The supercommittee failed to meet its deadline for deciding where more than $1 trillion in cuts should fall. So now, agencies are bracing for what could be “across the board” cuts starting in January 2013.
“They are fairly draconian in terms of the percentage of across-the-board cuts, around 8-9 percent of agency budgets,” said Rep. Chris Van Hollen (D-Md.), who was a member of the supercommittee. “There’s not a lot of flexibility in the way that the cuts can be made.” Van Hollen spoke with the Federal Drive with Tom Temin and Amy Morris to share his disappointment in the supercommittee’s failure and the looming automatic cuts launched by the sequester.
If Congress is unable to come up with an alternative to the sequester before the 2012 presidential election, then it will have to work very quickly after the election to address the cuts. In any event, agency heads should prepare for the worst case scenario, Van Hollen said.
“While federal employees are prepared to do their fair share and bear their fair share of responsibility for tackling our nation’s deficit, they absolutely should not be singled out unfairly,” Van Hollen said. “And there are many proposals in Congress that would make federal employees scapegoats for problems that they have absolutely nothing to do with. That is simply unfair. People need to recognize the very important contributions our federal employees make to the success of our country.”
Before the supercommittee process began, Van Hollen had expressed some doubt about whether lawmakers would be able to accomplish what they set out to do. As the process proceeded, though, he saw glimmers of hope.
“I thought there might have been a little light at the end of the tunnel,” he said. “But, as soon as we saw a little bit of light, it would sort of get snuffed out. Looking back, the issue that we all raised from the beginning turned out to be the stumbling block, which is this tea party block of Republicans just refused to budge when it comes to taking a balanced approach.”
According to Van Hollen, the Democrats focused on the revenue side of the equation by asking people in the top 2 percent of the income ladder to pay what they were paying during the Clinton administration.
Democrats also wanted to close many of the corporate tax loopholes. Those ideas failed to garner any support from the Republican members of the supercommittee.
“They had this shell game whereby they said we’ll raise $250 billion with one hand, but with they other hand, they were going to take away $800 billion that would come in when the Bush tax cuts expired at the end of next year,” Van Hollen said. “They wanted to lock in $550 billion of tax cuts for the wealthiest Americans, and — that wasn’t all — they also said we had to drop the top rate from 35 percent today to 28 percent. The effect of that is to give the very wealthiest millionaires and billionaires a big tax cut. That was just not a good deal for the American people.”
Van Hollen doesn’t hold out much hope for Democrats and Republicans coming together on a balanced approach anytime soon.
“Supercommittee had these so-called super powers,” he said. “If we were able to come up with a recommendation, it would’ve been given an up or down vote in the House and the Senate. Through the normal process, there are a lot more opportunities for people to delay proceedings, especially in the Senate.”
Undoing the sequester
One approach Congress could take would be to simply undo the $1.2 trillion in automatic cuts.
Van Hollen considers that a bad idea. “It would immediately increase the deficit of the United States by $1.2 trillion and have a very bad effect in terms of the markets and ultimately the larger economy,” he said. “It would send a signal that the United States is just not serious about long-term deficit reduction.”
On the other hand, Van Hollen would support an effort to replace the current sequester with an alternative method of achieving the $1.2 trillion in deficit reductions. Of course, that’s what the supercommittee tried and failed to do.
“I’m not sure I’m hopeful that you’ll have a replacement for the sequester until after the election of next November,” he said. At that time, Congress will be staring down both the sequester and the end of the Bush tax cuts for both higher- and middle-income Americans.
Tom Temin is the host of The Federal Drive, which airs from 6-9 a.m. on 1500 AM in the Washington, DC region and online everywhere. Tom has 30 years experience in journalism, mostly in technology markets. Before coming to Federal News Radio, he was a long-serving editor-in-chief of Government Computer News and Washington Technology magazines.