It’s official: after months of negotiations, the mighty Congressional “super committee” on deficit reduction has struck out. For the next few days reporters will dutifully chronicle the finger-pointing while commentators lament the sad reality of a dysfunctional Washington, even though this result was perfectly predictable to everybody well in advance. I offered my contribution to this genre last Friday, reflecting on whether it’s ever actually possible for Congress to reduce spending. But for all the huffing and puffing about this failure, the reality is that the sides have fundamental disagreements. And the reason why each party has become a lot more partisan in recent years is that the long-term debt crisis and the accompanying economic problems are so significant, that the way we respond will lead America down dramatically different paths.
In the past, compromise may have been more possible, because the problems weren’t as severe — and it was easier to paper over differences. Republicans acquiesced to — and actively promoted — the growth of the welfare state even while cutting taxes, because they could have it both ways. But the explosion of debt in the recent years, combined with the emergence of the Tea Party, forced Republicans to recognize that the only way to avoid massive future tax cuts would be to begin to get serious about reining in the growth of the nation’s entitlement programs. By contrast, Democrats want to maintain — ideally, expand — the burgeoning welfare state. And even maintaining the status quo would require drastically higher taxes. Democrats want to break the GOP’s back on tax increases, only to set the precedent for the bigger battles to come in the future.
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So ultimately, everything comes down to the question: do Americans want a government that does more and costs them more, or one that does less and costs them less?
The parties are too far apart to reach any compromise, especially in the upcoming election year. So, for anything to happen, one side will either have to win the political argument. Or, alternatively, we’ll have to wait for a financial collapse triggered by our debt crisis and reach a grand bargain under emergency conditions. Until one of those things happens, the failure of the “super committee” is likely a harbinger of things to come.
