As part of the deal being discussed to raise the debt ceiling, leaders on Capitol Hill are forming an especially powerful congressional committee that would be charged with drawing up a new "grand bargain," possibly by the end of the year. Gimme what I want right now, and I'll listen to your needs next year. Maybe even this year!
Key elements for a big deal remain in place. Obama has been clear that he wants one and has started making the case to skeptical factions of his own party that getting the nation's fiscal house in order is in their best interest. House Speaker John A. Boehner (R-Ohio) also remains committed to an ambitious plan, having told his troops that he didn't become speaker to do small things. And, perhaps most critically, the markets are demanding it. The credit rating agency Standard & Poor's says Washington must agree to reduce the debt by $4 trillion over 10 years to avert a downgrade.
Senate Budget Committee Chairman Kent Conrad (D-N.D.)said "Every serious economic analysis tells us we've reached the danger zone. And just kicking the can down the road? That can't be. We're better than that. We've got to be better than that."
House Majority Leader Eric Cantor (R-Va.), who has emerged as the leader of this contingent, has argued against such a deal. But his views may be shifting along with those of some rank-and-file House Republicans whose imaginations have been captivated by the idea of slicing as much as $5 trillion out of the federal budget over the next decade.
In public at least, conservatives are maintaining that the answer is to "cut, cap and balance" -- passing a balanced-budget amendment that would cap federal spending at 18 percent of the nation's gross domestic product, down from its current 24 percent. There's an idea I could get behind.
The House is expected to vote Tuesday on such an amendment, but it has scant odds of getting the needed supermajority in the Senate. Democrats say an 18 percent cap in a country with an aging population and rising health-care costs would lead to ruinous cuts to their friends, glad-handers and contributors.
Under the stopgap plan that will never be passed, Congress would allow Obama to raise the debt ceiling in three increments totaling $2.5 trillion over the next year. Each time, Congress would vote on a resolution of disapproval, allowing Republicans to blame the increases on Obama. To get backing from House Republicans, McConnell and Reid are adding $1.5 trillion in spending cuts. And they are drawing up the committee, with six lawmakers from each party, which would report by the end of the year.
The committee would resemble the fiscal tax raising commission chaired last year by Alan Simpson and Erskine Bowles, minus presidential appointees. But its path would be easier: The panel will require only a simple majority to report a plan to Congress, it would be protected from Senate filibuster and it would not be subject to amendment, similar to the system used for closing military bases.
"We all keep coming back to the same basic parameters. The Bowles-Simpson plan really laid out how you reach $4 trillion. And there aren't a lot of things they didn't consider," Durbin said. "There are only so many moving parts here." Even if you consider all of the parts, and quit making some inviolable.
The commission recommended saving $3.8 trillion by raising the retirement age for Social Security, slashing spending across government and wiping out more than $100 billion a year in popular tax breaks, including the tax deduction for mortgage interest and the tax-free treatment of employer-provided health insurance. It recommended larger Pentagon cuts and revenue increases than the White House sought this month. Tax and spend. Whotta concept! Why didn't I think of that?
Reid has been outspoken about the need to protect Social Security benefits. He is also eager to avoid cuts to Medicare that would undermine Democrats' ability to campaign against the House GOP's plan to eventually replace Medicare with a system of subsidies to buy private coverage.
Obama countered last week that Democrats should want a major fiscal deal, because it would make it easier to win approval for spending on their priorities in the next few years. Is 'Everything I want' a 'priority'?
"If you care about making investments in our kids and making investments in our infrastructure and making investments in basic research," he said, "then you should want our fiscal house in order so that every time we propose a new initiative somebody doesn't just throw up their hands and say, Ah, more big spending, more government." Actually, I agree with that part. But in this case, it's still part of Obama's scheming - a shifty new direction.
Posted by: Bobby ||
07/17/2011 11:04 ||
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Link ||
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#1
If we jump off the cliff together a few of us will survive and become committee chairmen.
Posted by: S ||
07/17/2011 11:44 Comments ||
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#2
Notice that there is not much discussion of taking all fiscal legislation and budgets through open committee processes (where the public can see them) as they should be.
And there are only two issues on the table. Bambi's recent expansion of the Federal government's expenditures and how much the Federal government has to pay for medical care in the last two years of life.
The voters will decide next November. If we;re lucky. Otherwise the markets will the following year. This is just election preparation.
#8
how much the Federal government has to pay for medical care in the last two years of life Medical care in the last X years of life is a fake issue. The last X time of one's life is only defined in retrospect. There are almost some exceptions to this. The real issue for the electorate and taxpayers is, how much money are they willing to cough up to pay for someone else's health care. There is no free lunch there. Much more could be done to cut costs, but the government seems bent on dumping unfunded obligations on the medical care system, e.g. EMTALA and FDA manipulating pricing of drugs. The credit rating agency Standard & Poor's says Washington must agree to reduce the debt by $4 trillion over 10 years to avert a downgrade. More financial news BS. Let the Feds 'agree to reduce the debt by $4 trillion over 10 years' -- and then fail to deliver on its promise. This has happened before. Making promises past the next term of Congress is a way to deceive & pretend. Just cut federal spending drastically THIS YEAR.
-- One elephant in the room few attend to: cutting federal spending over the next 12 months will cause an IMMEDIATE drop in GDP and and rapid rise in unemployment as government workers are laid off. This will tend to unmask the depression we're in. Which party would get the blame for doing what is necessary, is the question.
Maybe it would be better to choose the shutdown rather than have it forced on us.
#11
Standard & Poor's says Washington must agree to reduce the debt by $4 trillion over 10 years to avert a downgrade.
Meanwhile the federal debt increased by $3.3 trillion during 2009 and 2010. This year it's scheduled to do the same $1.6T. Take $400 billion off those numbers and America still free falls into national bankruptcy w/ even including nationalized health care or Medicare costs that increase 10+% per year.
The commission recommended saving $3.8 trillion by raising the retirement age for Social Security, slashing spending across government and wiping out more than $100 billion a year in popular tax breaks, including the tax deduction for mortgage interest and the tax-free treatment of employer-provided health insurance. It recommended larger Pentagon cuts and revenue increases than the White House sought this month.
I see lots of tax increases. Other than defense, where are the spending cuts? Isn't spending 26% of GDP enough for Washington pigs?
#14
Obama is a Drama Queen! I remember when George H.W. Bush promised: "Read my lips. No new taxes." When he didn't do as he said, he was out of the WH. Somewhere since then the standards for truthfulness and honesty have declined.
#15
Standard & Poor's says Washington must agree to reduce the debt by $4 trillion over 10 years to avert a downgrade.
Sweet little game you got going there... and they pay you for the ratings.... be a damn shame if anything happened to your scam business.
Posted by: S ||
07/17/2011 19:06 Comments ||
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#16
Agree wid #5 Barbara.
The Congresscritters should try going on National TV to explain to Mom-N-Pop mainstream America whom balance family checkbooks, etc. every week or month how is it that They = America are not bankrupt when the $$$ revenue coming in, aka the US$14.3Trilyuhn GDP, is LESS than their Debt obligations, aka US$14.4 -14.8 Trilyuhn US Debt, AND THE ONLY PLAN WASHINGTON HAS IS TO "SPEND SPEND SPEND" WHILE CREATING NEW BUREACRATIC ENTITIES TO STUDY THE PROBLEM.
Its only a question of whether Washington will go for GREECE-STYLE 150% DEBT-TO-GDP BANKRUPTCY, VERSUS JAPAN-STYLE 226% DEBT-TO-GDP BANKRUPTCY, as of July 2011 - then again, there's the Cold War SOVIET-STYLE where we can pretend we don't see any debt + JUST "WRITE IT OFF" FROM THE BOOKS. NO DEBT ON PAPER = NO PROBLEM = GOOD FOR THE POLITBURO, PARTY + NEW INTERNATIONAL BORROWING/LENDING.
NO ONE GETS SENT TO THE GULAG = LABOR, RE-EDUCATION CAMP; OR [quietly]EXECUTED FOR IMPROPER BEHAVIOR CONTRARY OR HARMFUL TO PROPER SOCIALISM, THE STATE, OR THE PEOPLE.
Instead of Annual Govt. Budgets, Washington will argue over QUARTERLY + MONTHLY BUDGETS ala USSR.
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As part of the deal being discussed to raise the debt ceiling, leaders on Capitol Hill are forming an especially powerful congressional committee that would be charged with drawing up a new "grand bargain," possibly by the end of the year.
