Super Committee Post-Mortem

Published November 23, 2011

Health Affairs Blog

The Joint Select Committee on Deficit Reduction wasn't dubbed the “super committee” for nothing.

In theory at least, it had immense and unprecedented power. If the select committee had been able to produce a consensus plan on deficit reduction, that legislation would have been guaranteed an up or down vote in the House and Senate—with no amendments allowed from the other duly elected members of either body. No corner of the federal budget was beyond its potential reach. It had the power to change tax laws, Social Security, Medicare, Medicaid and every other program too. And once the committee settled on a deficit-cutting plan, the super committee's recommendations would have been rushed to the House and Senate floors for votes, with just one month separating the deadline for committee action from the final votes in Congress. That would have made it very difficult for opponents of the plan to get organized and stop it. In sum, the super committee was twelve members with the power to literally rewrite U.S. fiscal policy from top to bottom—all in one piece of highly privileged legislation.

All that was needed to unlock this unusual concentration of power was seven votes. The debt ceiling legislation which created the super committee stipulated that seven of the twelve committee members had to agree to a deficit reduction plan before it could be “fast-tracked” in the House and Senate. It further stipulated that the twelve super committee members would be appointed by the respective House and Senate party leaders (with three appointments coming from each). This meant that the committee would have six Democrats and six Republican members, and that the seven-vote requirement would preclude the committee from advancing any proposal that did not have some level of bipartisan support behind it.

Of course, in the end, that proved to be a bridge too far. The super committee disbanded this week without reaching a deal, dashing the hopes of many who saw it as a once-in-a-generation opportunity to make big and dramatic changes in federal spending and tax policy.

In reality, though, there never should have been much hope that the super committee would succeed. That's because, despite the power handed over to it, the committee was operating in an environment marked by a deep partisan divide over fiscal policy. Yes, the committee had the theoretical power to write any bill it wanted. But that wouldn't guarantee passage in the House and Senate. The rank-and-file members would still need to support it, which meant that the super committee members really could not stray too far from the balance of opinion in their respective party caucuses.

Much has been written and said in recent days about the divide over taxes. And it is true that differences over tax policy contributed mightily to the stalemate.

But it is also true that there are deep and fundamental disagreements over health care policy—disagreements that run so deep that even if there had been a meeting of the minds on taxes, a deal may not have been struck.

The problems start with the Patient Protection and Affordable Care Act (PPACA). That law—passed on an entirely partisan basis in 2010—has significant implications for future federal tax and spending policy. It is often overlooked that the PPACA, among many other things, imposes a very large tax hike, amounting to more than $500 billion over a decade and eventually reaching more than one percentage point of the gross domestic product (GDP) on an annual basis, according to the Congressional Budget Office. Of course, these taxes were put into the legislation to partially pay for the $1 trillion in new spending the law also set in motion, but it is undeniable that imposing such a large tax hike in the health law has made it more difficult to consider further tax hikes for deficit reduction.

The president and his allies want to wall off the PPACA from the larger budgetary debate and limit whatever adjustments are to be made to the non-PPACA elements of the federal budget. That's awfully hard for Republicans to swallow, especially since the president has said frequently that “everything should be on table.” Evidently, that admonition is directed at Republican priorities, not his own. The premise of the super committee was that bipartisan accord will be necessary for progress on the budget, but it will be near impossible to build a bipartisan budget deal on a foundation that includes a partisan health care plan.

The divide over Medicare is just as wide. Republicans believe that Medicare needs fundamental reform. Earlier this year, the House Republicans drafted a budget plan that included a “premium support” structure for Medicare. Future program enrollees (those under the age of 55) would take part in a market-based Medicare program, built much as the prescription drug benefit is today around consumer choice and competition among private plans. The president and the Democrats have a completely different vision for the program. They would not move the program toward competition and choice but would instead rely on payment rate reductions, some of which have already been enacted in the PPACA. The president also supports empowering a panel—called the Independent Payment Advisory Board, or IPAB—to enforce caps on Medicare spending with further rate cuts as necessary.

These two divergent approaches to Medicare reform encapsulate the differing visions of the parties on health care. Republicans believe a functioning marketplace is the key to cost control and higher productivity in the health sector, while the president and his allies in Congress believe that government regulation of reimbursement rates is the way to slow the pace of rising costs.

The United States, along with the rest of the industrialized west, faces many challenges in the years ahead, most especially in terms of paying for a social welfare system in an era of shifting demographics and relentless global competition. The two major political parties have very different visions for how to confront these challenges, with implications for every aspect of government policy, including health care. Although the super committee was delegated a lot of power to tackle these problems, it was premature. At this point, what policymakers need most is guidance from the electorate about which vision for 21st century governance the nation prefers. The coming 2012 election should clarify matters substantially.

James C. Capretta is a fellow at the Ethics and Public Policy Center. He was an associate director at the Office of Management and Budget from 2001 to 2004.

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