About That "Super Committee"

August 2nd, 2011

Jonathan Chait sees a potential silver lining for Democratic priorities:

"I actually think the design of this plan is fascinating. You take a couple of the most powerful forces preventing major policy change -- partisan gridlock and special interest influence -- and turn them into forces for change by rejiggering the default setting."

"It's going to get interesting. Liberals widely assume they'll just get rolled once again, as Republicans will insist on zero revenue, and Democrats will cave. I'm not so sure. For one thing, the trigger really is finally balanced. Last December, inaction on taxes meant an economy-crushing tax hike at a really bad time for Democrats. This summer, inaction on the debt ceiling meant economic cataclysm at an even worse time, the cost of which would mostly be born by President Obama. But the inaction trigger in the fall will be something genuinely painful to both parties.

The anti-tax movement has held absolute sway within the GOP for two decades. But it's worth noting that the GOP has never had to choose among its constituencies in a zero-sum fiscal environment before. The policy of huge tax cuts and big defense spending hikes could coexist as long as Republicans could just run up the budget deficit. The party refused to reconcile its contradictions by refusing to acknowledge fiscal reality. Higher revenue to pay for the wars? Reagan proved deficits don't matter. It's easy to hold all your factions together when you refusing to acknowledge basic accounting properties (deficits equal expenditures minus revenue, not just "too much" expenditures by definition.) George W. Bush made the defense hawks happy, made the medical industry happy with a prescription drug bill designed to maximize their profits, and made rich people in general happy with a series of regressive tax cuts.

But imagine Democrats insist on higher revenue, and they decide, sensibly enough, that failure to cut a bipartisan deal is better than $1.8 trillion in cuts. (Which is probably is.) Then what? Well, then the entire defense lobby plus the entire medical and insurance lobbies turn fiercely against the very people with whom they had marched shoulder-to-shoulder under Bush. If the Democrats hold the line and insist on more revenue, the committee has the potential to split the GOP coalition wide open."

Igor Volsky is concerned about the impact the committe will have on health care and justifiably so. Yet, even he sees some room for optimism:

"But the committee could also offer proposals to hasten the kind of delivery and payment reforms that are already part of the Affordable Care Act. These changes would not be so much about slashing reimbursement rates as they would be about paying providers differently to encourage them to provide more efficient care. It’s a tricky thing to figure out — particularly since nobody is quite sure how to reform and modernize the health care reimbursement system — but one policy makers should at least consider if they’re truly interested in lowering health care costs over the long haul. What’s a good place to start? All-payer rate setting."

In spite of my deep misgivings regarding this new congressional device, it is actually quite plausible that it can achieve effect cost control over health care in ways that have been wholly elusive previously.

Sullivan says "in some ways, this agreement is the final nail in the coffin for neoconservatism."

God. Let's hope so.