After three months of meetings, discussions and political squabbling, the Congressional “super committee” burdened with the task of reducing the US federal budget by $1.5trillion over the next ten years has failed to agree on a suitable plan.
In a last ditch meeting, the Montana Senator Max Barcus gave his opinion about the likelihood of a deal, “There’s always hope.” It speaks volumes about the state of confidence in the Congress that no one believed it.
US Defence Secretary Leon Panetta said he had "never been so concerned" about the ability of lawmakers to solve the nation's problems in his four decades of public service.
The committee co-chairs Senator Patty Murray and Representative Jeb Hensarling said in a statement that, "Despite our inability to bridge the committee's significant differences, we end this process united in our belief that the nation's fiscal crisis must be addressed and that we cannot leave it for the next generation to solve."
Brilliant, so what that means is that after several months of discussions they have agreed that something must be done........but they already knew that back in July and still nothing has been done.
Exactly what this failure means for the energy sector is unclear at the moment, but the required cuts are so large that major projects and research facilities are likely to face a dangerous lack of investment. In such a young, under-funded industry as renewable energy any cut in government subsidies could threaten the development of promising technologies and delay the progress of a green energy era.
Michael Lubell, head of public affairs with the American Physical Society, suggested that, “It’s going to be a real bloodletting.”
More than half of the cuts will fall on national security and defence, which could prove crippling to the US army. All other programmes could face an 8% cut, but is unlikely that the cuts will fall evenly; opening the doors for frenzied lobbying of prized projects that could set groups of scientists against one another.
It’s hard to say exactly which projects are under the most risk, but the Department of Energy’s system of national laboratories, which cost more than $10 billion a year to run, may face some tough times. The DOE addresses America’s energy, environmental and nuclear challenges through transformative science and technology solutions. Reductions to this department could severely restrict development of more efficient, greener and renewable energy technologies, limiting America’s competitiveness in the market with the Chinese, Germans, and others.
In an attempt to reassure markets and ratings agencies President Obama assured that "One way or another, we will be trimming the deficit by at least $2.2 trillion over the next 10 years."
The US Energy Sector can still live with the hope that they will continue to receive the necessary financial support from the government, despite the failure of the committee to discover a better resolution to the economic predicament. As Bloomberg News noted “Congress has a history of undoing previous attempts to require debt reduction.”
By. James Burgess of Oilprice.com