Moral Hazard in Super Committee

The Joint Select Committee on Deficit Reduction, commonly referred to as the Super Committee, is a bipartisan committee looking for ways to prevent a sovereign default from occurring in the United States, by cutting $1.5 trillion from the 2012-2021 budgets. While in the face of current events this may seem sensible, politicians are taking advantage of the secretive nature of the Super Committee to introduce costly new programs in bills.

Recently, 27 House members sent a letter to congressional Super Committee co-chairs last week, voicing concerns that members of the agricultural committee were using the deficit reduction process to keep and introduce new programs into the Farm Bill, without any sort of oversight. The letter (which can be found here), signed by representatives from both parties, mentions the lack of congressional review and oversight stemming from the fact that “recommendations [from the Super Committee] are not subject to amendment or filibuster. Congress implemented these rules to dull the pain of politically contentious but fiscally responsible measures. Yet, it has become apparent that some believe they can create new programs and entitlements with limited Congressional scrutiny and input.”

It is alarming that even when the United States government faces large budget deficits (which has forced Congress to raise its debt ceiling), congressmen try to sneak in costly amendments, regulations, and earmarks that will benefit only a few individuals in privileged areas. The nature of the political system rewards politicians who look for irresponsible and unjust “pork” for their districts, while fiscally responsible members tend to be penalized by their own voters. This is the tragedy of the political system, and the result of large national policies that create concentrated benefits, but diffused costs.