Joint Select Committee on Deficit Reduction
Most CG&G readers are too young to remember that what we now know as the National Football League was actually created by the merger in 1966 of the NFL with the American Football League.
The merger announcement was big news. But while fans focused on the championship game -- the Super Bowl -- between the two leagues that began in 1967, with one exception the actual merger didn't really happen until 1970 when the NFL and AFL became one league with two divisions.
The one thing that did happen almost instantly was that the NFL and AFl ended the bidding war for players that was costing the owners so much by beginning a common draft immediately. That common draft and the end to the bidding war was always the major motivation for the merger and it very likely would not have happened otherwise.
Two things if you're at all surprised that the anything-but-super committee is going to announce today that it has been unable to agree on a deficit reduction plan and so is going out of business.
First, you weren't reading Capital Gains and Games.
On August 4 -- two days after the legislation that created the committee was signed into law -- I said here at CG&G that it was "set up to fail." A week later I posted that the now-obviously-less-than-super committee "will-accomplish-nothing." And a number of times over the subsequent three months I argued with everyone who said otherwise that there was no reason to believe that the committee would be able to agree on even a small deficit reduction plan. (Yes, I'm taking a small victory lap here. But, hey, I'm entitled.)
A quick note very early in the morning...
This story by Robert Pear in today's New York Times about the latest from the not-so-super committee tells you everything you need to know about the status of the negotiations. According to Pear, one of the main plans for reducing the deficit the committee apparently is considering is to set up a process by which tax increases would be considered by the House Ways and Means and Senate Finance Committees at some point next year.
Does anyone else see how ridiculous this is?
The anything-but-super committee was set up because the regular committees and legislative process could not agree on what to do about the deficit. But rather than make those decisions, the super committee may decide that the best way to deal with this situation is to throw it back to the two tax-writing committees that, because they were unable to come up with a plan in the first place, gave the job to the super committee.
One of the factors that has been leading some to predict that the Joint Select Committee on Deficit Reduction (aka, the super committee) will come up with a deficit reduction plan of its own is the belief that Wall Street will be disappointed if that doesn't happen and that the major averages will suffer immediately and significantly.
But while there is some reason to think this could happen (after all, Bank of America Merrill Lynch predicted it several week's ago), the counter argument that Wall Street isn't really expecting much, won't be all that surprised if/when the committee fails, and that the the prediction of a massive negative market reaction is grossly overstated seems to be getting much stronger as the November 23 deadline gets every closer.
Back in August I said that the super committee and the rest of the Budget Control Act might not make it to Christmas. As I explain in my column from today's Roll Call, that assessment might have been a little optimistic. In fact, I may have been one holiday too late. It now appears that the super committee (Will someone please explain to me why it deserves that name?) and much of the rest of the deal could crater by this Thanksgiving.
Budget Deal May Be Turkey This Thanksgiving