The recent drama over the federal debt ceiling resulted in legislation that resolves the government’s operational debt management issues through early 2013. Left unresolved, however, was the critical matter of how to repair the government’s larger fiscal imbalance. The next step in this process will be taken by a bipartisan budget “super committee” consisting of twelve Senators and Congressmen, established in that same legislation.
This special committee is charged with developing recommendations, due later this fall, to achieve $1.5 trillion in deficit reduction over the next ten years. The White House, continuing its rhetorical approach employed during recent budget negotiations, has publicly expressed the hope that this committee will “seek a balanced approach to larger deficit reduction.”
Different observers will inevitably have different opinions of what constitutes “balance.” I offer the view that no deficit-reduction agreement can credibly be called balanced if it fails to do one simple and necessary thing: cut the projected cost of new spending enacted in last year’s health care law.