It looks like our elected leaders in Washington may have finally struck a deal that would see the federal debt ceiling raised, thereby averting a situation with America’s credit rating… which would have, by the way, likely hit us all pretty hard in the pocketbook. Here, with more on that, is a quote from Obama a few days ago.
…(F)or those who say they oppose tax increases on anyone, a lower credit rating would result potentially in a tax increase on everyone in the form of higher interest rates on their mortgages, their car loans, their credit cards. And that’s inexcusable…
On the subject of taxes, I’m still trying to make sense of it, but, from what I can tell, the Republicans seem to have gotten their way. The agreed to legislation, it would appear, would see neither increased taxes on the wealthy, nor the closing of tax loopholes commonly exploited by them. The agreement would, however, see significant cuts to unspecified federal programs, totaling $3 trillion over 10 years. And, while the deal would avert another blow-up like this until after the 2012 election, it would do so by shifting the burden to the White House, thereby allowing Congressional Republicans to avoid personal responsibility for raising the debt ceiling. Here, with more on the specifics, is a clip from the Washington Post’s Felicia Sonmez:
…On Sunday morning, McConnell sketched the outlines of a $3 trillion, debt framework that would pair an immediate increase in the federal borrowing limit with immediate spending cuts. The proposal would also include caps on spending over the next decade and would mandate that a bipartisan committee of lawmakers recommend further cuts and potential changes to entitlement programs by the fall, with a “trigger” mechanism to ensure that action is taken to reduce the debt if the committee reaches a stalemate.
The process would involve a “resolution of disapproval” by Congress that would allow the debt ceiling to be further raised next year if one-third of either chamber agrees – an idea first proposed by McConnell in a “Plan B” he unveiled several weeks ago. The move would shift the political burden of raising the debt ceiling to the White House from congressional Republicans.
Also included in the nascent proposal would be a provision calling for a vote on a balanced budget amendment to the Constitution – an element that has become a rallying point for House conservatives. But one potential sticking point in any House vote is that the plan calls only for a vote on such an amendment, not the passage of one, something at which many conservative Republicans are likely to balk…
So, if I’m reading this correctly, not only will the Republicans be able to shift the blame for raising the debt limit (which is something that they know has to happen), to the President, whom they can then attack viscously for doing so, but it also allows them to bring a balanced budget amendment to a vote, which they know will fail (for good reason), but will allow them the opportunity to cast their Democratic rivals as being “against balancing the budget.” I’m inclined to say that this is a horrible deal for the Democrats (and for Americans in general), not just because it seeks to balance the budget on the backs of the non-wealthy, but because it sets the Republicans up nicely to play the victims come November… but maybe I’m missing something. Here, with the other point of view, is a clip from a Reddit reader by the name of garyp714.
…This deal would be a huge win for progressives in ways most progressives rarely concede or understand. The Dems boxed these tea party folk right into showing their asses, acting the fool and killing their chances at reelection. Obama played them like a fiddle and they exposed their ineptness and inability to play politics.
You may not like these games, you may think politics is a game where your side must win every single match 100-0 but that’s not reality, that’s not how US politics works. In terms of US politics, Obama skull fucked Boehner and the tea party into killing their reelection chances while making a deal that isn’t that bad (for fucks sake, we have to start doing something – just like HCR) and doesn’t touch any of the left’s sacred cows.
But just like the far right, the immature progressive users, joining with our far right cacophony will cry a river about how this is a failing of Obama to act like a 13 year old and stomp his feet and do nothing. And that’s sadly, not an accurate portrait of how things work or how the rest of the US and moderates in general will read the situation.
And, as he goes on to point out, the Bush tax cuts are still scheduled to sunset at the end of 2012.
So, what do you think of the deal? Am I being unrealistic when I say that I think we could have pushed for more? Am I naive for thinking that we could have struck a deal with some tax increases on the wealthy, seeing as how a vast majority of Americans (even Republicans) agree that’s the way to go?
update: The following bullets on the deal were just shared with reporters by the White House
• The president will be authorized to increase the debt limit by at least $2.1 trillion, eliminating the need for another increase until 2013.
• The first tranche of cuts will come in at nearly $1 trillion. That includes savings of $350 billion from the Base Defense Budget, which will be trimmed based off a review of overall U.S. national security policy.
• A bipartisan committee with enhanced procedural authority will be responsible for pinpointing $1.5 trillion in deficit reduction from both entitlements and tax reform, as well as other spending programs.
• The committee will have to report out legislation by November 23, 2011.
• Congress will be required to vote on Committee recommendations by December 23, 2011.
• The trigger mechanism — should the committee’s recommendations not be acted upon — will be mandatory spending cuts. Those cuts, which will begin in January 2013, will be split 50/50 between domestic and defense spending. Social Security and Medicare beneficiaries and “low-income programs” would be exempted from those cuts.
As the Huffington Post’s Sam Stein notes, “there is another enforcement mechanism that the president possesses.”
“The Bush tax cuts expire as of 1/1/2013, the same date that the spending sequester [the trigger mechanism] would go into effect,” the fact sheet reads. “These two events together will force balanced deficit reduction. Absent a balanced deal, it would enable the President to use his veto pen to ensure nearly $1 trillion in additional deficit reduction by not extending the high-income tax cuts.”
So, does this mean that the President might have an easier time of allowing the Bush tax cuts to expire? That is, of course, assuming that a Democrat wins in 2012.
update: Glen S just left the following comment in another thread. I thought that I should move it up here.
This evening, President Obama and Senate Majority Leader Harry Reid (D-Nev.) announced that a “compromise” on the debt-ceiling has been reached, and a Senate vote will follow soon.
If passed, Republicans, the Tea Party, and President Obama will get much of what they’ve wanted all along — immediate, massive cuts, followed by additional major cuts that are guaranteed by a sham “Super-Special-Secret-Senate Committee,” and a series of “triggers” that virtually guarantee the cuts will be made one way or the other — and not a single penny in additional taxes on corporations or the wealthiest Americans.
On the House side, the Progressive Caucus has called an “emergency meeting” for tomorrow morning to try to decide whether they will support the deal. Meanwhile, the Congressional Black Caucus already announced (yesterday) that they will not support anything other than a clean, “no-string” debt ceiling bill.
Meanwhile, House Minority Leader Nancy Pelosi (D-Calif.) announced that she wanted to review the final legislation before committing to supporting it, and added:
“I have to meet with my caucus tomorrow to see how they wish to proceed,” Pelosi said. “We all may not be able to support it, or none of us may be able to support it. But we’ll wait and see.”
At this point, this seems to be a done deal … but there is still time to call/e-mail Congressman Dingell and Senators Levin and Stabenow, and ask them to vote against the Republicans and President Obama — and for the American people.