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The Final Days of the Supercommittee

Posted by Elyssa Koidin  

05:11 PM Nov 17, 2011

Time is running out for the Joint Select Committee on Deficit Reduction (or the Supercommittee) to reach a deal that reduces the deficit by $1.2 trillion. On November 23rd the Supercommittee will reach its official deadline to approve a proposal. The Supercommittee continues to meet, mostly behind closed doors, and to make proposals. So far each plan introduced by one of the Committee’s twelve members has been struck down by members of the opposition party.

The most recent plan from Senator Toomey (PA-R) proposes some revenue (a sticking point for the negotiations) mostly by closing tax loopholes, but he also proposes to make the Bush Tax Cuts permanent—a non-starter for many Democrats. Toomey’s plan would also make $635 billion in cuts to mandatory programs, half of which would come from spending cuts to Medicaid and Medicare. An additional $240 billion would come from discretionary programs like LIHEAP, housing assistance, and education programs. According to the Center on Budget and Policy Priorities, low-and moderate-income Americans would disproportionately bear the brunt of these cuts.

Some Democrats on the Supercommittee, led by Senator Baucus (MT-D), have also proposed a deal, which includes $1 trillion in revenues and $1 trillion in spending cuts. A large portion of the spending cuts come from reductions in healthcare programs, including $350 billion in Medicare cuts and $50 billion in Medicaid cuts. There are additionally $400 billion in discretionary cuts, likely split evenly between defense and non-defense cuts.
Both plans are far more conservative than those reported out of other bi-partisan deficit reduction groups such as Bowles-Simpson, Rivlin-Domenici, and the Gang of Six. The various plans proposed also use multiple ways of calculating revenue—resulting in some plans having technically more revenue than others.

With one week to go, we are likely to see more proposals coming out of the Supercommittee, but they are unlikely to advance plans on which both sides can agree. These proposals will likely just be used to set priorities. It is still very much up in the air whether or not a final deal will be able to be reached by next Wednesday. If the Supercommittee fails to reach an agreement, a sequester will go into effect January 2013 with $1.2 trillion in cuts, as required under the Budget Control Act. Certain programs like SNAP, Medicaid, and Social Security are protected from the sequester. But other programs like WIC, housing assistance, LIHEAP, and defense funding will experience an across the board cut. There are some who believe that many anti-poverty programs will fare better under a sequester since so many important human needs programs are protected (especially if they are not protected in a Supercommittee deal) and because Congress has an entire year to produce a $1.2 deficit reduction plan that would prevent the cuts from going to effect.

The JCPA is encouraging people to reach out to their Members of Congress and tell them to “protect SNAP, Medicaid, and other vital human needs programs from deficit reduction cuts.”

In addition, the Domestic Human Needs (DHN) coalition and the faith community will be holding a webinar on November 29th at noon EST to explain what (if any) decision was reached by the Supercommittee and what it means for our priorities moving forward. Please save the date and we will circulate more info in JCPActs closer to the date.

For more information on these issues please contact Elyssa Koidin.

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