Charles Krupa, File, Associated Press
WASHINGTON — The failure of Congress' deficit-reduction supercommittee adds a new dimension to the 2012 political contests, drawing political battle lines around broad tax increases and massive spending cuts that now are scheduled to begin automatically in 2013.
President Barack Obama and his Republican challenger will be forced to debate alternatives for reducing deficits, made all the more urgent by the looming consequences of congressional inaction. The dividing lines already are sharply drawn, with Obama supporting deficit reduction that includes a mix of spending cuts and tax increases on the wealthy, while Republicans have declared themselves averse to tax hikes.
An election that has been shaping up as a referendum on Obama's stewardship of the economy now will require the candidates to offer competing forward-looking deficit-reduction plans to avoid cuts and tax hikes that neither side wants to see materialize.
For Obama, that is a more favorable place to be, drawing contrasts with his opponent and arguing for higher taxes on the rich rather than defending his oversight of an economy that could still be suffering from high unemployment and slow growth next November.
Beginning in 2013, the federal government faces two oncoming trains. When the supercommittee was unable to find agreement by Wednesday, it triggered spending cuts of $1.2 trillion starting in January 2013 and extending over 10 years. Half of the cuts would come from defense spending, the other from education, agriculture and environmental programs, and, to a lesser extent, Medicare.
At the same time, tax cuts adopted during the presidency of George W. Bush will expire at the end of 2012, meaning an increase for every taxpayer.
Defense Secretary Leon Panetta has said the cuts would "tear a seam in the nation's defense."
Meanwhile, the tax increases would hit a still-fragile economy, endangering a recovery and raising prospects of another recession.
But while neither side wants those outcomes, Washington's recent history of tackling fiscal problems shows Congress does not act unless faced with a dire deadline. It extended Bush-era tax cuts in 2010 just days before they expired, it avoided a government shutdown by hours and it put off a debt crisis this summer in the face of a government default.
"The next big event, barring some movement from Congress, may just well be the 2012 election," said Kevin Madden, a former senior House leadership aide and an outside adviser to Republican Mitt Romney's presidential campaign. "Then we look to either a new president and a new Congress, or the same president and the same Congress to restart it all."
Election years do not lend themselves to big legislative initiatives. Lawmakers are too busy seeking re-election to take potentially controversial stances that could cost them votes. Moreover, congressional leaders may well want to see how the elections affect Washington's balance of power before undertaking changes that require compromises.
An angry public could demand swift action. But even if Congress were to attempt to find common ground next year, the legislative maneuvering would unfold in the midst of the presidential contest, and White House aides acknowledge that it can't avoid becoming a part of the political debate.
They repeatedly point out that each of the eight Republican candidates have refused to endorse any deficit-reduction plan that contains any tax increases and that they reiterated that position en masse during a recent presidential debate.
"The very men and woman who would occupy the Oval Office stood up on a stage and all raised their hand and said they would not accept a deal that had as its foundation $10 in spending cuts for every $1 in revenue," White House spokesman Jay Carney said this week.
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