William (Bill) Leary comments on the challenges facing the Supercommittee prior to next week's deadline and the monumental task before them.  To contact Bill directly:  wleary@mfrpc.com.

Will a lack of congressional agreement on managing the federal debt spoil Thanksgiving or de-rail economic recovery?  Don’t alter your holiday plans or worry about your investment portfolio -- just yet. 

 If the congressional “supercommittee” cannot agree on a plan to tame the federal debt by next week’s deadline, as now appears likely, here’s what will happen: nothing according to the Lisa Montgomery and Rosalind Helderman writing in The Washington Post.  The automatic spending cuts that were supposed to force the panel to deliver more palatable options would not take effect until January 2013. The “political escape-hatch” leaves lawmakers a full year to devise alternatives.

An impending government shutdown forced the first budget deal in April. The risk of the nation’s first default on its debt forced the second deal in August.  Under legislation approved during the summer debt-limit debate, any agreement that emerges from the supercommittee would go straight to the House and Senate floor and would be protected from both filibuster and amendment. The panel has until Nov. 23 to strike a deal and Congress has until Dec. 23 to pass it. Failure on either would trigger $1.2 trillion in automatic cuts to agency budgets over the next decade, beginning in January 2013.

The federal debt reached $15 trillion this week, exceeding the nation’s annual economic output for the first time since World War II.  Back in August after a protracted fight, Congress voted to raise the national-debt ceiling by $2.7 trillion to $17 trillion.

“With a vast ideological gulf separating the Republican House and the Democratic Senate on taxes and social spending, a mere deadline may no longer be enough to spur compromise.  Over the past year, Congress has needed the threat of full-scale chaos to force action,” according to the Washington Post . At present, the supercommittee is getting little real support from the  leadership on either side, but member’s vocal support still  fills the air-waves.  The most common refrain: “We’ll have your back”   “They’re right at the edge of a cliff,” said Sen. Lamar Alexander (R., Tenn.) in a graphic challenge. “They can either ascend the mountain or fall off the cliff. We want them to ascend the mountain.”  In reality, members of the supercommittee were “thrown under the train” to facilitate a compromise on raising the debt ceiling. 

The Daily Show mocked the lack of progress from the supercommittee charged with coming up with a plan to reduce the deficit.  "If we are going to achieve that deficit reduction, we are going to need a hero," Jon Stewart joked. Enter the supercommittee -- "a group of 12 lawmakers who gained their powers after having been bitten by a radioactive accountant and are now called upon to slash our deficits."

If the supercommittee fails, many lawmakers and senior aides say a debt-reduction deal is unlikely to be completed until after the November 2012 elections. That’s when Congress will face the prospect of not only unprecedented cuts to the Pentagon and other agency budgets, but also the expiration of George W. Bush-era tax cuts — an outcome that would raise taxes for virtually every American in January 2013.

Sequestration isn’t a sure thing, but it may be something that causes Congress to act.  Sen. Richard J. Durbin  (Ill.), the No. 2 Democrat in the Senate , said Congress must deal with that problem long before the 2013 cuts begin. “And I’m not talking about changing the sequester.  That’s a rush for the exits by people who are frightened,” he said. 

According to the Washington Post, aides in both parties turned their attention to the politically sensitive matter of stage-managing the panel’s demise. Should each side present its own debt-reduction proposal for a vote in a final public hearing? Or should they merely concede that the process has failed on Monday, the legal deadline for making a plan and a cost estimate public?  In reality, the public will be focused on planning for the holiday and football rather than on what happens in D.C – perhaps the deadline was deftly orchestrated to minimize political fallout.