November 7, 2012
That's the date on which the determinative discussions about the Budget Reform Act of 2011 will begin. We all know that this Act created the so-called Super Committee to propose a deficit reduction plan. We also of course know that should the Committee not reach a recommendation or should Congress not enact the Committee's recommendation, then the automatic cuts to defense and entitlements are triggered. The theory of the trigger is that neither side of the aisle will allow sequestration of such a drastic extent to cut into its agenda.
The Committee members are no doubt doing their very best to accomplish their mission. They are - to a man and woman - serious and dedicated public servants. They are also tasked with a hugely challenging assignment and the best thinking du jour is that no deal emerges by the deadline. Further, given the extreme polarity in the Congress, there is no guarantee that a Committee recommendation actually passes both chambers.
That does not, however, mean that the trigger is in fact triggered. Indeed, Congress delayed the effective date of the automatic cuts until January 1, 2013. That provision permits Congress an entire year to pre-empt the sequestration. And 2012 is not just any year - it's the presidential Olympics. The likelihood that a Congress in which every House member and a third of the Senators are running for re-election (with an Armageddon election raging above them) will achieve legislation is remote.
So what happens? What happens is the lame duck session. Win or lose, the President has the leverage of the lapse of the bush tax cuts on December 31, 2012 to drive a deal. The Republicans, with or without the President-Elect, have the automatic entitlement cuts as a hammer. So you heard it here first: A deal will get cracked between November 7 and December 31 2012. A good result? A bad result? Reasonable men and women may differ but good or bad that's where we're headed.