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A debt-reduction committee with special powers that was supposed to dissolve congressional gridlock in Washington is instead on the brink of failure, setting the stage for $1.2 trillion in automatic spending cuts.
The 12-member bipartisan supercommittee likely will announce today that it can’t reach agreement on deficit savings, according to a Democratic aide. The aide, who wasn’t authorized to discuss internal matters publicly and requested not to be identified, said in an e-mail that it was highly unlikely that the committee’s talks could be salvaged.
Today is the deadline for the Congressional Budget Office to receive information for scoring a proposal in advance of the supercommittee’s Nov. 23 target date for reaching a deal. Republican Senate Minority Leader Mitch McConnell has declared over the past few months that failure is “not an option” for the panel, created in August after rancorous debate over raising the nation’s borrowing limit that plunged congressional approval ratings to lows of between 9 percent and 14 percent.
If the committee doesn’t come up with an agreement, $1.2 trillion in across-the-board spending cuts to domestic and defense programs are set to take effect starting in January 2013. The lack of a deal would deprive President Barack Obama of a vehicle extending a payroll tax cut and insurance benefits for unemployed Americans, which expire at the end of the year
Changes in spending from sequestration result in new budget projections below the CBO’s baseline projection of spending based on current law. The federal government would spend $3.62 trillion in 2013, the first year with sequestration, versus the $3.69 trillion projected by CBO. Total spending in FY2012 will be $3.61. By 2021, the government would spend $5.26 trillion versus the $5.41 trillion projected. Overall, without a sequester, federal spending would increase $1.8 trillion (blue line) between FY2012 and FY2013. With a sequester, federal spending would increase by $1.65 trillion (red line).
A further breakdown of the percentage of budget programs reveals that sequestration provides relatively small reductions in spending rates across the board. Between 2012 and 2021 with sequestration, defense increases 16% (vs. 23%); nondefense discretionary increases 6% (vs. 12%); Medicare increases 71% (vs. 74%); and net interest increases 160% (vs. 179%).
As we can see, under sequestration, spending in each categories would go up. The only reduction would be a reduction in the growth rate of spending—which is quite different from a spending cut.
Originally posted by illuminatislave
reply to post by beezzer
A rise in the payroll tax along with dropping millions off of unemployment is a victory for Obama?