The Devil’s In The Debt Ceiling Details

The Devil’s In The Debt Ceiling Details

Since Cut, Cap, & Balance can’t move through the Senate, we’ve been having a big fight to decide which plan that won’t fix our problems is going to become law. Here’s the compromise that has supposedly been decided upon,

A White House official cautioned that no deal had been reached and that details floating out there were “inaccurate”.

* $2.8 trillion deal. It would raise the debt ceiling by that amount through 2012 and make equal spending cuts.

* $1 trillion in cuts would be agreed now.

* Special committee appointed by Congress would recommend a second installment of savings of about $1.8 trillion. Congressional leaders have been aiming for finishing that work by the end of this year.

* If Congress cannot agree on how to implement the cuts recommended by the committee, automatic cuts would be triggered, including reductions in military spending and cost savings to the Medicare healthcare program for the elderly. Benefit cuts would not be triggered though.

* No cuts in Social Security.

* It was unclear whether tax increases could contribute to the additional budget savings under the trigger.

2.8 trillion dollars wouldn’t alter our financial trajectory over the long haul, but given that the Democratic Party’s starting position was zero, it still COULD be called a small victory for the GOP and a step in the right direction. I say “could be” because there are a lot of unknown details.

For example, other versions of the plan floating around say that tax increases can be part of the special committee’s recommendations, which would mean the GOP would be put in a no win situation where it either had to break its pledge not to raise taxes or vote for Medicare and Defense cuts. Republicans would be foolish to sign onto a deal like that. Furthermore, who’s going to be on this “special committee?” Can it recommend tax increases? Will there be a way to weasel out of the “automatic cuts?” How big would the defense cuts be? What kind of defense cuts would they be?

Moreover, are we going to be passing another important piece of legislation that isn’t being read by the people voting on it? We better not be. Obama, whose grand contribution to this whole process has been to get in the way, has reversed himself yet again and now is saying he’s willing to sign a short term debt ceiling increase to move the deadline out a week or two. Republicans should take him up on it. They also shouldn’t sign onto a deal that let’s Democrats weasel out of that 1.8 trillion in later cuts or that puts them in a position where the Democrats will be able to accuse them of choosing to cut Medicare and money for the troops rather than raise taxes on the wealthy. Republicans have pledged not to raise taxes and they should not agree to any deal that puts tax increases on the table. They gave their word to voters and they should keep it.

As to whether they should vote for this bill or not, the devil’s in the debt ceiling details. Until we know what those details are, there’s no way to say.

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