November 29, 2011
Super Committee: Success or Failure?By Frank Ryan
In the Budget Control Act of 2011, Congress created the Super Committee. The Super Committee, technically called the "Joint Select Committee on Deficit Reduction," was chartered with the responsibility to "reduce the deficit by at least $1,500,000,000,000 over the period of fiscal years 2012 to 2021."
In the attempt to force a compromise on deficit reduction, the House and Senate decided to mandate specific cuts in defense and domestic programs to include Medicare, should the Super Committee not solve the deficit reduction problem. The total reduction spending cuts under various assumptions in the bill could amount to over $1.2 trillion starting in 2013.
Many have called the stalemate by the Committee a failure to compromise, with disastrous consequences to follow. The stock market reacted very negatively, and financial markets both here and abroad are in continued turmoil and flux.
The failure to "compromise" may, in fact, be the greatest success of the Super Committee. The stalemate is a philosophical one, not an operational one. At future is the very society we, as a people, are deciding upon. The decisions made today will determine our future and that of generations of Americans not yet born.
At stake is our national identity. It is a battle of ideals and not a battle of wills.
The very act of compromise implies both sides giving a little and taking a little. The history of political discourse in our nation's past has been one of compromise. Compromising at the right time for the right reasons is to be applauded. Compromise at the wrong time and for the wrong reasons must be condemned.
The "Missouri Compromise" prior to the Civil War was intended to preserve the institution of slavery in order to "keep the peace." The compromise, unfortunately, prolonged slavery for another 45 years, and our nation still ended up fighting a civil war. Slavery and states' rights were ideals, but they were fought for in a battle of wills in the "Missouri Compromise," with disastrous consequences decades later.
Whenever two or more groups have completely disparate belief systems, perhaps compromise is not wise. There may need to be a "winner" and a "loser."
Unfortunately, the Super Committee was tasked with the impossible because a battle of ideals cannot be resolved by a committee. It must be resolved by the will of the people. A solution by the Super Committee would have been the true failure. A compromise when belief systems are so entirely different must be resolved differently.
As difficult as it may be accept, it may be much better for our nation to experience financial failure than to prolong the agony by avoiding a decision as to what type of nation we wish to be.
Our Founding Fathers developed a nation where we have the "right to life, liberty, and the pursuit of happiness." Perhaps our citizens no longer feel the way our founders did.
The debt, government spending, and taxes are not the arguments. They are the symptoms.
At stake is what we as a people believe to be the best way to govern: allow individual determination, or rely on government to solve our problems? This is the argument which must be settled. A compromise may not be possible or even desirable.
In over 35 years of helping keep organizations out of bankruptcy, my experience has been that organizations and people, for the most part, change only when they have to change. Long-term perspective and thinking have not been characteristic of most organizations experiencing the prospect of failure. For some clients, the brinkmanship of negotiating takes them to the edge of the cliff. Should their negotiating posture be stronger, they "win"; should it be weaker, they "lose."
In much the same way, the Super Committee has given us an ultimatum. They have clearly said to all of us that it is our decision and ours alone. I would have it no other way.
True progress in our society will take place only when we replace impassioned invocations with reasoned discourse. True solutions solve problems rather than create new ones of even greater severity for generations to come.
If we are truly to rebuild America, we need to resolve this battle of ideals. We need to ensure that our solutions are sustainable and reflect our will, and not the will of a select few chosen by an elected few from a voting base of super-voters only. A truly free society encourages conflict resolution in the ballot box. A failed society welcomes compromise for compromise's sake.
A society cannot truly succeed unless failure is an option. Something must be at stake. Something must be worth losing for long-term solutions to be attained.
I look forward to the debate. I plan to participate in that debate. I hope we all will.
Frank Ryan, CPA specializes in corporate restructuring and lectures on ethics for the state CPA societies. He is on numerous boards of publicly traded and non-profit organizations. He can be reached at FRYAN1951@aol.com.
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