Rep. Jeb Hensarling, R-Texas, came as close to admitting that the Supercommittee will fail as any member of his Supercommittee colleagues to date. On the bright side, the chief economist of a major credit rating agency doesn’t expect the market to plunge in the event of a failure because investors have had low expectations for Congress all along.
“Nobody wants to give up hope,” Hensarling told Chris Wallace of Fox News Sunday, but he admitted that “reality, to some extent, [is] starting to overtake hope.”
Hensarling blamed Democratic intransigence on entitlement spending and their commitment to a $1 trillion tax increase. “Now, to their credit some of the Democrats were willing to put some aspects of health care on the table,” he added. “But at best, it would just kick the can down the road.”
Rep. Xavier Becerra, D-Calif., also serves on the debt committee. He told Wallace that Democrats as a whole were open to entitlement changes, depending on the package.
But Becerra was solidly opposed to any Social Security changes. “many of us have said, [Social Security reforms] should stay on the table. I’m going to fight like the Dickens to take it off,” he said, although he added that “a good package need not take away benefits away from seniors.”
Mark Zandi, chief economist at Moody’s Analytics, listened to the representatives before telling Wallace, “I don’t think there’d be much of a [market] reaction [to Supercommittee failure].” He explained that market changes are “all relative to expectations and investor expectations with regard to the committee I think are — have been and are still very, very low. I don’t think many expected much to come out of the process.”
Zandi added that “because it looks like the committee is going to punt, that we got some bigger problems ahead of us.”
