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Open wide for the debt ceiling sandwich
After weeks of partisan bickering, President Obama and congressional leaders seem to have reached a deal Sunday night to raise the government’s debt ceiling. For now, it looks like they might avoid a government default, but they still haven’t settled the crucial issue of federal spending. Obama gets an immediate $2.4 trillion extension of the nation’s $14.3 trillion debt ceiling in exchange for the promise of approximately $2.4 trillion in spending cuts spaced out over the 2012-2021 period. That’s a pretty long road down which to kick the can. The Congressional Budget Office has released its analysis of the deal:
- Establish caps on discretionary spending through 2021;
- Allow for certain amounts of additional spending for “program integrity” initiatives aimed at reducing the amount of improper benefit payments;
- Make changes to the Pell Grant and student loan programs;
- Require that the House of Representatives and the Senate vote on a joint resolution proposing a balanced budget amendment to the Constitution;
- Establish a procedure to increase the debt limit by $400 billion initially and procedures that would allow the limit to be raised further in two additional steps, for a cumulative increase of between $2.1 trillion and $2.4 trillion;
- Reinstate and modify certain budget process rules;
- Create a Congressional Joint Select Committee on Deficit Reduction to propose further deficit reduction, with a stated goal of achieving at least $1.5 trillion in budgetary savings over 10 years; and
- Establish automatic procedures for reducing spending by as much as $1.2 trillion if legislation originating with the new joint select committee does not achieve such savings.
Both sides are complaining that they don’t like the compromises contained in the agreement, which probably indicates that this is as much as either side is likely to give or receive.
"It's a huge sh*t sandwich, and we're all gonna have to take a bite."
Speaker Boehner is claiming, “The White House bid to raise taxes has been shut down.” But President Obama is undoubtedly counting on the Bush tax cuts to expire in 2013. This will result in a de facto$3.5 trillion tax increase. And all Obama will need to do is invoke his class warfare rhetoric to claim “those evil rich aren’t paying their fair share” and therefore deserve to be robbed of additional income. Boehner will be left holding a bag full of his own hot air.
Nancy Pelosi is complaining that she doesn’t know if she can support the deal without knowing all the details.
“We all agree that our nation cannot default on our obligations and that we must honor our nation’s commitments to our seniors, and our men and women in the military,” she said. “I look forward to reviewing the legislation with my caucus to see what level of support we can provide.” [Psst! Hey Nancy! You're gonna have to pass the debt deal to find out what's in it. — FMP]
Conservatives are calling this deal a sh*t sandwich because of cuts in defense spending at a time when we’re fighting wars in Iraq, Afghanistan, Libya, Yemen, and Somalia.
Liberals are calling this deal a “sugar-coated Satan sandwich” because of cuts in domestic spending, including Social Security, Medicare and Medicaid.
Rep. Emanuel Cleaver, chairman of the Congressional Black Caucus, said early reports of the new deal appeared to be “a sugar-coated Satan sandwich.” The Missouri Democrat said the CBC hadn’t yet made a formal declaration that the group would oppose it, “but this is a shady bill.”
“This deal trades people’s livelihoods for the votes of a few unappeasable right-wing radicals, and I will not support it,” ripped Rep. Raúl Grijalva (D-Ariz.), co-chairman of the Congressional Progressive Caucus, before House Democrats had even been briefed. “The lesson today is that Republicans can hold their breath long enough to get what they want.”
The Democrats’ outrage at these cuts is disingenuous at best. Any cuts to Medicare would not affect beneficiaries. Only healthcare providers and insurance companies — the Left’s idea of the “evil rich” — would receive lower payments.
$2.4 trillion dollars in cuts sounds like a lot. But when you look at the fact that this deal continues to raise America’s debt while simply reducing the rate of increased spending over the next 10 years, this “deal” is most definitely a crap sandwich. What the CBO report listed above doesn’t acknowledge is that the so-called cuts in this deal aren’t even real cuts. They use what’s called baseline budgeting, which means reductions in the rate of already-projected spending.
This is your federal budget on “cuts”
For instance, let’s say you spend $40 per month going to the movies. And next year, you budgeted to spend $45 per month going to the movies. The debt reductions in this deal would be the equivalent of you saying that next year you’ll only spend $43 per month going to the movies. That’s not a cut, just a reduction in the projected increase.
Jazz Shaw put it in more realistic terms:
Even if you reduce the deficit by roughly $3T over the next ten years, that means that instead of our nation debt ballooning to $26T one decade out, it will only go up to $23T.
Real cuts would eliminate the multitude of frivolous government spending programs like the $7.7 billion that were contained in Obama’s $410 billion Omnibus Spending Bill of 2009:
• $2.1 million for the Center for Grape Genetics in New York.
• $1.7 million for a honey bee factory in Weslaco, Tex.
• $1.7 million for pig odor research in Iowa.
• $1 million for Mormon cricket control in Utah.
• $819,000 for catfish genetics research in Alabama.
• $650,000 for beaver management in North Carolina and Mississippi.
• $951,500 for Sustainable Las Vegas.
• $2 million “for the promotion of astronomy” in Hawaii
• $167,000 for the Autry National Center for the American West in Los Angeles.
• $238,000 for the Polynesian Voyaging Society in Hawaii.
• $200,000 for a tattoo removal violence outreach program to help gang members or others shed visible signs of their past.
• $209,000 to improve blueberry production and efficiency in Georgia.
The current debt deal continues this kind of wasteful status quo government spending. Programs like these will still get an increase in their funding. It’s just that their budget increases won’t be quite as cushy as they would have otherwise been.
What makes this sandwich stink even more is the possibility that America’s real debt is actually much higher than the reported $14 trillion…ABC New Radio is saying it’s more like $211 trillion
Bloomberg BusinessWeek, in its current cover story “Why The Current Debt Crisis is Even Worse Than You Think,” argues the true measure of U.S. debt ought to be the so-called fiscal gap. That’s the present value of the difference between the nation’s total revenues and its total obligations. That comes to $211 trillion.
So what’s the difference between a sh*t sandwich and a Satan sandwich?
Hot sauce. (h/t: Bob Hicks)
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RELATED: Sweetness & Light has a must-read fisking of the White House’s fact sheet which lists the details of the debt deal. Summary: “So only soldiers and doctors will be cut. Not any Democrat constituents.”
Posted by FullMetalPatriot
12th gen. American, Constitutionalist, Harley-riding Texan, gun owner & NRA member, blogger, illustrator, Florida Gator alumnus. #TCOT
12th gen. American, Constitutionalist, Harley-riding Texan, gun owner & NRA member, blogger, illustrator, Florida Gator alumnus. #TCOT
You are right. It is just smoke and mirrors. A testament to how well the politicians can fool the people and themselves. And maybe the rest of the world will buy it. But I don’t think it will last for long. I just hope that America will eventually admit defeat graciously, and allow the rise of other world powers. History reveals otherwise. Other nations, like the USA in 1776 and Manifest Destiny in the 19th century, will be eager to declare their dominance and superiority, and project it over the world.
[...] borrow $.44 of every federal dollar spent. We already have $14.5 trillion in debt and, after last week’s agreement, more rampant spending will skyrocket to over $22 trillion. We cannot sustain this Keynesian [...]