Congress has a history of undoing previous attempts to require debt reduction, and lawmakers on both sides of the aisle, including Senator John McCain, an Arizona Republican, and Representative Maxine Waters, a California Democrat, are already trying to use legislative levers to stop the automatic cuts from taking effect.
Supporting The Trigger
Boehner, an Ohio Republican, and House Minority Leader Nancy Pelosi, a California Democrat, have said they support the trigger. "The markets should know that the deficit reduction will occur," Pelosi said on Nov. 3. Boehner has said he "personally" feels a moral obligation to uphold the cuts.
U.S. credit rating companies have made it clear that, while a failure of the supercommittee might not lead to a credit downgrade, undoing the automatic cuts probably would. Moody's said the lack of a supercommittee agreement wouldn't on its own cause the U.S. to lose its top credit ranking because the August debt-ceiling deal includes $1.2 trillion in automatic cuts.
Last month, John Chambers, a managing director of Standard & Poor's, said the U.S. could face additional downgrades if Congress attempts to thwart the across-the-board cuts.
Defense Cuts
Instead of dismantling the trigger, Congress is more likely to look for ways to reconfigure the blend of defense and domestic cuts. 'They're done in a way that would be very harmful to our nation's defense,'' Toomey said yesterday. "It's very important that we change the configuration but that we not abandon the spending cuts."
If the current trigger remains, the consequences of failure will fall disproportionately on discretionary programs, with the Congressional Budget Office estimating that 71 percent would come from these programs such as education, the environment, transportation, housing assistance and veterans' health care. The cuts would come in addition to the first round of cuts as part of the Budget Control Act.
If the panel fails, White House Budget Director Jack Lew has said he thinks there would be action on the deficit at the end of 2012, after the presidential election, because there would be a "perfect storm" of circumstances forcing Congress's hand, including the expiration of the Bush-era tax cuts.
Meanwhile, with the U.S. jobless rate at 9 percent, Congress and the president must now decide whether to extend an expiring payroll tax cut, which could further roil the economy.