11/21/2011 08:53 pm ET Updated Jan 21, 2012

Failure Is an Option

Forget the doomsday scenarios for the so-called Super Committee's failure to agree on debt reduction. Congress set this thing up to fail by making sure the consequences are not really as severe as advertised, leaving plenty of time for lawmakers to change anything they like. And President Obama's threat today to veto changes is meaningless because even if Congress does nothing right now the automatic cuts that would take effect over the next two years are minuscule.

This is such silly political theater it would make Vaudeville blush.

It's why liberals were wrong to assume that President Obama lost a big battle last summer when he agreed to the committee's creation -- and conservatives were wrong to declare victory.

Consider the various ways that pain was postponed in the legislation setting up the panel.

If the Committee doesn't produce a bill, the bill is not enacted or the bill produces less than $1.2 trillion in savings, 1) the debt ceiling increases by $1.2 trillion, subject to a disapproval vote, and 2) $1.2 trillion in across-the-board cuts will be triggered between FY2013-2021.

For starters, the disapproval vote on raising the debt ceiling is meaningless. If majorities of the House and Senate try to block the increase President Obama can just veto it, requiring an unlikely two-thirds vote to override. How ironic that the most immediate and certain effect of this much-hyped "debt reduction" strategy is to actually make it easier to borrow more money.

Notice that the automatic cuts triggered by failure would not even begin taking effect until after the next election, and are spread out over the next 8 years -- more than enough time for Congress to fiddle with, or completely scrap these cuts.

If across-the-board cuts are triggered, Social Security, Medicare, Medicaid, and other low-income benefits are exempted from cuts. (Exception: Medicare provider payments can be cut by up to 2%.) Half of the cuts will come from defense spending.

Here we find that the easy path to avoid major entitlement reform is for this committee to fail. Only Medicare doctors and other providers would be affected by automatic cuts -- and their payments would only be cut by no more than two percent. But these automatic payment cuts have been tried many times and Congress usually finds a way out.

Basically, the "pain" of failure for this committee was so cleverly postponed and distributed across future years that failing could be the least painful choice for Washington -- and that's no accident.

Discretionary Caps

$1 trillion in across-the-board discretionary cuts for fiscal years 2012-2021. The cuts are weighted to be the deepest after FY2014. The first two years, the cuts are only $10 billion total and security (defense, homeland security, etc.,) is $5 billion of that.

Look carefully at that last sentence. All the boasting by Obama and congressional leaders about immediately cutting $1 trillion really means that the vast majority of the cuts do not even begin until after the next election. The result is that the only immediate budgetary effect of this legislation is $10 billion in cuts over the next two years -- such a tiny fraction of overall federal spending that it is hardly worth talking about.

Once again Congress managed to dodge a public outcry by appearing to do something until demand for action wanes. It's about the only thing Capitol Hill does well.

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