The seemingly impossible job of the super committee.

• Author: Crooks, Christina
• Position: WASHINGTON BEAT

The United States Congress cannot yet wash its hands of the battle over the federal budget, despite agreeing on legislation to raise the debt ceiling in August. The Budget Control Act of 2011, the legislative vehicle enacted to increase the debt ceiling, included a mechanism by which a 12-member Joint Select Committee on Deficit Reduction, or "super committee/' be established and tasked with the goal of finding at least $1.2 trillion in additional savings before Nov. 23--a daunting task considering the immediate cuts and caps included in the law totaled just over $900 billion.

Still, financial executives should pay close attention this fall to the super committee's progress--or lack thereof

With talk inside the Beltway focused on the super committee and its chances of reaching a deficit-reduction compromise by the deadline, many are wondering: why does it matter? Commentators suggest that a failure to reach a deal could again send markets into the kind of volatility seen during the debt ceiling debate. Failure to achieve the deficit reduction goal by the deadline would also trigger sequestration, or across-the-board cuts of $1.2 trillion that will spare no congressional favorites from pain--not even defense spending

On the other hand, if the committee does make progress, business leaders should be concerned with what the deal entails. While Republicans traditionally have been steadfast against tax increases, growing calls for tax reform may provide cover for certain tax breaks to be eliminated in exchange for lower rates on the corporate side, for example.

As in the debt ceiling debate, business leaders must remain vigilant against revenue-raising proposals that have been floated in previous budget plans, such as repealing the last-in, first-out (known as LIFO) inventory accounting method or increasing taxes for American companies with overseas operations.

Can Deficit Reduction be Achieved?

In August, Congress completed the super committee's roster. It will be chaired by Rep. Jeb Hensarling (R-Texas) and Sen. Patty Murray (D-Wash.). Others tapped include Reps. Fred Upton (R-Mich.), Dave Camp (R-Mich.), Jim Clyburn (D-S.C), Chris Van Hollen (D-Md.) and Xavier Becerra (D-Calif.). Other senators tapped for the panel are Sens. Jon Kyi (R-Ariz.), Rob Portman (R-Ohio), PatToomey (R-Pa.), Max Baucus (D-Mont.) and John Kerry (D-Mass.).

The committee began discussions during the August recess, but chances for the group to accomplish its goals are...