By Nina Easton
August 10, 2011

FORTUNE — Mark it on your calendar: November 23. The day before Thanksgiving is the deadline for the audaciously named “super committee” to produce legislation to cut federal spending by $1.2 to $1.5 trillion over the coming decade.

Actually, this date will feel more like Ground Hog Day, since we were at a familiar spot at the very same time last year, when the bipartisan National Commission on Fiscal Responsibility and Reform — otherwise known as Simpson-Bowles after its co-chairs Alan and Erskine — was putting together its own $4 trillion deficit reduction plan.

That plan, issued on December 1 and passed on an 11-7 vote of the members two days later, fell three votes shy of the supermajority needed to trigger congressional consideration. President Obama went out of his way not to embrace his own commission’s plan. And now, despite the melodramatic title “Moment of Truth,” all 66 pages are stashed online along with a slew of other well-intentioned efforts to Slimfast Uncle Sam.

The new super committee has a smaller mandate than Simpson Bowles — up to $1.5 trillion in cuts versus $4 trillion — but it’s designed to have more teeth (which you will hear gnashing loudly as the 12 protagonists from both parties take their places). Automatic cuts are triggered if the committee fails in its job. And assuming the committee comes up with a plan, it’s far more likely to see the light of day than Simpson-Bowles. By Dec. 23 (yes, that’s two days before Christmas, promising a lively holiday season), both houses of Congress must vote on the super committee plan. The legislation cannot be amended and requires only a simple majority to pass both houses.

Since the super committee now takes center stage in Washington’s budget brawl, it pays to settle in with your theater program in hand:

The Players
The committee’s 12 members of Congress — equally divided between the parties and between the two chambers — have mostly been chosen. We are still waiting on Nancy Pelosi’s trio of House Democrats.

On the Republican side, House Speaker John Boehner has tapped conservative darling and Republican Conference Chair Jeb Hensarling of Texas as co-chair and two powerful committee chairs, both from Michigan, to sit as members: Ways and Means’ Dave Camp and Energy and Commerce’s Fred Upton. Those choices mean no seat for the GOP man who has led the charge on budget reform this past year, crafting sweeping (and controversial) Medicare reform, Wisconsin’s Paul Ryan.

From the Senate comes Arizona’s Jon Kyl, a consistent conservative voice since his 1994 election and the chamber’s second ranking Republican; Pat Toomey, the Club for Growth favorite just elected from Pennsylvania and former U.S. trade ambassador Rob Portman, freshman from Ohio. Majority leader Harry Reid tapped Senate Finance Chair Max Baucus, considered a centrist; Foreign Relations Chair and 2004 Democratic nominee John Kerry; and Washington state’s Patty Murray, the Senate’s highest ranking woman. This is the second go-around for Baucus, who sat on the Simpson-Bowles commission but voted against the plan because of cuts to elderly and veteran programs.

One person largely missing from this cast is President Obama. While the President can veto whatever legislation Congress produces, his administration does not play a role in super committee proceedings. Since the president was widely accused of failed leadership during the debt-ceiling drama, that’s probably a wise omission. It also limits the intrusion of 2012 presidential politics.

The Pain
What’s on the table for the super committee to consider? Everything. Yes, including taxes. Likely on the spending chopping block: big-ticket items like farm subsidies, ethanol subsidies, and entitlement healthcare programs Medicare and Medicaid. Expenditures in Obama’s healthcare reform, the Affordable Care Act, are also vulnerable.

On the tax front, decades-old tax benefits to the oil and gas industry are targets but so are tax preferences for the renewable industry, which must be routinely renewed. Nothing is sacrosanct, and the committee may opt to allow clean energy credits to lapse or terminate them early, according to an analysis by the lobby firm Patton Boggs. We’ll also continue to hear Democratic demands to end tax favors for corporate jets, carried interest and LIFO accounting. The question is, will a clean-up of loopholes will be accompanied by a reduction in rates?

The Punishment
If the players fail and Congress does not adopt at least $1.2 trillion in cuts, then a trigger is automatically pulled that splits cuts between domestic spending and defense. Analysts say the worst cuts would fall on defense. “Given that cuts to defense spending must provide half the saving and that military pay is exempted, the impact on the defense industry would be particularly severe,” concluded the Patton Boggs analysis.

Defense Secretary (and one-time Clinton budget chief) Leon Panetta has already launched a vigorous campaign arguing that adding $500 billion in defense cuts to the $400 billion already planned last spring would do “real damage to our security… and our ability to protect the nation.” But the defense cut trigger is expected to put pressure on super committee Republicans to accept tax hikes rather than endanger national security.

The Payoff
All told, if the super committee does its job, Congress will end the year having agreed to about $2.1 trillion in cuts (including the cuts that came with the August debt-ceiling hike). That sounds impressive, until you realize the debt will still increase by $13 trillion over the next decade. Standard & Poor’s, in downgrading the nation’s debt, wanted $4 trillion in cuts — and it considered that only a start.


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