| Submit your comments on this article |
| Economy |
| Debt Deal Near! |
| 2011-07-31 |
| President Barack Obama and Republican congressional leaders reached urgently for a compromise Sunday to permit vital borrowing by the Treasury in exchange for more than $2 trillion in long-term spending cuts phased in over a decade. Thousands of programs -- the Park Service, Internal Revenue Service and Labor Department accounts among them -- could be trimmed to levels last seen years ago. Can't trim the IRS; it has to be expanded to enforce Obamacare. No Social Security or Medicare benefits would be cut, but the programs could be scoured for other savings. So after all this posturing, they will still fail to do anything about the real structural problems? Read on; it's punted to another "commission". As contemplated in talks that McConnell and Vice President Joe Biden were negotiating, the federal debt limit would rise in two stages by at least $2.2 trillion, enough to tide the Treasury over until after the 2012 elections. Taxes would be unlikely to rise. Unlikely. Read my lips. The first step would take place immediately, raising the debt limit by nearly $1 trillion and cutting spending by a slightly larger amount over a decade. That would be followed by creation of a new congressional committee that would have until the end of November to recommend $1.8 trillion or more in deficit cuts, targeting benefit programs such as Medicare, Medicaid and Social Security, or overhauling the tax code. See? Overhauling the tax code is not the same as raising taxes! Those deficit cuts would allow a second increase in the debt limit, which would be needed by early next year. If the committee failed to reach its $1.8 trillion target, or Congress failed to approve its recommendations by the end of 2011, lawmakers would then have to vote on a proposed constitutional balanced-budget amendment. Oh, good. They can't vote before that? If that failed to pass, automatic spending cuts totaling $1.2 trillion would automatically take effect, and the debt limit would rise by an identical amount. Social Security, Medicaid and food stamps would be exempt from the automatic cuts, but payments to doctors, nursing homes and other Medicare providers could be trimmed, as could subsidies to insurance companies that offer an alternative to government-run Medicare. Single payer system, here we come. Stephen Den Beste called it! The best news? As details began to emerge, one liberal organization, Progressive Change Campaign Committee, issued a statement that was harshly critical. "Seeing a Democratic president take taxing the rich off the table and instead push a deal that will lead to Social Security, Medicare and Medicaid benefit cuts is like entering a bizarre parallel universe -- one with horrific consequences for middle-class families," it said. |
| Posted by:Bobby |
| #9 to Joseph Mediola. If you belive Nato would like to sit in the comfort of a foreign power well think again. Not all of them do, China recently anouced a rise in aircraft carriers to deploy world power, a similar time after (displayed on this website days after the world knew) Australia would like to deploy subs and a good number as a counter to the coming threat (under my breath) using the help of many NATO allies |
| Posted by: devilstoenail 2011-07-31 22:59 |
| #8 Of course its all speculation until it passes and is signed. It another bill which has to be passed ASAP without proper scrutiny. I think the lower gov take is appropriate. Not only does the fed no garnish wages, but all the associated takes such as gasoline tax take a hit. No job no money no vacation, with the takes associated with that, so forth. It reminds me of the tobacco racket, started programs which were funded by tobacco taxes then with the tobacco priced out of range of the cost/demand intersection along with an anti-smoking campaign the bean counters were shocked, shocked when the revenue fell short. Same with this business environment with the absurd EPA and potential health insurance discoveries to be made. |
| Posted by: swksvolFF 2011-07-31 22:52 |
| #7 Budget projections have the US gov spending $4.5 trillion in FY2016. Take out $200B or even $300B and the gov still spends $4200B-4300B come 5 years. That's an 11-13% increase from the $3800B from this year. Meanwhile, from 2008-2011 total taxes declined as peoples' incomes are shrinking. Project that out and it means even if the Federal did not grow at all, the deficit would still increase because jobs are still being shipped overseas and incomes are declining. And the chance of the Feds not growing at all? Well the odds are better of a snowball in Hell. |
| Posted by: Eohippus Phater7165 2011-07-31 22:27 |
| #6 really? You've read it? WOWOW!!11!! Or are you just knee-jerking from the speculation on the intertubes? I'll wait and judge the actual document |
| Posted by: Frank G 2011-07-31 21:57 |
| #5 There are NO spending cuts. It's reduction from fantasy numbers that the economy cannot support. It's like me saying I project making $500K in a few years so I will begin $450K now. All this does is delay the date of US collapse for 1 year. |
| Posted by: Eohippus Phater7165 2011-07-31 21:46 |
| #4 The coming deal is sold either as a) a terrible deal for Pubs since we'll get played in the negotiations, and the spending cuts happen so far in the future as to be meaningless or b) a great deal for Pubs since we're finally changing the terms of the debate. In the meantime, Mr. Obama's budget is $1000 billion above that of Mr. Bush, just three years later. I can't figure out what we're getting for that extra trillion. And it's not like Mr. Bush was exactly frugal. So why not cut a couple hundred billion from the 2012 budget? That would be the price I would extract from Mr. Obama for a debt ceiling extension. I'll go 4 for 1: give me $100 billion in cuts in 2012 and I'll extend the ceiling by $400 billion. Mr. Obama wants $2.2 trillion in extension to get past November 2012? That'll be $550 billion in cuts now, please. I want my spending cuts up front. Anything else is smoke and mirrors. |
| Posted by: Steve White 2011-07-31 20:16 |
| #3 At last check, AFAIK the US DEBT-TO-GDP RATIO remains officially at 102%, so iff the Congresscritters truly hope to avoid GREECE-STYLE 154% andor JAPAN-STYLE 226%, ETC. THE TIME IS NOW. Most Anaylsts believe that the US has more than enough Social Programs + could prolly easily stand to lose or consolidate a few. Post-911/GWOT USA = UK-NATO = one day will depend on another Foreign Power, e.g. [post-US?]Rising China, for our National, Geopol Security? OWG NUCLEAR CALIPHATE?? PROB IS THAT BY ITS HISTORY AMER IS SOCIOCULTURALLY + POL LINKED TO THE UK + EUROPE, NOT CHINA + ASIA, ETC. - IN ADDITION, AFAIK 2050-2080 HISPANICS, NOT CHIN OR ASIANS, MAY COMPRISE THE LARGEST DEMOGRAPHIC GROUP IN AMERICA AT THAT TIME. IMO ANY FUTURE "HISPAMERICA/HISPANAMERICA WILL LIKELY N-O-T PREFER TO MILPOL DEPEND ON CHINA + ASIA FOR ECON OR SECURITY. And the above does not count Radical Islam's = MilTerr's desire to attack + expand its Jihad agz the US, nor GWCC. A "BALANCED BUDGET" IS ALREADY STRONGLY INFERRED IN THE US CONSTITUTION. |
| Posted by: JosephMendiola 2011-07-31 20:08 |
| #2 If the committee failed to reach its $1.8 trillion target, or Congress failed to approve its recommendations by the end of 2011, lawmakers would then have to vote on a proposed constitutional balanced-budget amendment. Chicken scat! If the House and Senate had the political courage to pass a balanced budget amendment without all this attendant claptrap and it went to the States, I believe 3/4 of the States would pass it also. |
| Posted by: JohnQC 2011-07-31 18:56 |
| #1 I agree with others that this has been a drama to distract us from all the bad economic news. We are being played or managed so to speak. Look now how bad things are. We must now consider actions that we never would have agreed to before. Tarp, TSA, too big to fail,QE 1,2,3 and what's next? anything is possible. |
| Posted by: Dale 2011-07-31 18:25 |