By Chris Copsey, Legislative Research Director  & Paul Theobald, Intern, University of Texas, Austin Office 

The United States Congress Joint Select Committee on Deficit Reduction (JSC), better known as the ‘Supercommittee’, was created by the Budget Control Act of 2011 (BCA), enacted into law on August 2, 2011. Failure to pass the BCA was what would have resulted, according to President Obama, in the United States of America defaulting on its debts. The BCA increased the debt ceiling by $400B, with the option for a greater increase provided certain requirements are met, while cutting spending over the next decade by approximately $900B. In addition, the JSC was created and tasked with cutting an additional $1.2T over the next decade.
 
As stated previously, the JSC itself was officially created by the BCA. It was established with the goal of improving both the short and long term financial outlook of the US and reducing the deficit “...by at least $1,500,000,000 over the period of fiscal years 2012 to 2021” (BCA Title IV SEC 401(b)(2)). In addition, it was given the power to subpoena witnesses, papers, reports, and other necessary information that the joint committee considers advisable.
 
The BCA set several deadlines for the operation of this committee.

• The first official meeting of the JSC occurred on September 8, 2011 and the termination for the JSC was set for January 31, 2012 (note that the deadline for legislation to be enacted in the same bill is set for January 15, 2012). 
• All Senate and House Committees were given a deadline of October 14, 2011 to transfer their recommendations to the JSC, although none were required to do so. 
• The Congressional Budget Office was tasked with providing estimates of the impact of the JSC’s proposed legislation towards the deficit reduction both during the decade, and after 2021. The JSC was prohibited on voting for final legislation until the CBO’s estimates have been made available to all members 48 hours prior to a vote as certified by the co-chairs. 

With the deadline given for the JSC to vote on final legislation being November 23, 2011, these CBO reports would have to be submitted by midnight of November 21, 2011, a date that has come and gone.
 
This report, due by November 23, 2011, would have been required to be passed by a majority of the JSC, which would be 7 out of the 12 members. Immediately upon this vote and passage, the full report and legislative wording, as well as a record of the vote, is required to be made public, according to the law. The report, which must be a detailed analysis including legislative language which Congress is to vote on, is allowed to contain a minority report from the 5 or less members of the minority detailing alternatives not accepted by the majority. The deadline for legislation to be enacted was January 15, 2012.
 
So, what is the makeup of the JSC? Each Chamber was tasked with supplying 6 members, with the Majority and Minority leaders of each picking 3. On the Democratic side, the members are Senators Patty Murray (WA), Max Baucus (MT), and John Kerry (MA), and Representatives Xavier Becerra (CA), Jim Clyburn (SC), and Chris Van Hollen (MD). For the Republicans, the members are Senators Jon Kyl (AZ), Rob Portman (OH), and Pat Toomey (PA), and Representatives Jeb Hensarling (TX), Fred Upton (MI), and Dave Camp (MI).

Sen. Toomey proposed one of the plans discussed, of which details are available. This called for, among other things, “raising revenue” by way of limiting tax breaks utilized by taxpayers who itemize their taxes.1 Furthermore, the top tax rate would drop to 28 percent, for high-income earners.2 All together, $400 billion would be raised by the Toomey plan, which, along with $800 billion in spending cuts, would add up to the minimum $1.2 trillion of reduction that the committee was charged with finding.3

One area of contention between Democrats and Republicans was the survival of the Bush-era tax cuts for wealthy Americans. The Toomey plan would make these cuts permanent. Democrats, however, drew an ideological line in the sand over the cuts. Supercommittee member Sen. John Kerry saying here that “…we cannot in good conscience extend the Bush tax cuts at the higher end when we are at a 60-year low in terms of the revenue coming in to the government.”

One area of agreement, according to Sen. Jon Kyl, was over corporate taxes, found here: “Incidentally on the corporate side there was agreement by both Democrats and Republicans that we should have corporate tax reform that would take the top corporate rate down to perhaps 25 percent if we can get it there so that our country can be more competitive internationally. On that there was agreement.”

In the event of a JSC failure, certain “triggers” were put into place to enact automatic cuts. The cuts are divided according to a complicated formula, and must be applied to each fiscal year’s budget by Congress. The cuts, not taking effect until January of 2013, will add up to $1.2 trillion in cuts over the next decade, making cuts in many programs, including defense spending, and Medicare.4

Given that the JSC has officially declared defeat, politicians in Washington are scrambling to figure out what to do next. Do you have a suggestion for them? As always, you can find your representatives’ contact information on our website by typing in your zip code in our search bar.
 

1. http://www.nola.com/politics/index.ssf/2011/11/a_gop_debt_plan_would_hit_some.html
2. http://www.post-gazette.com/pg/11316/1189456-84-0.stm?cmpid=nationworld.xml
3. http://www.cnn.com/2011/11/21/politics/super-committee/index.html
4. http://www.ctmirror.org/story/14584/super-committee-inaction-triggers-cuts-uncertainty

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