The Super Committee

The Budget Control Act of 2011 was passed in early August to raise the debt ceiling so that the U.S. did not default on its debt.  Congress was unable to come to an agreement on a deficit reduction plan so instead the act also created a joint committee that will be charged with finding a way to reduce the nation’s deficit.  This so called “super committee” will have a tremendous authority as the bill they craft will be guaranteed an up or down vote in the House and Senate with no opportunity for amendments.  There are six democrats and six republicans assigned to the committee.

We don’t like to get into politics here and instead try to be objective observers so that we can relay the facts to you and to help you understand their impact.  The facts are that this super committee is going to be extremely important to the future of our country and unfortunately politics are going to play a major part.  Both parties have already begun pushing their agendas and political commentators seem to feel that the selections to this committee could more likely lead to more gridlock than to any kind of “grand bargain.” 

The inability of our government to come to an agreement is exactly what landed the U.S. on the brink of default in the first place.  This behavior by our government leaders is one of the key issues cited by Standard and Poor’s when they downgraded U.S. debt.  They don’t believe our government will be able to make the hard decisions that need to be made in order to cut our deficit over the long run.  Unfortunately, it’s difficult to argue with this reasoning.  Our politicians appear to be more concerned with re-election than they are with fixing our country’s financial problems.

That re-election will also be crucial to the future of our nation.  We don’t know what the super committee will come up with but it’s likely that any real tax reform might be put on the shelf until after the next election. 

This super committee is in a great position to help our country.  We need tax reform and a simplified tax code.  We need to reign in entitlement spending and figure out a way to fix social security for the future.  We hope that the super committee will put aside their differences and work toward a solution for the future.  But will they?

We don’t know the answer but of course we will be closely monitoring this situation.  We will keep you posted as this situation progresses.   

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