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The Upside of the Supercommittee's Failure: A Real Debate on Tax Cuts

We're much more likely to get a good deal from next year's election than from some "grand bargain" from the super committee.

So the supercommittee wasn't so super after all. Is anyone truly surprised that a group of senators and representatives—half Republicans, half Democrats—failed to solve the same issues on which their full bodies had come up empty after months of debate? No plan that included raising taxes on the wealthiest Americans had a chance of earning Republican support, and one with enough domestic spending cuts to render those increases unnecessary wasn't going to attract any Democrats. Bipartisan cooperation is so much easier in theory than in real-world Capitol Hill conference rooms.


But while it's easy to get depressed about the triumph of partisan gridlock, we're much more likely to get a good deal from next year's election than from some "grand bargain" from the supercommittee. In their failure to reach a consensus, the 12 members handpicked by their respective party leaders are all but ensuring that the 2012 election will be a referendum on the Bush tax cuts for people making more than $250,000 a year. It's an election debate we should be eager to have.

The official consequence of the supercommittee's failure to reach a deal is $1.2 trillion in cuts, half to defense spending and half to domestic programs, over the course of 10 years. Some important social programs—like Social Security, Medicaid, food stamps, and children's health insurance—would be protected, while budgets for the Border Patrol, Justice Department, Transportation Security Administration, and other agencies would take hits in the first year. It's likely that that total package of cuts would be better than whatever the supercommittee compromised on—a 2 percent cut to Medicare reimbursement rates and a likely loss of jobs notwithstanding—but it doesn't matter either way. The automatic cuts wouldn't take effect until January 2013, and the key underlying issue will be worked out three months before that.

Congress might be divided over raising taxes on the wealthy, but most of America is in favor of the idea. Nearly 70 percent of Americans support repealing Bush's tax cuts, including the majority of Republicans. Now those majorities can safely blame congressional dysfunction for the failure to approve small increases, and they can vote next year for presidential and Congressional candidates who acknowledge the overwhelming economic evidence that significant spending cuts would damage national growth while increasing taxes on the wealthy would not.

By the time the tax cuts expire in December 2012, a new Congress will be in place—and assuming Americans vote the way they say they will, that Congress will not attempt to ram through an extension of the Bush cuts. That will accomplish what no supercommittee could: finally putting the country on the road to real economic recovery.

Photo via (cc) Flickr user Fibonacci Blue

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