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This time, the debt deadline comes with asterisks and outs

WASHINGTON — Sen. Patty Murray, the lead Democrat on the debt "supercommittee," strode stone-faced past a pack of reporters.

"Her lips did not move!" a CNN producer shouted to the press corps scrambling to keep up Tuesday afternoon, desperate for news.

It feels like deja vu in the U.S. Capitol. Yet another deadline is fast approaching on a budget-cutting deal with no sign of progress, only a growing sense of disagreement and drama.

Only it's not that way. The stakes are monumental but the urgency of the last two fights is absent even as time is running out for the supercommittee to agree on a plan to cut at least $1.2 trillion.

"Why should there be any urgency? Nothing bad happens if they don't succeed," said Stan Collender, a former House and Senate budget staffer. "Here, a couple people say they're disappointed and they go home."

Unlike April, when the government nearly shutdown over lack of funding and again in August when it almost defaulted on its obligations because lawmakers refused (then relented) to lift the so-called debt ceiling, the consequences this time are delayed.

If the 12-member Joint Select Committee on Deficit Reduction cannot agree on a deal by Nov. 23, it will set off a built-in "trigger" mandating $1.2 trillion in across-the-board reductions over the next decade.

But those cuts, officially called sequestration, would not begin until January 2013.

"There is a year to work out the problems," said Sen. Dianne Feinstein, D-Calif., chair of the intelligence committee, who like a lot of her colleagues seemed at ease this week despite a swirl of reporters around her.

President Barack Obama has urged lawmakers to "bite the bullet" and hammer out a compromise. But Obama has kept a safe distance from the talks, a sharp departure from the last two budget crises.

Already lawmakers are scheming ways to undo the automatic cuts because they strike at sacred cows of both parties: defense (Republicans) and domestic programs (Democrats).

The pressure is also off because there is little threat the nation's creditworthiness will be downgraded, as Standard & Poor's did after the August debt ceiling debacle. (As it stands now, Congress will have about a year before another vote to increase the borrowing limit.)

"As $1.2 trillion in further deficit reduction has already been legislated through automatic spending caps if no agreement is reached, failure by the committee to reach agreement would not by itself lead to a rating change," Moody's Investors Service said in a report last week.

That could change if the automatic cuts are sidestepped, but for now it remains a distant threat.

Meanwhile, the clock keeps ticking toward the Nov. 23 deadline, which is realistically two days earlier because the plan must be on paper and analyzed by the Congressional Budget Office.

If a deal is reached, the full Congress has until Dec. 23 to take a straight up-or-down vote. Filibustering or amendments would not be allowed.

"There's always a chance that something will happen," Collender said. "But I think this has largely been going through the motions. The amazing thing is that anyone thought this would succeed at all."

There are several possible outcomes: A deal, no deal or a punt. The committee could agree to cuts but leave the revenue details up to the House and Senate tax writing committees.

The obstacles were clear from the creation of the supercommittee in August. Republicans said any talk of new taxes was a non-starter. Democrats, in turn, felt enormous outside pressure to protect Medicare, Medicaid and Social Security.

Democrats tried to go big, offering $2.3 trillion in cuts, including $1 trillion in new tax revenue. Republicans later offered up a $1.5 trillion plan that included $300 billion in new revenue, but only if the Bush-era tax cuts were permanently extended. The cuts, which have helped deepen the deficit, are set to expire at the end of next year.

As panel members meet behind closed doors, snacking on granola bars and gourmet cupcakes, the noise outside grows angrier, with each side accusing the other of posturing and urging their respective committee members to dig in.

The liberal group on Wednesday launched a national TV ad that asks Democrats on the panel if they are "crazy or just plain stupid?" for considering entitlement cuts. A group of millionaires took the Capitol hallways, urging Congress to increase their taxes. But Republicans face pressure to adhere to the no-tax pledge they have signed en masse.

So it should be little surprise that progress seems at a standstill. Committee members themselves sounded unsure what the next few days hold while still grasping onto hope.

"We believe that we can get there," Murray, the Democrat from Washington state who co-chairs the panel, told reporters Wednesday. "I am still hopeful that the Republicans will see their way to bringing to us a real revenue package and that's what all of us are looking for in terms of fair and balance."

• • •

The lack of urgency masks the seriousness of the problem. The national debt officially hit $15 trillion on Wednesday and is expected to keep growing at unsafe levels unless spending is controlled or more revenue is brought in.

"Here we have an underlying unsustainable, structural budget deficit problem, which basically means it's on a death spiral if you don't do something," said Robert Bixby, executive director of the Concord Coalition, a nonpartisan group focused on fiscal responsibility.

Republicans and Democrats alike worry about doing nothing.

"I am concerned about the psychological impact on our economy that a failure of this process to act could have. Very concerned," said Sen. Marco Rubio, R-Fla.

Rubio, though, voted against creating the supercommittee, saying the big decisions should be made by all of Congress, not a select group of 12.

But many think that if the supercommittee cannot agree, then there is no hope Congress can. Unless, perhaps, the deadline carries real and immediate risks.

Alex Leary can be reached at Follow him on Twitter @learyspt.

This time, the debt deadline comes with asterisks and outs 11/16/11 [Last modified: Wednesday, November 16, 2011 10:42pm]
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