The Super Committee and the Budget: What Would Failure Really Mean?

The Congressional budgetary Super Committee Report is due on Wednesday. Expectations for success are low. Talk about the possibility of another U.S. bond downgrade is widespread. But what exactly would "failure" really consist of?

THOMAS FERGUSON, thomas.ferguson@umb.edu
Ferguson is professor of political science at the University of Massachusetts, Boston and a senior fellow of the Roosevelt Institute. He said today: "As a case study of a broken political system, you'll never see a clearer case than the Congressional budgetary Super Committee. Essentially every poll shows that about two thirds of all Americans want taxes raised on the wealthy -- even a majority of Republicans. By four-to-one or better, voters reject cuts in Social Security or Medicare. But Democrats keep offering to cut, while Republicans draw lines in the sand on taxes.

"The economic arguments put forward to justify all this are laughable. Read the fine print on the 'crisis' in Social Security and you discover that even critics, such as Peter Orszag (President Obama's former OMB chief), admit that under their pessimistic assumptions Social Security payments might rise by all of one percent of GDP by 2050! Social Security is obviously a non-problem, especially in the middle of the Great Recession.

"Health care and military are different. Both are industries in which true competition is rare. In both, the policy challenge is to face down oligopolies protected by powerful lobbies. Congress could, for example, save trillions of dollars in the long run by allowing the government to bargain down pharmaceutical prices, junking 'fee for service' pricing, requiring a single, integrated system for billing and reporting, banning obvious conflicts of interests such physicians owning shares in testing companies, and requiring serious cost comparisons of what treatments really work.

But these steps, like seriously rethinking American military strategy, don't seem to be on the agenda of a Congress that openly sells leadership and committee posts to the highest bidders and luxuriates in insider stock trades."

Ferguson's study, coauthored with Robert Johnson, of U.S. deficit and budgetary problems, is available here in PDF.

His recent studies of Congress and money have appeared in the Financial Times and the Washington Spectator.