Supercommittee's Failure: The Winners and Losers

By Jonathan Allen, Politico

21 November 11

In a short, to-the-point, White House news conference President Obama promised to veto any attempt to avoid $1.2 trillion in 'triggered cuts' after the collapse of the so-called 'Supercommittee.' In an obvious reference to plans by Congressional Republicans to bypass nearly $600 billion in defense cuts, the President said, 'I'll veto any effort to avoid automatic cuts.' -- JPS/RSN

n Washington, you can win for losing.

As the professional Cassandra class bemoaned the failure of the congressional supercommittee to come up with $1.2 trillion in deficit-slashing policies on Monday, there were plenty of folks in DC ready to dance a jig on the fresh legislative grave.

That's because a lot of folks stood to gain - or at least lose less - from the debacle.

Still, it's hard not to see Washington, Congress and the members of the supercommittee as big losers in the scorecard of national politics.

Here's a look at how POLITICO ranks the losers and winners.

THE LOSERS

The military industrial complex - The Pentagon and its contractors now face the harsh prospect of up to $600 billion in cuts beginning in January 2013. The supercommittee represented an opportunity for lawmakers to slash entitlements or raise revenues in a way that could have spared the defense industry from a painful sequester of funds. While Defense Secretary Leon Panetta and defense-minded lawmakers have argued that such cuts would be debilitating for the Pentagon, there's no assurance that they will be able to block the cuts before they are scheduled to go into effect.

And even though Republicans are generally supportive of national defense spending, the new appetite for budget restraint suggests that House conservatives might not be terribly amenable to busting spending caps for the Pentagon. Any effort to shift cuts from defense to domestic spending will run into resistance from Democrats in the House and Senate.

Members of the supercommittee - No one looks worse in this mess than the 12 lawmakers who were handed nearly unlimited power to reshape federal taxation and spending for years to come and couldn't find a penny's worth of common ground. Some were looked at as deal-makers, others as deal-breakers, but in the end there was no deal to make or break.

Speaker John Boehner, Senate Majority Leader Harry Reid and incumbents - "Failure," Boehner said repeatedly, "is not an option." But despite legitimate efforts to strike a deal over the course of several months - and through a supercommittee, two commissions, a gang, a group and ad hoc dinner parties - the leaders in Congress could never prod the process to fruition. As a result, the majority party in each chamber appears set to head into the next election without having been able to forge the kind of bipartisan compromise that has historically given voters a reason to keep the same folks in charge. Reid has a much tougher challenge in keeping control in his chamber - Democrats are defending 23 of their seats in 2012 - but all incumbents can expect that Washington "outsider" candidates across the country will be ready to hammer them for the failure of the supercommittee to solve the nation's budgetary problems.

"It's hard to say that there are any winners in Washington these days and therefore, the biggest winner is anyone not working here," said one Democratic aide. "It will be fairly easy to tap into national frustration and paint your opponent as part of the problem in Washington. I would not want to be an incumbent in a tough district this cycle. We could be looking at yet another wave election in Congress."

The month of December - T.S. Eliot wrote that April is the cruelest month, but Congress and many Americans may have reason to view December that way this year. The supercommittee had been viewed as a good venue for extending a series of laws that affect the middle class and are scheduled to expire at the end of this year. They include the alternative minimum tax policy, a provision known as the "doc fix" that prevents a sharp reduction in Medicare reimbursement rates paid to doctors, unemployment insurance and President Barack Obama's payroll tax cut. Now, Congress has a month to come up with a plan to extend some or all of those laws - and to offset their costs.

THE WINNERS

Thanksgiving pardon recipients - To avoid the automatic cuts of domestic and defense spending, the supercommittee would have had to come up with dollar-for-dollar savings targeting specific programs. For those with their necks on the line, the supercommittee's surrender statement was received like a last-minute pardon.

"The biggest winners were the groups that were still on the chopping block as of this weekend," a top Washington lobbyist said. "Federal employees groups, agriculture, groups that depended on postal rates, and airlines that dodged bullets on higher user fees and taxes."

AARP and Americans for Tax Reform - Here's how AARP described its lobbying efforts in a registration form filed with the Senate: AARP "lobbied Congress on excluding cuts to Social Security from the deficit-reduction package." Since Social Security can't be cut by sequestration under the debt-limit law enacted earlier this year, only a supercommittee decision could have raised revenue or cut spending by altering its structure.

In particular, the supercommittee looked at adopting a new consumer-price-index model - called "chained CPI" - that would have slightly reduced payments to seniors. That's now off the table, and AARP and its allies can rest easy. Similarly, Americans for Tax Reform and other groups dedicated to preventing tax increases have to be pretty pleased with the outcome. Under the trigger, all of the deficit-reduction measures come from the spending side of the federal ledger.

Senate Minority Leader Mitch McConnell and House Minority Leader Nancy Pelosi - There was no reason for either leader to want to hand a political victory to their majority-party counterparts in the form of a deficit-reduction deal that would allow both sides to run as tax-reformers and budget-cutters. Anti-incumbent backlash is generally good for minority leaders, who can seek to capitalize on the failures of the folks in charge. In addition, both McConnell and Pelosi sent strong messages to their respective political bases that they stand for their values. For McConnell, that means taxes aren't going up. For Pelosi, that means Social Security is safe and any changes to Medicare will be minimal.