So is it a GOOD DEAL?
Posted by Fred Scheibl on July 31, 2011 · 3 Comments
So what’s in this new “deal”?
According to the Powerpoint released by the Speaker’s office (CLICK HERE), it is a good deal. Response from both sides of the aisle have been mixed though, and most are waiting to read the real bill. They better be quick though as they will likely have to vote on it tomorrow.
Here’s what seem like good things:
- No Tax Hikes are included in the bill
- Cuts more over 10 years than the debt ceiling is raised
- Cuts and caps discretionary spending
- First “tranche” is $900B increase now, second “tranche” needs to be acted on by Congress next year
- Second “tranche” of $1.5T enacted if BBA sent to the states by year end OR joint committee cuts spending (by Thanksgiving) more than another $1.5T
- Triggers require across the board cuts if caps are violated
- According to the Powerpoint, it makes it “impossible” for the Joint Committee to increase taxes
Some not so good things (not all mentioned in the Powerpoint):
- Spending cuts are back loaded – first two years are pocket change.
- Requires 12 member bipartisan “joint committee” to agree on second round of cuts – if no agreement, automatic cuts are applied to Medicare (doctors and providers get cut – not beneficiaries) and Defense. Medicaid, Social Security, Veterans and military pay are exempt
- Powerpoint claims that committee cannot raise taxes, yet one analysis implies that the Bush tax cuts will be allowed to expire – effectively Obama’s tax on “the rich”. Will have to wait and see on that one.
So is this a good deal or not? My thought is that we may have been snookered again, just like with the continuing resolution earlier in the year. The democrats orchestrated this to be resolved at the last minute and the House will be asked to vote on it without having even a full day to consider the ramifications. Washington at its UGLIEST!
I withhold my judgement until I can read the bill. So should you.
Meanwhile, the Whitehouse is crowing about the good deal they negotiated and how tax increases are on the table, and that they’re counting on the expiration of the Bush Tax cuts to give them what they want? What am I missing?
White House on Debt Deal
Unfortunately, I think this is a futile attempt to control spending. The next Congress is not beholden to this deal and can create their own priorities for spending. They then say these new priorities are a crisis that must be funded. A balanced budget amendment would surely help but it is a long way off I’m afraid. Still lots of work to do!
Compromise to some extent was needed . . .but this goes too far and is not tight enough to strengthen our economy . . .just more of the same!