Last-Ditch Scramble?

A Last-Ditch Scramble

More than $2 trillion in deficit reduction had to be found and fast. Congress hurriedly agreed to $1 trillion worth of cuts over the next decade, with the remainder to be found later by a congressional "supercommittee" proposed, at the time, by Senate Majority Leader Harry Reid.

"There would be a joint committee that would move forward, and there would be a trigger that if they didn't resolve this, then something else would happen," Reid said in late July. "And based on past experiences, I think there would be tremendous incentive not to let that certain thing happen when the trigger kicked in."

That "certain thing" Reid referred to is what's known as "sequestration." Lawmakers agreed that if they failed to come up with a deficit-reduction plan, draconian across-the-board cuts in federal spending would be triggered Jan. 1, 2013 — the same day that all the George W. Bush-era tax cuts were scheduled to expire.

At the White House, President Obama gave his blessing. "If we need to put in place some kind of enforcement mechanism to hold us all accountable for making these reforms, I'll support that too, if it's done in a smart and balanced way," he said.

Senate Minority Leader Mitch McConnell was also on board. "I think I can say with a high degree of confidence that there is now a framework to review that will ensure significant cuts in Washington spending," he said.

Ross Baker, a congressional expert at Rutgers University, says that at the time, minds were not focused on what might be happening at the beginning of 2013.

"It was August. August is a time for recesses, not the time for serious legislation," he says. "I think the real problem at the time was trying to ensure that there was not a default. They just had to get beyond that."