Big Cuts Loom as the Clock Ticks for Supercommitee

By Gregory Korte

WASHINGTON -- In Greek legend, the tyrant Dionysius the Younger tied the end of a sword to a horse's hair and propped it over the head of Damocles to prove a point about the perils of power.

In today's Washington, that "Sword of Damocles" takes the form of automatic, across the board spending cuts if Congress can't agree to at least $1.2 trillion in deficit reduction. And as the first key deadline to avoid those cuts looms just days away, the 12-member deficit reduction "supercommittee" is playing tug-of-war with the horse's hair.

Those automatic spending cuts -- "sequestration," in Washington lingo -- were a key part of the debt limit deal that brought about the supercommittee in August. Members of Congress have repeatedly employed the "Sword of Damocles" metaphor to explain how the trigger works.

"It's an irrational kind of an approach, whose purpose is to be avoided," says Sen. Carl Levin, D-Mich., explaining the concept last week. "Its (the trigger for automatic cuts) purpose is to deter something from happening or to give an incentive for something to happen."

After months of secrecy, the six Democrats and six Republicans on the supercommittee have been increasingly vocal this week.

Co-chairman Rep. Jeb Hensarling, R-Texas, told CNBC that negotiations are "stymied" because "Democrats won't put a plan on the table to solve the problem." Rep. Chris Van Hollen, D-Md., said Republicans were drawing a "hard line in the sand" over taxes and suggested that the GOP stance was "take it or leave it."

One compromise being floated publicly is from committee member Sen. Pat Toomey, R-Pa. He would combine $750 billion in spending cuts, $500 billion in new revenues and $200 billion in interest savings in a package worth almost $1.5 trillion in deficit reduction.
Next Wednesday is the deadline for the supercommittee to make its proposal. But if a deal is to be made, details could emerge by Monday, because the law requires committee members to have budget estimates 48 hours before voting. Congress would then have until Christmas to pass that proposal on an up-or-down vote -- no amendments, and no filibusters.

The automatic cuts were designed as a backup plan, to be equally unpalatable to Democrats and Republicans: $600 billion to domestic discretionary spending, and $600 billion to defense spending. The cuts would be spread out over nine years starting in 2013.

Because they're across-the-board, the Obama administration would have little control over how to implement them. One report by Democrats on the House Appropriations Committee estimates those cuts would lay off 3,500 border agents, close 246 air-traffic control towers, allow 100,000 fewer students in Head Start and -- hitting closer to Capitol Hill -- result in the loss of about two staffers per congressmember.

Secretary of Defense Leon Panetta told Congress in a letter this week that the automatic defense cuts would be similarly devastating -- particularly because the reductions would indiscriminately cut every account, effectively canceling entire programs. "You cannot buy three quarters of a ship or a building," he said.

Some Republicans, such as Sen. Jon Kyl, R-Ariz., a supercomittee member, have suggested undoing the automatic cuts if Congress can't reach a deal.

But in a phone call to the supercommittee's co-chairs last week, President Obama threatened to veto any attempt to "turn off" any part of the automatic cuts.

"The sequester was agreed to by both parties to ensure there was a meaningful enforcement mechanism to force a result from the Committee," said a statement from the White House. "Congress must not shirk its responsibilities."

A bipartisan coalition of deficit hawks that have dubbed themselves the "Go Big" coalition echoed that sentiment this week.

"Failure can't be an option. The whole rest of the world is watching," said Sen. Mark Warner, D-Va. "And, whether we like it or not, this debt and deficit debate has become, in effect, the proxy for whether our democratic institutions are up to the job in the 21st century."


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