In a move that is surprising to almost no one who has been following United States politics, the United States Super Committee has plans to announce on Monday that it has failed to complete its charge of tackling the mounting debt issue in the US.
On track to declare defeat, the twelve member committee has been in talks for the last three months in an effort to find $1.2 trillion in budget cuts over the next ten years. The members of the committee were continuing to talk in the hours leading up to the committee’s statement, although members of the Super committee have warned not to be too optimistic.
Fortunately – or unfortunately – the citizens of the United States are painfully familiar with their governments inability to agree on anything except that there is a United States of America, and that we are all currently in it.
This latest failure on the part of government officials is another sign that lawmakers in the US are too set in their ways to make the necessary increases in taxes and cuts to the budget that experts say are needed to get the country back on the path to stability and prosperity, much to the frustration of the American voting public.
As government leaders turn their attention to the upcoming congressional and presidential elections in 2012, the earliest that lawmakers could return to the problem may be 2013. After August nearly saw the government’s close call with default, and the United States’ subsequent credit downgrade, voters and investors are becoming increasingly more and more disenchanted with a highly dysfunctional Washington.
News Of Collapse Of Super Committee Sends Markets Lower
The coming months are expected to see even more of these skirmishes over the US budget. The short-term extension of economic stimulus measures – payroll tax cuts and extended unemployment for example – will be attempted by Democratic members. These provisions were hoped to be included in the deal made by the Super Committee.
If these economic stimulus measures were allowed to expire at the end of this year, analysts warn that the US economy could slip back into another recession. News of the collapse of the Super Committee weighed on equities markets and send stocks trending downward on Monday, with the Dow Jones Industrial Average off by more than 300 points in mid-day trading.
While the expectations for the Super Committee were low to say the least, the failure of the committee serves as a painful reminder to investors of the risks associated with a gridlocked the US government – widely considered a relative safe-have in light of the ongoing European debt crisis.
The Super Committee was set up last summer by United States lawmakers in the midst of a bitter fight over the US budget that resulted in the loss of the United States’ Standard & Poor’s AAA credit rating. It was expected that the committee would be able to accomplish the kinds of reforms that had eluded Speaker of the House John Boehner and US President Barack Obama.
Super committee Members Fear Political Fall-Out
Last week, the debt load reached $15 trillion, which is equal to the size of the United States economy, giving the Super Committee the task of finding a minimum of $1.2 trillion in savings in the US budget. Even after several attempts to reconcile a plan, lawmakers are expected to ultimately prove that they are unwilling to compromise on key party issues ahead of next years elections.
There is no doubt that United States lawmakers are keeping in mind the political fall-out that has happened from budget deals in the past that have led to party rebellion and political defeat.
The unfortunate reality in politics is that long-term solutions are bad for short-term political careers, and congressional leaders and members of government fear that compromise on key issues could result in career suicide.