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August 01, 2011 06:47 AM UTC

Tentative Debt-Ceiling Deal Announced

  • 42 Comments
  • by: Colorado Pols

Politico Sunday evening:

With their backs to the wall, the White House and congressional leaders reached a landmark debt ceiling deal Sunday night after weeks of confrontation that pushed the nation to the brink of default and dramatized the huge divide between the Republican House and President Barack Obama.

Obama won greater certainty in managing the Treasury’s borrowing needs and committed himself to at least $2.4 trillion in new deficit reduction but without ever getting any concession from the GOP on accepting new tax revenues as part of the debt equation…

“Is this the deal I would have preferred? No,” Obama said candidly in announcing the agreement. “We could have made the tough choices required on entitlement reform and tax reform right now rather than through a special congressional committee process. But this compromise does make a serious down payment on the deficit reduction we need … and ensures that will we not face this same crisis in six months or eight months or twelve months.”

Don’t miss Speaker John Boehner’s kick-ass “Holding President Obama Accountable” slideshow after the jump: though as you can expect, the White House has a slightly different take on today’s deal. It’s safe to say we’ll be debating the winners and losers of these weeks of debt-ceiling hot air a lot–assuming this really is the end of the crisis. Democrats are already complaining about onerous enforcement mechanisms for future cuts in this bill, while the “Tea Party”…well, forget it. They were never going to be happy short of Washington literally on fire.

But after all you’ve been through in the last few weeks, it might be prudent keep the default-dodging celebrations in check until a bill actually arrives on the President’s desk.

Comments

42 thoughts on “Tentative Debt-Ceiling Deal Announced

  1. The Tea Party may be unhappy with this bill, but as far as I can tell the Democrats got only two things out of this turkey:

    1) The government won’t default on Tuesday – assuming the bill passes.  IMHO that’s all this bill ever should have been about, since Republicans already passed a budget that told the President to spend money that they’re now telling him he can’t spend.

    2) Social Security and Medicaid are protected from cuts should an overall deal on the larger $1.5 trillion in cuts fail.  Medicare (providers) aren’t so lucky.

    That’s not a whole lot to get in a bill that otherwise gives Republicans pretty much everything else they wanted.

  2. President Obama in his second term will use the expired tax cuts for the wealthy to fund badly needed education and infrastructure projects:

    Sequester Would Provide a Strong Incentive for Both Sides to Come to the Table:  If the fiscal committee took no action, the deal would automatically add nearly $500 billion in defense cuts on top of cuts already made, and, at the same time, it would cut critical programs like infrastructure or education.  



    The Bush tax cuts expire as of 1/1/2013, the same date that the spending sequester would go into effect. These two events together will force balanced deficit reduction. Absent a balanced deal, it would enable the President to use his veto pen to ensure nearly $1 trillion in additional deficit reduction by not extending the high-income tax cuts.

    1. The “Super Congress” joint committee is tasked with both targeting the final $1.5 trillion in budget cuts and also completing a tax overhaul package which cannot generate any new revenue over today’s tax code.

      If the committee’s proposal doesn’t become law, we get to watch education cuts, park service cuts, cuts to Medicare…  The expiration of the Bush tax cuts will go straight to deficit reduction – the President cannot allocate the new-found money to education or infrastructure.

      1. … I believe you are correct in your interpretation.  It all goes to deficit reduction, any way you slice it.

        Wonderful — who needs to grow the economy and create more jobs when the obvious priority is to shrink the economy while paying off the credit card debit run up by some anonymous nobody that Obama replaced.

      2. also completing a tax overhaul package which cannot generate any new revenue over today’s tax code.

        Can you give me a source for this other than Boehner’s slide show?  The White House website is saying something very different.

        It’s not that I don’t believe you. I just can’t find anything.

      3. If the committee’s proposal doesn’t become law, we get to watch education cuts, park service cuts, cuts to Medicare…

        we’re giving just what the sick cowardly bastards want — this “trigger” mechanism in Reid’s bill makes mandatory deep to-the-bone cuts if the idiotic Super Congress fails to produce a proposal that can pass.

        GOP will just max out their obstructionist game to any proposal posed and then stand by snickering while services get axed.  No fingerprints on the crime since the cuts are written into the deal.  

        Their “we didn’t do it” ploy covers their culpability in tearing down SSA & Medicare & basic social services.  How can Dems & Progressives agree to this?  

        Dems give them the gun, tie up the hostage, a write the friggin’ ransom note and then wonder how this could ever happen.  Pathetic.  

           

    2. On 1/1/2013, all of the Bush tax cuts expire – including the tax cuts for the middle and working class – not just the rich. We will be back where we were at the end of 2010. We will need an affirmative bill to extend the tax cuts for the middle class and the Republicans won’t even allow a vote unless we extend the tax cuts for the rich.

      The Bush tax cuts were wrong headed when they were originally passed.  We need to let all of them expire.  That would generate a reduction in the deficit of $5.1 trillion over the next ten years.  Problem solved.

  3. WTF???  No, really, . . . what the fuck???

    The Republicans use the opportunity of what should be a pro forma vote to extend a fictional debt ceiling to extort spending cuts in the middle of the worst goddam recession in four generations.  And, they manage to do it without a single dollar of additional needed revenue enhancements.

    That’s gonna be some hell of a debate.

    1. Most economists agree that this is the last situation in which we should be making any cuts in government spending, that when unemployment is high and the private sector is failing to provide jobs to move the economy, that’s when you need government spending to get the economy moving again, not cuts.  And it’s not as if there aren’t plenty of things we need that would require massive employment and which can only be funded by government like the big infrastructure projects that are so long overdue.

      But, hey, if things get worse we can count on the R message machine to take advantage and we can count on Dems to fail miserably to effectively counter with the truth. No wonder Boehner and McConnell are smiling in their pictures.  You don’t see very many smiley Dems.  Glass half full cheerleading is just putting lipstick on the pig. It’s still a pig.

      http://money.cnn.com/2011/07/2…  

      1. … that after this pig (turkey, lemon…) is passed – assuming Boehner can get it past his caucus – that Pelosi, Reid and Obama turn around and lambaste it.  I know they’re all making forced happy faces for it right now, but this is, as you say, a pig, and it deserves to be shown for the steaming pile of dung that it is, and IMHO Democrats should distance themselves from every aspect of it other than “we were willing to rescue our nation from being held at gunpoint by Republican extremists”.

          1. it here. IF we can educate the American voter, (I know, I know) we can hang this around the neck of those greedy bastards in 2012 and watch their heads explode on New Years Day, 2013.

            However, BC, there is a bigger problem. A comment in another thread about Tipton, got me to thinking about your brilliant “Chihuahua Prevarication Meter.” Apparently, so are others.

            I looked into it, and rumor has it that China is buying up all our chihuahuas. They got a head start with the glut of chihuahuas in Southern Califonia, and now they are apparently (if you can believe the spotty reports) trying to corner the market. Once they have rounded up all the American chihuahuas, we will be unable to accurately gauge the truthiness of our Leaders.

            In order to survive, we will be forced to buy back our chihuahuas from China at outrageous prices, or even invade some other country and take their chihu…wait…does France have chihuahuas?    

            1. given credit to Blue Cat for the creation of the “Chihuahua Prevarication Meter” when it was in fact, Jeffco Blue.

              So sorry. please forgive me

      2. The winners (rich) and losers (everybody else) are obvious. It makes he heartsick to see how much we’ve given away to the right, the real and the framing. It’s another years of setback for the progressive cause we’ll have to fix someday.

        Politically, the winners and losers aren’t as clear to me. It was always the case that the responsible party (Democrats) would do what they had to to avoid default. OTOH, Republicans like Scott Tipton couldn’t even agree that the debt ceiling was a problem until the end of last week! The GOP had its own unity problems but knew they had us by the balls. When confronted with a hostage taker, the question you need answered is whether they are really willing to shoot the hostage. I personally believe, based on Tipton’s words and Michele Bachmann’s and all the rest, that they were.

        IF, and it’s a big if, the voters realize that the biggest problem is the historically awful choice made at the ballot box in 2010, Dems could turn this fight, and even their concessions, into a positive.

        Signed,

        The Indefatigable Optimist’s Club

    2. TPM is reporting that Grover Norquist is supporting the deal:

      House Speaker John Boehner (R-OH) has at least one powerful ally in his latest effort to sell the GOP on a debt deal: tax hater extraordinaire, Grover Norquist.

      Shortly after President Obama took to the air and urged both houses of congress to pass the newly thrashed-out debt deal, Norquist tweeted: “Real spending cuts. No tax hike. Gang of Six said it could not be done. 1982, 1990 are now bad memories we learned from. Onward.”

      Now, I can’t be sure, but I assume he may know more than we do. If he likes it, we’re screwed.

    1. It’s nice to see you admitting that, David, but I have some bad news for you…

      There’s still a chance that neither the Tea Party nor House Democrats go for this “compromise”, and Boehner is once again left swinging in the breeze.  And it’s not at all certain that it will even survive the Senate intact; the Military – Industrial Complex is apparently whining about the large axe dangling over the head of military spending, and its minions in the Senate will be trying to amend the bill to please them.

      In other words, it can still get worse.

  4. When you say “our children,” most of you are of an age such that your “children” are adults, not children.

    When you talk about not passing your debt on to us, and not mortgaging our futures for your temporary comfort, it sounds like you believe you have our best interests in mind. If that’s the case, why have you refused to pass on any of your opportunity to us?

    You had affordable education. You had the promise of a good, union job if you learned a trade, and the honest belief that your government wanted to help you keep that job. You may not have had universal healthcare, but you did have a social safety net if you fell far enough. You might have grown up in an area of racial inequity and institutional patriarchy, but you had robust movements working to change it, and when you were young, many of you marched with either the civil rights movement, the early feminists, or both. I wasn’t there, but from what I hear, you were working to create a better world for your children.

    Your children are grown up, and your generation is in charge, and what are you protecting? Certainly not the opportunities that got you there. Certainly not us. You don’t have to mortgage our future. You’ve already made surviving as a young adult so unaffordable that most of my generation have mortgaged our own futures with student loans, medical debt, and, yep, credit card debt–but that’s not your fault, right? Because we should have taken personal responsibility and avoided credit? I did, but not all of my friends did the same, and that doesn’t make them less than me–that makes them consumers who were failed by an organized, effective, and downright malicious movement by government to deregulate industries with a vested interest in destroying their own future customers’ economic prospects in order to maximize profits today.

    Ask me how many talented young people I know who can’t reach their full potential because opportunity today is restricted to the privileged and the lucky; the not quite lucky enough and not quite privileged enough are left out. And ask me how many more are going to look forward and see a bleak future and never even bother trying to develop their full potential.

    It’s not about hardship. Young people have always been capable of overcoming hardship. The Greatest Generation came from the Great Depression.

    It’s about the basic fact that nobody seems to want my generation to succeed. We hear “suffer and pay your dues” and “you kids are the entitlement generation” plenty. Entitlement generation? Why, yes, I do feel entitled. Entitled to a world in which if young people want to use every ounce of the talents God or Darwin gave us to make that world a better place, our elders at the very least refrain from actively, knowingly trying to prevent us from making the world one iota better, and all the while use us as rhetorical devices to push their own agendas.

    I’m doing damn well in life so far, and I’m happy as a clam. I love the whole world and everything in it. I am intensely grateful to have so far been one of the lucky ones, and I pray to whatever may be listening that my luck holds. There are many people more talented and wiser than me who are working a minimum wage job, not to pay their dues until the next thing comes along, but because that’s all they can reasonably expect in a world that not only doesn’t value them, but actively trades away their future at every opportunity.

    If our representatives in the US Congress and Senate want to create a world of opportunity and equality for their children, I ask that they take one, single, goldarn moment and ask themselves what this debt deal does for kids of the same generation who don’t have a parent in government.

    If that’s not really what they want, I’d sure like it if they’d stop with the platitudes about every deal being “for the children,” and not heaping “one more dollar of debt” on our backs (that one, of course, is from the guy who doesn’t pay his child support). This deal isn’t for your children. It’s a desperate capitulation to people who are willing to sacrifice your children and their own for, realistically, almost no material benefit to anyone. This isn’t a giveaway to the ruling class.

    It’s a giveaway of American promise and opportunity. It’s a final demonstration that one party no longer believes America can succeed.

    1. I was born in 1941 and trust me, my generation is NOT in charge.  PC, I really don’t need this crap, okay?  You are speaking specifically to the old fools in the tea party, a gd minority, and who ever the F is funding that radical group..

      This crap is “divide and conquer” and it does not do a damm thing to help end this destructive divide in our country, today.

      I listen to talk radio because my eyes are going…and when I try to raise the alarm about the dangerous propaganda 24/7 I am vilified by your generation….who whine like hell when the fascists take over.

      I worked my way through college; to  my everlasting shame, I did not march in the 60s.  But, my generation did.  They brought civil rights and most importantly, they got people the right to vote at age 18.  So one thing you might consider is WTF your generation sit out the 2010 election..mine did not.  

      I could go on, but I am just pissed.  The problem with your generation is you don’t know history and IMHO, when things get tough, you quit.

      1. “Who likes to use my generation for political gain.”

        If you’re not one of the ones who says you’re doing whatever lousy thing you’re doing or supporting whatever lousy thing you’re supporting that is going to make millions of people suffer “for the children” and “to avoid mortgaging our children’s futures,” I’m not talking to you.

        But frankly, your generation had a lot more opportunity than mine does, and you had the benefit of living in a country where most everyone believed that the best was yet to come. Modern declinism is an onerous burden on the people just beginning their careers.

        You worked your way through college, but I presume you’re out of debt today. I’m working my way through college, but I’ve had the excellent fortune of landing with a company that gives me some help, and being in a degree program that I can get done very cheaply by today’s standards. If I were a med student instead, I’d probably still be in debt by the time I’m your age just to pursue a career of saving lives. That should be a choice people can make without giving up their own financial futures and retirement potential. (But doctors make a lot of money! Yes, specialist surgeons do–not your family doctor, and that’s why there are fewer family doctors every year.)

        It looks like the New Deal was a two-generation deal: My grandparents and parents’ generation. If the Tea Party has their way, nobody else will ever benefit from it. But we’ll certainly be expected to pay our taxes for it, of course. Most every young person I talk to fully expects to pay social security and medicare taxes for their entire working lives and never collect benefits from either. Hell, it’s been that way since I started working–and I started at age twelve.

        Most everyone who’s been through 20 or 30 years as an American adult seems to believe our country is going downhill, has no potential to fully recover, and will lose its position in the world economy. That’s a scary landscape to look at when I have a good 40-50 years left in my anticipated working life (figuring on working into my seventies, God willing I live that long, since I’ll need to once they finally kill social security–pensions long ago went the way of the horse and buggy for private industry, and they’ll be leaving government jobs soon, too). And again, I’m one of the luckiest ones.

        You’ll please pardon me if I’m a little worried for my generation, and a little frustrated with some people from yours. It’s the oldest story in the book: The young blame the old and the old blame the young. What’s that (possibly apocryphal) Socrates quote, about youth no longer standing to greet their elders? But the difference here is that the old in the right wing of the Republican party are no longer bullying the young because it’s what’s done and makes them stronger; they’re actively cutting off opportunity because they don’t believe in American potential and camaraderie anymore.  

        1. I absolutely understand that.  I see folks in those age groups (including in my own family) struggling — and I’m still struggling (expect to work forever).  

          But I firmly believe we need to be very careful not to pit generation against generation.  It may appear to be a generational issue — ‘you guys had it better’ — but in truth it’s political.  It’s who we elect as leaders, now so irretrievably driven by money in politics.  We’re electing the wrong people and they’re making the wrong decisions.  THAT’S why are country is headed for second-world status.  My generation is not trying to cheat younger generations, but right-wing extremists are all about Number One, not country, not their own children or grandchildren.

          1. From people who are actively trying to take me and the rest of my generation and shove us into a little box where we can’t succeed, and if things go their way, we just get angry and get susceptible to their fascist rhetoric. I’m not surprised that the right wing is self interested. What else is new?

            I’m just not going to sit quietly in the corner while they do their self-interested thing and blame it on my interests. They assume, often rightly, that they can count on the young to not even vote, much less actually speak for their own interests. To hell with that paradigm. I’ve never sat out an election no matter how small, I’m involved, I vote, I volunteer, I donate, and from now on, they can count on me TO speak for my interests every time that they steal from my generation and claim they’re doing it FOR my generation.  

            1. One of the most troublesome of adult characteristics is amnesia. I am ever amazed at the ability of many people to forget their own past… or to put it into some bizarre context wherein they simply have forgotten all of the experiences of their youth.

              Beyond my own awareness of the generational gap in my personal experience, I was taken with an essay, “The Student as Nigger” by Jerry Farber, written in the LA Free Press in 1967. I have to admit, I read it shortly after it was released.

              I have since been sensititive to the remarkable ability of many people to deny that a point of view held by them in their youth, now is invalid, simply because they have now grown up and the subject is their kids.

              This inequity extends into every aspect of the relationship between succeeding generations. It’s stupid.

                   

        2. But frankly, your generation had a lot more opportunity than mine does, and you had the benefit of living in a country where most everyone believed that the best was yet to come. Modern declinism is an onerous burden on the people just beginning their careers.

          In my generation, there were no such thing as student loans…except for hard to get National Defense Education Act loans for majoring in math, physics, and language.

          If there were loans for law school or medical school, I didn’t know about them.

          What I do know is that blacks and women and other racial minorities could NOT get into most law schools and medical schools.  I know that people were routinely denied jobs because of their race, their religion, their gender or for what ever gd  reason …they could also be denied legally access to public accommodations, housing, public transportation…etc.  All of which had a tremendous economic consequence on a whole lot of the population.

          What I remember from the sixties was that the women were scared to death they were going to become pregnant…abortion was illegal…and for most of the decade so was birth control in a lot of states….even after it became legal, birth control was illegal in a lot of states for single people.   Men were scared to death they were going to be drafted and sent off to a war they didn’t support and where they would probably be killed.  All of this could happen before either group was old enough to vote.

          Don’t romantize the past.  For the simple reason, false premises will not help you fight the battles unique to your generation.  Now, the Tea Party is not made up of old people.  I did see grey hairs waving signs “Keep the government off my medicare.”  However, when I look at who has been elected Congress with the Tea Party label…..I see white, young, males, with southern accents……(.the grandchildren of the white young males from the South who fought tooth and nail against civil rights..) ….

          Now I will tell you something…Not that long ago, I resented like hell the social security crowd, who were secure and smug…I would look at them all wearing Rockports…when I had cardboard to cover the holes in mine….wasn’t fair.

          Redressing the balance so that kids can as good a deal as seniors is legitimate.  Other than that, my generation is not your problem.  We are just another straw man thrown out to distract you ….

      2. that you are acting like an old curmudgeon! I got through college with a small scholarship and a lot of hard work.  I marched for civil rights and got a lot of grief from my church and lost friends because of it.  

        Cowgirl gave us an honest, thoughtful response to the story.  Good for her and by and large I agree

  5. I just finished reading the description of “The Deal” from John Boehner and the White House. They each provide very different descriptions.  Now, either someone is lying or they really don’t have a deal.

    As an example, Boehner says that there will be no “second tranche of the debt limit increase” unless a balanced budget amendment is passed and sent to the states.” The White House does not even mention a balanced budget amendment.  Boehner says the the second tranche is available only from cuts in spending. The White House says that increases in revenues will be part of the deficit reduction number necessary to avoid the across the board cuts.

    I am waiting to see the bill.

  6. That’s the only debate that will happen if/when this “crisis” passes.  And, he won’t have a freaking answer.

    I am so sad to say that this is a huge Obama fail.

    1. I am so sad to say that this is a huge Obama fail.

      believe you. You are not sad to say it at all.

      This appears to be a victory for the “free market” criminals on Wall Street, K Street, and Easy Street.

      Appearances can be deceiving.

    2. Since the Bush tax cuts have been in effect for 10 years and weren’t touched now or in December, where are the jobs the “job creators” are generating by the preservation of the Bush tax cuts?

      Methinks the “job creators”  invest in multinational corporations that create jobs overseas, not in the U.S. Where the jobs are created is secondary to maximizing return on investment.  

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