, 2011 at 6:02 am | Reply
    • EUMIR

      You mean "sell drugs" and yes, he is a socialist racist.

      September 19, 2011 at 7:34 am | Reply
  7. Kathleen

    We can raise taxes on the rich until there aren't any more rich to tax. It's not going to solve the fundamental problem–spending. Increasing revenues just gives our illustrious legislators the ability to fund tiny airports no one uses that are within 90 miles of a larger airport, bridges to nowhere...the list goes on and on. The only way to control our government is to control spending.

    September 19, 2011 at 6:58 am | Reply
  8. Hannibal7

    The panel idea was a failure the day it was formed. Proves Obama has NO Idea what he is doing and has no plan other than to put it in your eye and tax tax tax. Every cut he will mention will be "Over 10 years"... guarenteed hype, smoke and mirrors. A man withotu a plan.

    September 19, 2011 at 7:01 am | Reply
  9. gary

    politicians will continue to play politics, pander for votes and allow the USA to die

    September 19, 2011 at 7:03 am | Reply
    • EUMIR

      Thank you.

      September 19, 2011 at 7:32 am | Reply
    • Markus

      Sadly true.

      September 19, 2011 at 9:13 am | Reply
  10. Brad

    Problem is this committee isn't bi-partisan. Since Boehner said no tax hikes, the committee is tainted. Again our 'leaders' show through their actions they are not serious about solving this problem.

    September 19, 2011 at 7:33 am | Reply
  11. Bobby

    It is very shameful that we worry about the debt of other nations, while we forget the same facts which will destroy our country in near future. Instead of advising others, we cant even reach on consensus to reduce our own debt. This nation had surplus money over a decade ago and now we have trillions of deficit. 2 unpaid wars, loss of income on taxes etc have ruined this nation. Party politics and personal interest group are working against this country future. Wake up you sick politicians and work together if you want to US to come out of this mess which has been created.

    September 19, 2011 at 7:55 am | Reply
  12. nwade

    As I watch the debacle in Washington and look around me at the implications of all or nothing approach to governing I realize we are not only ruining our country but ruining the next generation as they are growing up in a world where we try to boil everything down to yes/no or black/white when noting is that simple. We need to have complicated conversation with an understanding that a solution will require giving on both sides.

    I have recently been debating welfare with two groups of folks who believe we either should take care of people for life or we should not provide any support for anyone. Here are my in the middle solutions for welfare, healthcare, and taxes.

    *No section 8 vouchers can go to individuals without young children in the household. It is crazy that a household with 4 grown adults can have free rent forever when everyone is capable for working while a senior citizen at 62 can't get any support. Section 8 should be for families with kids and senior citizens. I know individuals who do the math and decide it is better not to work than work for $8 an hour. To avoid this give folks a time limit on section 8 and let them keep whatever money they make in that time. Don't reduce aid based upon salary because we want folks to get use to making more money so that when their voucher is gone they can afford to pay their own rent.

    *Limit time on section 8. Today many folks who need help can't get it because folks keep section 8 for a lifetime

    * Require attendance in school(community college) or getting up and working daily without pay (e.g. many classrooms for student PreK-3rd grade could use an extra adult monitor, what about lunch room monitors, why can't folks have jobs cleaning the school and or parks).

    *No one should get more in a tax refund than what they paid. I am tired of seeing folks with section 8, and food stamps get 3K tax return check just because they have kids when many do not all do not use the check on the kids. Create a relationship with department stores such that if we are going to give tax refunds to individuals who are receiving aid and have children they can only spend the money on items for their child which is the reason they got the return in the first place.
    * Create a flat tax rate that everyone pays. No deductions. This is fair and makes everyone equal. Money should be taxed equally regardless of how one gets it- hard work, inheritance, or investment. At the end of the day it is money so tax it the same.

    * Require everyone to have insurance because there is no isolate everyone else from a person's decision to not have healthcare unless we as a nation want to say that we won't provide treatment for someone without care. Given we won't say this then someone's personal decision to not have healthcare impacts everyone. My mother-in-law doesn't have health care but had a stroke and the citizens re now paying for her to receive 20 hrs a week of in-home care, all of her medicine, etc. This isn't collectively fair.

    *Create national standards, develop value-added assessment, reduce tenure to recurring 5 year cycles that require review of tenure status based upon body of evidence. The review of prior five year value add will also determine your salary band, hence pay for performance. Stipends can be added for working in more challenging areas. Teachers not meeting set standards are placed on probation for 1 year and must attend classes weekly to help improve practice based upon areas of weakness. These classes are taught at local schools of education with a combination of educational faculty and practicing master teachers who are given release time every 5 years to teach fellow teachers. If teachers after attending classes do not improve the following year they are released.

    *Need to reduce the cost of running in an election. Create consecutive term limits such that if someone wants to be a career politician they need to run for different offices.
    *Require politicians to have the same healthcare and pension as other government employees.
    *Create standards social media tools that make clear and simple the votes of politicians. I want a tweet and a facebook message every time my elective officials vote and I want the votes to be visualized next to the campaign promises.
    *Don't allow politicians to become lobbyist for 3 years after leaving office

    September 19, 2011 at 8:33 am | Reply
  13. GM

    What a board of Robinhood wannabe s. You can blame Bush all you can blame the rich....blame oil companies....blame airplanes....blame people who have risked it all and made it. Bame republicans.....blame the tea party....blame india....blame china. Blame insurance companies....macdonalds, microsoft, atms.......

    When there are no new jobs created and there is nowhere else to take from – just look in the Mirror.......

    Blame doesnt fix anything. True leadership does.

    September 19, 2011 at 8:54 am | Reply
  14. a6102658

    There is not such thing as "job creators"; if there is demand, a business will increased production fulfill such demands, but you will not have demand if workers do not have jobs and therefore unable to make purchases.

    September 19, 2011 at 9:05 am | Reply
  15. Liz

    What a terrible opinion piece! Are you seriously suggesting that we just kick the can down the road AGAIN until 2012? And that the Democrats just cave and let the Republicans win AGAIN despite the fact that they don't hold the White House or Senate? Please. Enough of this nonsense. It's time the democrats showed some cojones!

    September 19, 2011 at 9:15 am | Reply
  16. Cynthia Newman

    Vote Ron Paul

    September 19, 2011 at 9:38 am | Reply
  17. patrick kelly

    obama is a terrible president

    September 19, 2011 at 9:48 am | Reply
  18. Delat

    The problem with the Democrats caving now and waiting for the elections is that the minority group in the Senate can block anything they feel like. The Republicans have shown that they are perfectly willing to bring government to a standstill. So even if the Democrats controlled all branches of the legislature, unless they had a filibuster-proof majority in the Senate the Republicans would still be able to block any and all tax increases.

    September 19, 2011 at 9:48 am | Reply
  19. oobie

    O'Hanlon is thinking outside the box.

    Sometimes, the fastest way to get somebody to change their mind is to give them exactly what they want.

    September 19, 2011 at 9:55 am | Reply
  20. indyjim

    Most of what our politicians do with "debt reduction" is smoke and mirrors. They need to balance the budget now. If our income is 10 percent less than our budget, then every department gets a 10 percent cut, including military, and even Social Security Payments. Everyone pays and suffers a bit now for the betterment of all in the long term. This is hard for a group of people concerned with getting re-elected, as we the people want more STUFF. We don't want less stuff, we don't want to feel pain, we want it all.

    September 19, 2011 at 10:14 am | Reply
  21. MONTE

    Let me get this straight; everybody favors higher taxes on the wealthy.
    Which means higher cost and lower return on investment and lower stock dividends and lower stock values, lower 401K and IRA payouts ok keep the drugs coming along with unemployment and bank credit dries up.

    In the real world with the tax increase; higher costs result in higher sales price
    lower return on investment and lower stock dividends and lower stock values ,lower 401K and IRA payouts ok keep the drugs coming along with unemployment and bank credit dries up because there is less to spend by consumer.

    The common time honored constant in higher cost of goods sold which always result sin the consumer paying more for goods and services.

    September 19, 2011 at 10:29 am | Reply
  22. keeth

    The super committee was destined to fail the moment Mitch McConnell nominated John "Not intended to be a factual statement" Kyl as a member. He's a joke and so is this committee.

    September 19, 2011 at 10:40 am | Reply
  23. MrFoobar2U

    remove the cap on the first 110K cap on social security contribution.
    Problem solved..

    Explanation: If you make 110K you pay the full 7.5% with your employer matching
    If you are bill gates, and you make 10MM per year, you still only pay the 7.5% on the first 110K

    Since the surplus is used for the general fund and replaced with treasuries (read IOU's), when I retire, they'll tell me there's no more $$$ in SSI.. if you're rich, hey.. you've gotten away without paying all that cash.. if you're poor, life is a handout.. if you're middle class.. you are screwed.

    September 19, 2011 at 10:41 am | Reply
  24. MrFoobar2U

    Hey Mitch.. how about the rich just paying as much as I do a a percentage of income...

    September 19, 2011 at 10:42 am | Reply
  25. Jack Be Humble

    History shows us (under the Clinton Administration) That the wealthiest Americans generate MORE jobs and MORE income when they are taxed MORE heavily. I believe this is because they see the taxes as a challenge to their income, so they work HARDER. At the lower tax rates, they look for ways to sock away the additional unearned revenue, which reduces their incentive to create jobs and work harder.

    September 19, 2011 at 11:04 am | Reply
    • Bob

      No, it works because if they don't reinvest their money it will be taxed. If they reinvest their money in their companies it is not taxed. So, because they are reinvesting they create jobs leading to more wages for their employees who will then pay additional taxes on their additional income. The workers are better off this way despite the fact that the wealthy may pay less in tax and the workers may pay more. I would rather pay more in income tax because of an increase in wages than pay less in taxes due to a decrease in wages.

      September 19, 2011 at 11:48 am | Reply
  26. Chas in Iowa

    The panel will not come to any agreement for any tax increases. If fact the GOP will push for more tax breaks for the job creators (GOP speak for the rich).The panel will fail and become political fodder for the 2112 election.
    Meanwhile the middle class will continue to spiral downward.
    Best solution I can see is for Washington to just go home until after the 2112 elections and for the sake of our country I hope we send the majority of the GOP packing for home so this country can begin to move forward again.

    September 19, 2011 at 11:09 am | Reply
  27. Nita

    Instead of calling the Obama plan to tax the rich "class warfare" call it Christianity. Christ said "Give to the poor", "take
    care of the widows" etc. Hey FAMILY VALUE GUYS(Republicans) listen up, this is your chance to show that you are the real thing.

    September 19, 2011 at 11:11 am | Reply
  28. Ernie

    This is a real nice article good facts, good predictions on what will happen. But when Obama was on the campaign trail when he wa runing for President he said that he would cut the "Defict" in half in his first 4 years as President. If I'm not mistaken that was not mentioned in this article. As of right now Obama has not kept his campaign promise and the "defict" has balloned. So now with the 2012 November Elections luming in the back ground Obama is coming with a plan I think it's a little late in the game. 3 trillion over 10 years this isn't going to happen. 10 years is too long, it should be done in 5 years. Don't forget Obama said he would cut the "Defict" in half in his first 4 years as President. He's gong to tax the rich people more and tax big business more. This is a huge mistake he making by taxing big business more. Big Business will not take all their company over seas to countries like China, Viet Nam, South Korea, Ireland where their tax sturcture and regulation fits what big business wants. So when more and more jobs are lost don't blame big business blame Obama because he's the one who want to tax, tax, tax. If this happens Obama wil be a "One and Done" President.

    September 19, 2011 at 11:16 am | Reply
    • AngryVote

      Ernie, I am also concerned about how "business friendly" this president has become. This tax mentality could become the bust that you predict. As a business owner myself, I don't know why I should hire in this environment. If I overload with employees and I can't make up the difference in sales, I put the existence of the entire company at risk. That is not good business. I started this business to make profits and margins are so low that I can't afford those risks. And if I will be taxed more, that lowers my margins even more. It certainly makes me think that companies that move jobs to markets where they can maximize profits are doing what is "their job" to maximize profits for their stockholders. As small as my company is, my only choice is to sell or close the doors. After 31 years, this is where my choices have led me.

      September 19, 2011 at 12:46 pm | Reply
  29. Bob

    Taxing the rich would create jobs because it would force them to reinvest in their companies instead of sitting on the cash as they are doing now. The progressive tax is basically a way of saying to the rich "reinvest your profits or else they will be taxed at a higher rate." The rich do not want to give the money to the government so they will reinvest and therefore jobs will be created.

    September 19, 2011 at 11:45 am | Reply
  30. rplat

    The only reason we have this ridiculous "debt panel" is because the lazy, gutless politicians in the White House and congress lack the courage to make the hard, necessary decisions. Every time a hard choice rears its ugly head all the politicians run all over each other looking for a scapegoat. This once great Republic is weak and sick.

    September 19, 2011 at 12:05 pm | Reply
    • AngryVote

      I agree with you on the lazy politicians. But a part of the problem is that the problem is so big. The flaws go so deep in past policies that it is hard to fix the problem. For example: we all know the tax code is broken and laddened with loopholes and garbage taxes/exemptions that were put on piecemeal over the years of ear marks. But it is tied so tightly to many other policies (i.e. funding SS and Medicare, highways, defense) that it is almost impossible to tear it down and fix the problems. We need leaders who have the courage to fix these problems and not hide behind a group that they are expecting votes from in whatever election is coming up next.

      September 19, 2011 at 12:25 pm | Reply
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