The inability of the congressional "supercommittee" to agree on a deficit-reduction plan will trigger $1.2 trillion in mandatory across-the-board spending cuts over the next 10 years. The cutbacks, which start in January 2013, will be split between defense and non-defense categories. Also, federal construction programs' budgets will not be spared.
Jeffrey Shoaf, Associated General Contractors of America senior executive director for government affairs, says, "The failure to get an agreement adds more uncertainty for our industry, [which] is still suffering with double-digit unemployment. And we can scarcely afford more uncertainty."
The Budget Control Act, signed into law on Aug. 2, created the 12-member, bipartisan Joint Select Committee on Deficit Reduction, set its mission and spelled out the fallback program of mandatory cuts. Undoing or changing those reductions would require new legislation from Congress.
Official word about the panel's stalemate came in a Nov. 21 statement from its co-chairs, Sen. Patty Murray (D-Wash.) and Rep. Jeb Hensarling (R-Texas). But they said they were hopeful Congress could "find a way to tackle this issue in a way that works for the American people and our economy."
President Obama also called on Congress to come up with a new "balanced plan" to produce at least $1.2 trillion in deficit reductions. Lawmakers have more than a year before the cutbacks kick in.
But Shoaf said, "I don't know that there's a huge impetus for [Congress] to come up with another deal—at least not a bigger impetus than there was for 12 people to agree to something."
Obama also vowed to veto any legislation that would merely reverse or selectively alter the mandatory cuts. He said,"There will be no easy off-ramps on this one."