The Debt Ceiling Agreement: The basics made simple, a range of views. Add your own 2 cents! (no pun intended)
The Agreement:
The following information comes from an excellent summary by the National Women’s Law Center, ”Congressional leaders and the Administration have reached an agreement that would allow the debt ceiling to be increased so that the nation can pay its bills and avert a disastrous default, but at a painful price. The deal would make deep cuts to vital programs without ensuring any increase in revenues to contribute to deficit reduction. However, critical decisions will be made over the next few months that will determine whether there will be even deeper cuts – or whether millionaires and corporations will be required to contribute their fair share.”
- Nearly $1 trillion in discretionary spending cuts over ten years. More than half of the cuts would come from non-defense spending. However, another provision means that discretionary programs dealing with education, aging and poverty programs cannot be reduced to shoulder increased defense spending, at least initially.
- A bipartisan congressional “super-committee” charged with proposing another $1.5 trillion in deficit reduction over ten years. The super-committee may consider further cuts to discretionary programs; cuts to any entitlement program (including safety net programs such as Medicaid, Social Security, and SNAP/Food Stamps); and revenue increases, in any combination. The committee’s recommendations will receive an up or down vote by the end of 2011.
- Automatic cuts (split 50/50 between defense and non-defense) to take effect in 2013 if the super-committee’s plan is not enacted or fails to achieve at least $1.2 trillion in deficit reduction. Key mandatory safety net programs, such as Medicaid, Social Security, and SNAP/Food Stamps, would be exempt from automatic cuts, as they have been in past automatic deficit reduction plans; Medicare cuts would be capped and limited to providers.
- The deal does not require any increased revenues to contribute to deficit reduction (tax cuts enacted during the Bush era are a major cause of increased deficits). However, the super-committee will have the authority to raise revenue as part of its deficit reduction plan.
What will be cut immediately? Initial cuts will come from so-called discretionary funding. The National Journal has a good summary. You can see details for each sector using the following links:
• EDUCATION: Less Money for Grants • HOMELAND SECURITY: Natural Disaster Relief Affected • FOREIGN AFFAIRS: Aid Targeted • HEALTH CARE: Medicare Safe … for Now • DEFENSE: Cuts, and More Cuts?
• ENERGY/ENVIRONMENT: Program, Subsidy Cuts • TECHNOLOGY: No Effect
The good news for many is that neither Medicaid, Medicare, or Social Security will be included in the original round of cuts. The bad news all of these programs are vulnerable when additional cuts are made by the Super Committee.
Several viewpoints on the deal: The following links provide various opinions on the wisdom and impacts of the ” new-New Deal” ranging from the President himself, to critical views from the left and the right. You can probably guess my own views, but now its time for yours:
President Obama (video)
Paul Krugman (Nobel Laureate Economist, Columnist NY Times)
Robert Reich (Former U.S. Labor Secretary under Clinton)
Congresswoman Michele Bachmann (Presidential Candidate, R-MN)
Senator Bernie Sanders (Ind-VT)
Newt Gingrich Republican Presidential Candidate (interesting video on Fox)
We hold these truths to be self-effacing, to hide and to hold onto our wallets, until our nations dirth do us part. The “super committee” will meet and allocate new funds for new items located in the districts of newly elected Congressmen. All of which that will make working wages the same size as images generated by Scanning Electron Microscopes, at the 10k magnifying setting. Die reich sind reicher und de poorer be mo po.
Unbelievable!! The GOP holds the US hostage demanding to cut funding and jobs at a time when we need people to work while taking revenues off the proverbial table. What are they thinking?
I say, lower the tax rates but make it a straight tax with no loopholes. Everyone, including corporations pay their fair share.
One of the best analyses has been Richard D. Wolff. Called “A Tale of Two Lootings,” The article was posted by Truthout on August 3, 2011: The link is:
http://www.truth-out.org/tale-two-lootings/1312292014
Richard D. Wolff is Professor of Economics Emeritus, University of Massachusetts, Amherst where he taught economics from 1973 to 2008. He is currently a Visiting Professor in the Graduate Program in International Affairs of the New School University, New York City.
As for the debt ceiling deal which by no means solves the problem but serves as a bandaid or temporary fix to keep the govt. operational- with over 2 trillion for spending- I would hope Congress think more about ‘intense’ domestic job creation from the public and private sector and growing the economy from all those bailouts and stimulus fundings therby “lowering” the debt ceiling economically and in the near term put The US back in the black.
I agree with Chris; the problem is an astounding divorce between the financial system from jobs and the needs of the public. One solution might be to tax corporate income based on the jobs created — a firm that built a factory in the U.S. would get a lucrative break, whereas a firm that invested abroad or in some Wall Street gamble would have to pay a higher rate or penalty. Also, the next bailout should go not to Wall Street but to small businesses, workers, families, etc. After all, America is supposed to be “a nation of the people, by the people and for the people.”
Thanks for your comment.
I don’t mind paying more in taxes, but I want it done equitablly. It just isn’t right to keep slamming the working folk and middle class and let the rich skate. Close the tax loopholes and make everyone pay their fair share. You know how I feel about all this. Thanks for giving me the opportunity to vent. And let me tell you in closing, my 81 year old mother, Republican all her adult like, said to me the other day,”I don’t know what I ever saw in those Republicans. The are just terrible. They are impossible to work with.” I NEVER thought I would hear that out of my mother’s voice.
Cathy, Perhaps the GOP should pay some attention to your mom! You’ll find this link interesting; it’s a TV ad featuring a Wisconsin life long Republican whose
endorsing the Democratic candidate due to his concerns about education and his kids.