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Friday, August 19, 2011

Super Committee, Will It Succeed?

The Super Committee has been given the task of designing a bill to achieve $1.5 trillion or more in deficit reductions over the next 10 years.  They must submit a report by Thanksgiving. If they can reach agreement there will be an up or down vote in both chambers by Dec. 23, 2011. There will be no amendments, debate, hearings and best of all no filibuster.
The Super Committee can scrutinize the whole budget but The Hoss wonders if they will consider reducing the salaries, Medicare or pension benefits for Senators and Congressmen, or will they stick to the main big ticket items such as defense spending, Social Security, Medicare and Medicaid. What about increasing tax revenues, either by increasing taxes or eliminating tax loop holes?
Given that all six of the Republicans have indicated that tax increases are not on the table it is not clear whether or not one or two may be persuaded to increases revenues by eliminating or reducing home mortgage deduction, the deduction for employers who offer health care to their workers, or the retirement deduction. If so, a deal may be possible, as there should not be a problem in the Super committee members agreeing on cuts to Defense, Medicare and Medicaid.  Remember a simple majority is all that is needed to be able to bring a report which will be voted on.
If the Super Committee fails to agree or if Congress rejects its recommendations, then  across-the-board cuts of $1.2 trillion, equally divided between defense and domestic programs would be implemented.. However, certain entitlement programs such as Social Security, Medicaid, veterans benefits, and other “essential” programs would be exempt. Something The Hoss believes the Republicans will find unacceptable. Therefore, The Hoss predicts a plan will be presented and passed.
Stay on Track,Money Magazine Hoss

Next Hoss Cents Free Financial Money Magazine Post August 2011

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