How to handle difficult Supervisor?

It is not your job to meddle in management decisions. It is your job to do your work, get along with everyone as best you can and keep your eyes and mouth shut. If you tattle it will probably be much easier to get rid of you than it is to deal with all the crap that it will take to get rid of the person you have complained about. In fact she will conspire against you with her friend and it will be even easier to discredit you so if you do not want to be job hunting yourself in a couple of weeks myob. I don't like it either but life never promised to be fair and going around trying to change the world to your view just wastes your time and annoys the pig.