The Super Committe failed to meet a deadline on plans for a $1.2 trillion dollar deficit cut.
The Super Committee, the congressional panel charged with cutting $1.2 trillion from the federal budget, failed to meet a deadline this week, casting government budget conflicts and housing-related cuts in further distress.
Though the cuts would not be scheduled to take effect until 2013, they greatly depend on the 2012 presidential election and other factors. Unless a plan strategy is made, all government departments could face budget cuts in 2013, according to data cited by Reverse Mortgage Daily (RMD).
“The cuts that actually kick in 2013 will depend entirely on the 2012 election,” said Dean Baker, co-founder of Washington, D.C.-based Center for Economic and Policy Research. “If the president and congress elected in 2012 opt for different patterns of cuts or possibly putting off cuts, then this is what we will see. A future Congress cannot be bound by the decisions of a prior Congress.”
One area that was mentioned repeatedly as a potential source of cuts was housing, namely the enormously influential mortgage interest tax deduction and funds for the Department of Housing and Urban Development. Debates over the tax deduction grew particularly intense, with analysts and politicians alike addressing the topic in ways not seen in years.
As the Super Committee dragged on in negotiations, though, government department such as the Federal Housing Administration and HUD had little to do by operate with business as usual.
“In the meantime, government operations for the fiscal year continue as normal,” said a representative for the White House Office of Management and Budget. “When appropriate, the Office of Management and Budget will take necessary steps to ensure that if there is a sequester, the government is prepared for it.”
According to the RMD article, “Super Committee Fails, Potential Housing Cuts to be Determined,” the OMB had said that if laws are not made on monetary regulations, funds throughout defense and non-defense programs will be sequestered in 2013.
“Details for hat this will mean for each program and department have not yet been determined,” the OMB stated.