President Obama and top budget analysts are warning the so-called debt Super Committee not to take the easy way out of their mandate to cut the deficit by at least $1.2 trillion, as lawmakers have yet to reach a deal ahead of a Nov. 23 deadline.
For weeks, the overriding incentive for reaching an agreement was the fact that the law creating the committee would "trigger" sweeping cuts to defense and entitlements if the panel failed to identify the necessary savings. But lawmakers over the past several days have increasingly talked up the idea of simply changing the law so that those cuts -- particularly to the Pentagon -- would not go into effect should the committee fail.
Bad idea, officials warn.
The automatic cuts were designed not only to compel the committee to act, but to make sure the deficit is reduced, no matter what. Without a deal and without the automatic cuts, analysts warn that Congress will have confirmed the markets' worst fears about Washington's inability to confront its gargantuan debt problem.
"You certainly are sending the signal that you're not dealing with the problem," said Doug Holtz-Eakin, former director of the Congressional Budget Office. "I don't think the credit agencies and the bond markets are going to like that."
The country already endured one rating downgrade from Standard and Poor's. Another rating firm, Moody's, assured recently that it was not necessarily gearing up for a U.S. rating downgrade in the event of failure by the Super Committee -- but that statement was based on the assumption that the automatic cuts would kick in and get the country moving down the deficit-cutting path.
Erskine Bowles, the former White House chief of staff in the Clinton administration who later co-chaired Obama's now-defunct deficit committee, warned earlier this month that undoing the trigger would be "disastrous" for the United States.
"The sequester was agreed to by both parties to ensure there was a meaningful enforcement mechanism to force a result from the committee," Carney said in a statement. "Congress must not shirk its responsibilities."
"Sequester" is Washington-speak for the automatic cuts.
Carney was pressed by reporters Friday on whether Obama would veto any attempt to water down the trigger, but Carney stopped short of calling Obama's statement an outright veto threat.
Lawmakers on the committee remain stuck over the proper balance of taxes and cuts.
Republicans recently offered about $300 billion in new revenue, but Democrats said it didn't go far enough. Republicans complain that Democrats want at least $1 trillion in tax increases without making permanent and meaningful changes to Medicare and Medicaid.
Amid the impasse, lawmakers from both parties -- including Sens. Lindsey Graham, R-S.C.; John McCain, R-Ariz., and Carl Levin, D-Mich. -- have talked about taking the sting out of failure. Defense Secretary Leon Panetta warned earlier this week that the approximately half-trillion dollars in mandated military cuts would hollow out the military and invite aggression from abroad.
McCain said Monday that the automatic cuts are "not expressed on golden tablets," suggesting they could be reversed.