Supercommittee's failure to reach deal brings range of reactions

Tuesday - 11/22/2011, 6:38am EST

By Jack Moore
Federal News Radio

The rumblings began early Monday morning. The Congressional supercommittee — born out of last summer's debt ceiling legislation and tasked with cutting at least $1.2 trillion from the federal deficit — was deadlocked and would fail to reach a deal.

The official announcement came Monday afternoon.

In a short written statement, characterized as "somber," by the Associated Press, committee co-chairs Rep. Jeb Hensarling (R-Texas) and Sen. Patty Murray (D-Wash.), wrote: "After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee's deadline."

By that time the markets had plummeted, budget analysts began scrutinizing where and how automatic cuts would come from and the fingers started pointing in Congress.

Under the dictates of last summer's debt ceiling compromise, if the supercommittee fails to reach an agreement, then automatic, across-the-board cuts — half from defense and half from civilian agencies — will be enacted beginning in 2013.

The consensus now seems to be that Congress should work to come up with an alternative to the automatic cuts — but must stick to the numbers agreed to in the debt ceiling compromise, or go even further in cutting the deficit.

'One way or another...'

In a statement early Monday evening, President Barack Obama said the supercommittee's failure to seal a deal doesn't put the United States back in the same position as last summer — teetering on the edge of default.

"One way or another, we will be trimming the deficit by a total of at least $2.2 trillion over the next 10 years," Obama said. "That's going to happen, one way or another. We've got $1 trillion locked in, and either Congress comes up with $1.2 trillion, which so far they've failed to do, or the sequester kicks in and these automatic spending cuts will occur that bring in an additional $1.2 trillion in deficit reduction."

The President likened sequestration to operating with a hatchet instead of a scalpel, but said Congress must stick to the "painful deal" agreed to in August.

In fact, Obama vowed to veto any legislation that would undo the automatic cuts.

An Office of Management and Budget official told Federal News Radio in an email that the White House expects Congress to "live up to their responsibility and do so" to avoid the sequester and come up with an agreement.

"In the meantime, government operations for this fiscal year continue as normal. When appropriate, OMB will take necessary steps to ensure that if there is a sequester, the government is prepared for it," the official said.

Recently, some lawmakers have sought to carve out exceptions for defense, which nearly all sides agree will be steep.

Panetta: Don't take easy way out

In a statement released on Monday, Defense Secretary Leon Panetta said those cuts would "tear a seam in the nation's defenses."

However, Panetta said lawmakers shouldn't take the "easy way out of this crisis," by undoing the cuts. "Instead, (Congress) must pass deficit reduction at least equal to the $1.2 trillion it was charged to pass under the Budget Control Act," he said.

TechAmerica, one of the largest technology trade associations, said the defense and IT industries are bracing for a worst-case scenario.

"This failure to confront our national economic crisis will have long-term ramifications for the country, creating uncertainty that will impact capital markets and reverberate through the all sectors of the economy, specifically the technology industry," said Dan Varroney, acting president and CEO of TechAmerica, in a statement.

Sequestration leading to furloughs, layoffs?

Defense hawks aren't the only ones fearing the prospect of heavy-handed budget cuts.

Patricia Niehaus, the president of the Federal Managers Association, said "arbitrary cuts" will hinder federal agencies in their missions.

"There is no doubt that if the sequestration process moves forward as intended, not only will federal employees be facing the prospect of furloughs and layoffs, but the taxpayers who rely on needed government services will be left without anywhere to turn," Niehaus said in a FMA release.

Follow Jack on Twitter at @jmooreWFED.