The terms of the deal are these: the debt ceiling will initially be raised by $400 billion which will be accompanied by almost $1 trillion in spending cuts. Then, a bipartisan committee of members from both the House and the Senate will submit recommendations to Congress over how to reduce the deficit a further $2 trillion; according to President Obama, both tax reform and spending cuts will be on the table for the committee. The committee will be required to report to Congress by Thanksgiving of this year and its recommendations will be subject to an up-or-down vote. The set of recommendations cannot be filibustered, and it cannot be amended. If Congress has not enacted these suggestions by late December, a series of across-the-board spending cuts will be triggered, notably cutting from Medicare and defense spending.
Let's start with the bad – there is so much wrong with this plan for Democrats that I don't even know where to begin. The plan includes no guarantee of even closing absurd tax loopholes, let alone broader tax reform or new revenues; while it is technically possible that the bipartisan committee could recommend new revenues, it is HIGHLY unlikely that such a recommendation would pass the House of Representatives. Indeed, all House Republicans need to do is vote down the committee report to ensure that the entire debt ceiling deal will be paid for with spending cuts, their goal from the start. Many liberals are (fairly) feeling like they've been sold out by the President, a feeling that has become disturbingly common over the past two years.
Still, though, all is not lost for liberals. Yes, the deal sucks for them, but it also has a fairly significant silver lining. First of all, there are no entitlement cuts in the first phase of spending cuts – a victory considering that everyone from Speaker Boehner to President Obama has brought them up in recent weeks. Additionally, the trigger cuts (should the committee's report get rejected) are weighted heavily toward cutting defense spending, with these cuts reportedly making up almost half of the second phase of deficit reduction. While there's an argument over whether or not this is, you know, good for the country, the fact remains that Democrats have been aiming to cut defense spending for years, and this deal gives them a politically-tenable way of doing it.
Finally, if the committee's report gets voted down by House Republicans, as it absolutely will, should it have the audacity to recommend taxing the rich, Democrats will enter the 2012 election cycle with talking points blaming Republicans for cutting Medicare and defense, two hugely popular programs. Combined with the continued ability to yell about Paul Ryan's Medicare plan from earlier this year (side note: holy crap, it feels like that was years ago), it all adds up to a powerful messaging campaign for Democrats, something that will make Republicans think twice before triggering those cuts.
Oh, and there's one more positive thing for Democrats: we will still have an economy on Wednesday morning. As much as liberals like to believe that the public would have blamed a default on Republicans, it would have destroyed any semblance of an economic recovery that currently exists and set the economy back at least a year, if not more. Politics aside, the president is the one who gets hurt if the economy is bad at election time. By passing this deal, Democrats put the president in a much better position to win in 2012, a victory in itself for the party. Not to mention the fact that we will have averted an economic collapse unlike any in decades. That's good too.
Of course, before we all go counting our debt ceiling chickens (you don't have those?), it's important to remember that this deal is not done until President Obama signs it into law. With House Democrats threatening to rebel, Speaker Boehner may need more Republicans than previously thought to pass the deal, something that, as we have learned from his failure to pass his own bill on Thursday, is easier said than done. The Speaker was reportedly the last congressional leader to agree to this deal and was not happy about the amount of cuts in defense spending in the trigger plan, a concern his caucus will undoubtedly share. Also, Tea Partiers who barely passed a much more conservative bill on Friday won't be happy about this. The Washington Post's Ezra Klein is reporting that Boehner's presentation to his caucus about the deal contains several glaring mistakes that make the deal seem more conservative than it actually is. Whether this was a simple mistake or an attempt at misdirection by Boehner is unknown, but if it was intentional, that's going to lead to some serious consequences for the Speaker and for the deal.
Overall, keep holding your breath for this deal to work out, even if you are a Democrat who feels betrayed by the President's compromise. Whether it's fair or not, Democrats ran out of bargaining chips when House Republicans showed they would rather default on our debt than even think about new revenues. Republicans called Democrats' bluff and these are the consequences. But still, there are good things about this compromise, should it make it through Congress, chief among them being that it protects the full faith and credit of the United States. Whether you like it or not, the good outweighs the bad, so, as Speaker Boehner would say, "get your asses in line."
(Note: This post was written on my iPhone while sitting on a bus from New York to Washington, so I wasn't able to add hyperlinks to news stories before posting it. You have my sincerest apologies and a promise that all of this information can be confirmed on Google. Any questions about where I got the info? Ask me in the comments section.)
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1 comments:
Thanks for a cogent analysis of the good and bad news.
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