On Monday, August 1, 2011, the House approved the Budget Control Act of 2011 (S. 365), by a vote of 269-161. Among other things, the bill would create and enforce discretionary spending caps to cut and restrain spending over the next ten years, provide a mechanism for increasing the debt limit in two steps (subject to congressional disapproval and more than dollar-for-dollar spending cuts), establish a Joint Committee to produce deficit reduction legislation, and provide for sequestration of mandatory and discretionary spending to achieve cuts equal to a debt limit increase if the committee’s legislation is not enacted or falls short of the amount of the debt limit increase. The following is a summary of the joint committee provisions in the bill.
Committee make-up and legislative agenda: The legislation establishes a “Joint Select Committee on Deficit Reduction” to be comprised of 12 members of the House of Representatives and the Senate. The members will be appointed by the Speaker and minority leader of the House, and the majority and minority leaders of the Senate, who each must appoint three members. This structure is similar to the Joint Economic Committee of the Congress. The joint committee is tasked only with the specific goal of reducing the deficit by $1.5 trillion over the period of 2012 through 2021. The legislation requires the joint committee to provide recommendations (including legislative language) that will significantly improve both the short- and long-term fiscal imbalance of the federal government.
Timeline and procedure for consideration of the Joint Committee report: By November 23, 2011, the joint committee is required to vote on a report which contains the findings, conclusions, and recommendations of the joint committee, as well as the estimates provided by the non-partisan Congressional Budget Office (CBO) and legislative language in support of those recommendations, which must also contain a statement of the deficit reduction achieved. A majority—seven of the twelve members—of the joint committee must approve the report and accompanying legislative language, and the text of the committee’s product must be made public promptly after the vote.
If approved by the joint committee, the legislative language accompanying their recommendations must then be introduced on the next session or legislative day in the House or Senate, respectively. The Budget Control Act provides for expedited consideration of the joint committee’s bill in both the House and Senate, while allowing for regular consideration by the standing committees of jurisdiction but limiting the ability to substantively change the proposed legislation. The procedures require that the joint committee’s bill be debated and voted on by the full House and Senate no later than December 23, 2011. Finally, the joint committee bill loses its privileged status if the committee fails to vote by November 23, 2011 or the bill fails to pass both the House and Senate by December 23, 2011.
Taxes and the Joint Select Committee: The joint committee is tasked in such a way that spending cuts are the only real path to meet its deficit reduction goal. The Committee’s reported legislation will be judged against the Congressional Budget Office (CBO) current law baseline, which already projects that revenues will increase by $3.5 trillion over the next decade due to across-the-board tax rate increases coming in 2013. As Rep. Paul Ryan stated recently, “For any tax rate increases to be scored as ‘reducing the deficit’ relative to current law, those tax hikes would need to overcome the size of the tax increases that would occur if current tax rates were allowed to rise in 2013…Furthermore, letting tax rates expire (i.e., imposing massive tax hikes on American families and job creators) would not achieve any ‘savings’ for this Joint Committee.” Therefore, the de facto mission of the joint committee is to reduce spending. In the unlikely event the Joint Select Committee was to propose tax increases, House Republicans will defeat them on the floor. House Republicans will not allow Washington Democrats to use a spending-driven debt crisis to increase job-destroying taxes, especially when our employment situation is the worst since the Great Depression.