Obama just gave a press statement.
Says the leaders of both parties in both chambers have reached an agreement “that will reduce the deficit and avoid default.”
Deal is $1 trillion in spending cuts, but not “so abruptly that a drag on our economy.”
Second part of agreement will have further reductions based on bipartison committee to “further reduce the deficit” and “everything on the table.” If no agreement made, cuts automatically take place.
Also gave the usual class warfare argument about how he still believes the wealthiest should contribute more. Also mentioned that not popular with Democrats but need to consider modest adjustments to entitlements.
And in the most important part of the statement, Obama thanked the public for their tweets.
Boehner’s office also released a PowerPoint presentation on the details of the deal (according to Fox News), I’ll post it if I can find it. Here’s the full PowerPoint.
Here’s the slide on a Balanced Budget Amendment:
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Comments
How can abrupt spending cuts be a drag on the economy? Oh, shush, I know what he means, but really? For Obama to agree to spending cuts is to go against Keynesian theory, or to admit that it isn’t working. The little toss to the idea of avoiding a “drag on the economy” is likely true for the short term.
Wanna really avoid a drag on the economy? Impeach Obama and then throw him out.
Here is my concern, defense cuts and medicare/SS cuts are not equal. A cut to defense is going to be far worse over the short and medium terms while entitlement cuts without reform is just stupid, it doesn’t help anything. I foresee the Democrats voting down whatever comes out of this committee simply because the cuts will hurt Republicans more while the Dems may be willing to take a hit on entitlement spending if they think it will help them politically. They can always increase taxes and spending when they’re back in power.
We have had other budget deals that automatically “trigger” cuts to Medicare/Medicaid. This one affects providers, i.e., your doctor and hospital will be paid less for their services. Consequently, two things will happen; doctors will cease taking Medicare patients or we will have the same thing that over rode another “trigger” once passed that did the same thing to M/M. It was called the “Doc fix.”
And what this will do is gut our military, just like Clinton did when he pushed his budget and then, after 9-11, when we went to war in Afghanistan we had to spend tons of money because Clinton had cut the military budget and we had planes sitting on the tarmacs not able to fly due to lack of parts.
Obama wants to slash the military. That’s what Marxists do. If the military is cut, you can look for the attrition numbers to skyrocket. We lost 1/2 soldiers under Clinton. It will be worse this time.
On Hannity in the last few minutes…
Sen. Vitter: This deal’s spending cuts take place only in Washington, not in the real world. All we’re doing is slowing the growth of government.
Sen. Graham: As a result of this deal we’re walking toward bankruptcy instead of running toward bankruptcy.
My comment: Considering the paltry amounts being “cut” from the growth of government, this deal is inconsequential in terms of real cuts in the size of government.
In essence, the deal is more smoke and mirrors.
I agree w/ you, Vitter, and Graham. The “cuts” are not really cuts. They are merely “spending increases, smaller than the intended increases.” Keep in mind: if Federal spending was frozen at the current outrageous level, the CBO could score that level as a $9 Trillion cut over 10 years.
Washington accounting does not intersect w/ reality.
A deal like this is a compromise. The real problem:
PIMCO chief: Deal won’t prevent downgrading of US AAA credit rating
http://thehill.com/blogs/blog-briefing-room/news/174591-pimco-chief-bill-gross-says-downgrade-of-us-credit-rating-is-coming
For those who don’t PIMCO is the largest bond mutual fund in the world with around $1 trillion dollars under administration.
(Side note: In weighing what Bill Gross, PIMCO’s CEO has to say, keep in mind that PIMCO has been shorting US treasuries since the spring.)
It is a concern to me if the BBA is simply voted on, but not sent to the states for ratification. That being separated out as a stand-alone vote, it’s good to see the BBA being sent to the states as part of the IF/OR in the second bullet.
Nothing about this agreement will stop the addicted-to-spending left. It will infuriate the die-hard socialists (they are apparently suffering from exploding head syndrome about no tax/revenue increases). It will also hurt Conservatives disgusted with both parties, and all sell-outs who won’t hold the line.
This spending addiction must stop. This “compromise” is not good. It is not acceptable. But, it is what is to be expected when Cut, Cap, and Balance has been abandoned.
Will this latest Boehner 7.0/compromise stop a US downgrade? Doubtful. But it does set up the 2012 election putting the economy front and center – with necessary spending cuts again allowing Dems to demagogue about “eeeeevvvvvviiiiiillllll Republicans want to throw Granny off a cliff” if Medicare/Medicaid/Social Security are touched. But then again, Obama and the Senate are the obstructionists, and confirmed liars (Sen. Marco Rubio’s speech was a brilliant revelation of that), which is gold to the Republicans if they are smart enough to use this during Campaign 2012.
Will all this “compromise” pass in the House? Only time will tell.
I just read the full PowerPoint….the provision that says “Total reductions would be equally split between defense and non-defense programs. Across-the-board
cuts would also apply to Medicare” makes me wonder if I will be dying from a terrorist attack or the lack of medical care because of my age….I don’t think I like either thought 🙁
Grain of salt alert: this is coming from E Klein via twitter, but I think there may be some truth here…
Boehner’s powerpoint misstates the deal to his members. 1) The baseline is not specified in the bill, and does not prevent taxes.
2) Boehner suggests that deficit reduction or BBA has to pass for Prez to get second debt increase. Not so. McConnell mechanism.
Now, I don’t know if this was just written hastily or Speaker’s office is trying to mislead House GOP. But it’s wrong.
http://twitter.com/ezraklein/status/97844094906273792
http://twitter.com/ezraklein/status/97844596570210305
http://twitter.com/ezraklein/status/97844433449525249
Conventional wisdom and the MSM will all agree this was a victory for the Hobbits.
Ace reports this conversation from MSNBC:
“Brian Williams: Andrea (Mitchell), you’ve seen ’em come and seen ’em go. This has hardly been a profile in courage. Have you ever seen anything like this?
Andrea Mitchell: … Now its stalemate, its gridlock. And I’ve never seen anything where there has been so little leadership and where people are angry, disgusted and, I think, really rebellious out there. People are wanting change and they don’t know how to get it.
Brian Williams: And a new dynamic, Andrea, in Washington – at least in the time you and I have been watching things. Some members have come to town and they don’t care if they get re-elected. That is a whole new dynamic. They are here for a single issue and are willing to go down in flames at the polls if they achieve it or don’t.
Andrea Mitchell: There has always been anger and animus in among leaders and among the followers – the rank and file, the caucus. But these new members really are willing to tear the place down. And they not only don’t care whether or not are re-elected – they don’t want pork (laughs). There are no inducements to get them to follow the speaker or the other leaders. So they don’t want the traditional methods of buying loyalty here and that was a reform that now has changed the dynamic.
Brian Williams: Alright, Andrea Mitchell from our Washington newsroom. Wish there was better news to report to folks especially about our era in Govt.”
Meanwhile, from Zerohedge:
“And of course, there will be no tax hikes. Bottom line: there will be about $40 billion in actual, real spending cuts until the next, $16.7 trillion debt ceiling limit (from current $14.3 trillion) is hit some time in Q1 2013, at which point it will have to be raised to $20+ trillion. But no really, they are cutting spending and all that.”
It is my understanding that none of these budget cuts go into effect until 2013, AFTER the Bush tax roll backs expire. So Obama will get his tax hikes anyway.
It’s all dog and pony.
http://www.whitehouse.gov/fact-sheet-victory-bipartisan-compromise-economy-american-people
Enforcement mechanism established to force all parties – Republican and Democrat – to agree to balanced deficit reduction. If Committee fails, enforcement mechanism will trigger spending reductions beginning in 2013 – split 50/50 between domestic and defense spending. Enforcement protects Social Security, Medicare beneficiaries, and low-income programs from any cuts.
So 40-50% of the budget (Medicare + Medicaid + etc.) would be protected from any cuts, while Defense (20% of the budget) would be subject to half of the total cuts?
So tell me again, how does this fix things? Give me 1 trillion today, I’ll cut 1 trillion over 10 years. (the Wimpy budget plan)
The only way to fit this is to repeal the Budget Act of 1974 and get away for base line budgets and automatic increases.
We’re doomed.
This is a total BS deal. I fully support any Republicans that refuse to vote for this baloney. They just can’t be honest with the people. When you see Obama rush to give a press conference, you know the deal is NG. I think the members of Congress were beginning to figure out that the public was getting very angry about the unprofessional manner in which both houses were going about this and so they sat down and cobbled together a bunch of crap. I consider myself to not be fooled. We need more Tea Party people and we need to get back the Senate and the WH – period. The people are REAL tired of our political leaders developing all sorts of contrivances of bookkeeping to keep doing exactly what they have been doing for so long. The Republicans totally gave away the nuclear option they had, and that was the ability to totally shut down whatever they didn’t like I the future. What crap!
we will be over 17 trillion by the end of next year, I actually think the increase of 2.4 trillion will be breached but by middle of next year. There isn’t enough growth.
I think I’ve changed my mind, 1 trillion over 10 years is not going to cut it. It has to be actual cuts, like those Sen Corburn did a massive study on, start cutting those redundant programs in addition to slowing the rate of growth.
We deserve a downgrade, this is not solving the root of the problem, just some branches.
Wall Street Journal: Those stupid filthy hobbits are winning! Except that the deal will practially force Republicans to raise taxes:
This trigger is intended to be an incentive for committee Members of both parties to agree on more cuts, but defense cuts of this magnitude would do far more harm to national security than they would to domestic accounts that have been fattened by stimulus. This is the worst part of the deal, and Mr. Obama’s political goal will be to press Republicans to choose between tax increases and destructive defense cuts. The GOP will have to fight back and make the choice between domestic cuts and harm to our troops fighting multiple wars.
This fight is far from over.
From what I’ve read this evening, “defense cuts” would include things like homeland security and foreign aid. Personally, I’d rather see the EPA, dept of education, etc.. get severely cut before they start stripping money away from actual constitutionally authorized functions of government.
The long sad history of triggers and commissions
“Anything Congress does, Congress can undo,” said Bob Bixby, executive director of the Concord Coalition, an Arlington, Virginia-based group that advocates for balanced budgets. “They can’t really bind themselves. You really have to have a political will to make these things work or they won’t.”
And in 1985, the Balanced Budget and Emergency Deficit Control, or the Gramm-Rudman-Hollings Act, included a trigger to enforce deficit targets. If the year’s target wasn’t met, spending cuts were triggered. In the five years of the act, the triggers kicked in twice, one of which was reduced by Congress and the other overridden by a subsequent budget agreement.
Congress has also rejected scheduled automatic reductions in doctors’ Medicare pay rates established in the Balanced Budget Act of 1997, prompting the annual passage of additional spending that is so routine it has a nickname: the “Doc Fix.”
“At least three commissions in the past year have failed to offer a plan that gained traction, including Obama’s National Commission on Fiscal Responsibility and Reform, a group of six senators often called the “Gang of Six,’’ and a bipartisan panel of lawmakers led by Vice President Joe Biden.
A reference to a “bipartisan deficit commission” has become so toxic in Washington that Senate Minority Leader Mitch McConnell, a Kentucky Republican, admonished reporters who used the term, insisting they call the proposed new panel a “committee.” That hasn’t diminished the skepticism.
“What can this committee offer that can be so dramatically different than what we’ve heard before?” Ader asked. “It’ll be tiresome and frustrating,” he said. “I don’t see how it’s possible it’ll have any teeth to it.”
Bloomberg
RIP
Durbin: Debt Deal Will Be The Death Of Keynesian Economics
Puffington Post
The chicken shits have done it again, protecting their re-election chances, nothing more, nothing less. The time has come to get rid of any one in congress and in the White House who votes for or signs this bill into law and replace them with “public servants” who do not want to make “public service” a career.
TEXT OF BUDGET CONTROL ACT AMENDMENT
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Severability.
TITLE I—TEN-YEAR DISCRETIONARY CAPS WITH SEQUESTER
Sec. 101. Enforcing discretionary spending limits.
Sec. 102. Definitions.
Sec. 103. Reports and orders.
Sec. 104. Expiration.
Sec. 105. Amendments to the Congressional Budget and Impoundment Control
Act of 1974.
Sec. 106. Senate budget enforcement.
TITLE II—VOTE ON THE BALANCED BUDGET AMENDMENT
Sec. 201. Vote on the balanced budget amendment.
Sec. 202. Consideration by the other House.
TITLE III—DEBT CEILING DISAPPROVAL PROCESS
Sec. 301. Debt ceiling disapproval process.
Sec. 302. Enforcement of budget goal.
TITLE IV—JOINT SELECT COMMITTEE ON DEFICIT REDUCTION
Sec. 401. Establishment of Joint Select Committee.
Sec. 402. Expedited consideration of joint committee recommendations.
Sec. 403. Funding.
Sec. 404. Rulemaking.
TITLE V—PELL GRANT AND STUDENT LOAN PROGRAM CHANGES
Sec. 501. Federal Pell grants.
Sec. 502. Termination of authority to make interest subsidized loans to graduate
and professional students.
Sec. 503. Termination of direct loan repayment incentives.
Sec. 504. Inapplicability of title IV negotiated rulemaking and master calendar
exception.
August 1, 2011 (1:15 a.m.)
house.gov
Only 74 pages which, I guess, is better than 2,000.
aguyfromNewJersey you have it exactly correct, get rid of the canard of 1974 Budget Act. For the Tea Party I see this as their next big issue. The ’74 Budget Act, aka Baseline Budgeting, is how all of the smoke and mirrors works. Every year, when the House budgets, it starts from last year’s budget and the assumption that the budget will increase at a certain percentage. So they start at a fictious number and therefore can declare that any increase that is less than the fictious number is a cut and any number that is larger than the fictious number is an increse/revenue/what is fair and balanced/etc. The rest of humanity, when they make a budget, start from zero, otherwise known as zero base budgeting.
Quick Aside: DC semantics need to stop, seriously, every time you hear some critter utter a nonsensical term they need to be called out and exposed for their torture of the language.
Stop Baseline Period.