As we noted last week, the $900 million cut from the federal budget to avoid default of the nation’s debt obligations is only just the beginning. The Budget Control Act of 2011 (“Act”) guarantees that another $1.2 to $1.5 trillion will be cut from the federal debt over the next ten years (Public Law 112-35). The only question is how these cuts will come. Will the bipartisan congressional debt “Super Committee” meet the tight deadlines mandated in the Act and come to a consensus on a debt reduction package? If they do, how much will the cuts affect Medicare, Social Security and other mandatory spending programs, as well as defense? And will the package include any revenue increases? If the Super Committee does not come to a consensus, then the Act’s “Automatic Trigger” kicks in: spending for both discretionary and mandatory programs, including Medicare, would be cut from 2013 through 2021. The cuts would be 50-50, between defense and non-defense. However, the Medicare cut could not exceed 2% in any given year.

With a daunting task in front of it – and the fallback of the Automatic Trigger – it would be somewhat understandable if the Super Committee was set up to fail. However, Republicans and Democrats have appointed members to the Super Committee who are serious, at least at this point, in bridging the partisan divide in Congress and coming to a consensus on a debt package. The Co-Chairs of the Super Committee are Senator Patty Murray (D-WA) and Rep. Jeb Hensarling (R-TX-5). The remaining members are: Senators Max Baucus (D-MT); John Kerry (D-MA); Jon Kyl (R-AZ); Rob Portman (R-OH); Pat Toomey (R-PA); and Reps. Dave Camp (R-MI-4);.Fred Upton (R-MI-5); James Clyburn (D-SC-6); Chris Van Hollen (D-MD-8); and Xavier Becerra (D-CA-31). We note that these Senators and Representatives have an understanding of the spending issues in the programs at risk for cuts. For example, two of the Members chair congressional committees with jurisdiction over Medicare [Senator Baucus, Chair of the Senate Finance Committee, and Rep. Camp, Chair of the House Ways and Means Committee].

The timetable is tight, though. Under the Act, the Super Committee has until November 23rd to produce a debt reduction package and Congress has until December 23rd to send that package to the President’s desk (the President has until January 15th to sign the bill into law). As we also noted previously, the Act does give the Super Committee, and Congress, some tools to expedite package and avoid delaying measures used by other Members of Congress in the past, such as requiring any debt package to face an up-or-down vote and thus avoid any amendments on the House or Senate floor that could be deal breakers. Moreover, there are other parallel legislative events — the likely Omnibus Appropriations bill and certain Re-authorization bills — that may also influence final budget issues. It remains to be seen, however, whether in the end the Super Committee can bridge partisan differences on principles central to each party, such as spending for safety net programs and opposition to any tax increases. In other words, stay tuned….