I never liked that old story of the Engine That Could. There are some things that the power of positive thinking simply won’t fix. Several weeks ago, I was sort of hopeful that some sort of deal would be made. The deal might be crappy, yes, but at least the economy wouldn’t implode. With each day, as reasonable and downright awful deals have all ended up in file 13, I’m getting less and less hopeful that our dysfunctional Congress can do anything that really helps the American people. So I went from I think they can to I think they are morons. I think that they are morons.
Rumors of a new, new deal have been circling since this morning.
The deal works like this:
It guarantees the debt limit will be hiked by $2.4 trillion. Immediately upon enactment of the plan, the Treasury will be granted $400 billion of new borrowing authority, after which President Obama will be allowed to extend the debt limit by $500 billion, subject to a vote of disapproval by Congress.
That initial $900 billion will be paired with $900 billion of discretionary spending cuts, first identified in a weeks-old bipartisan working group led by Vice President Joe Biden, which will be spread out over 10 years.
Obama will later be able to raise the debt limit by $1.5 trillion, again subject to a vote of disapproval by Congress.
That will be paired with the formation of a Congressional committee tasked with reducing deficits by a minimum of $1.2 trillion. That reduction can come from spending cuts, tax increases or a mixture thereof.
If the committee fails to reach $1.2 trillion, it will trigger an automatic across the board spending cut, half from domestic spending, half from defense spending, of $1.5 trillion. The domestic cuts come from Medicare providers, but Medicaid and Social Security would be exempted. The enforcement mechanism carves out programs that help the poor and veterans as well.
If the committee finds $1.5 trillion or more in savings, the enforcement mechanism would not be triggered. That’s because Republicans are insisting on a dollar-for-dollar match between deficit reduction and new borrowing authority, and $900 billion plus $1.5 trillion add up to $2.4 trillion.
However, if the committee finds somewhere between $1.2 and $1.5 trillion in savings, the balance will be made up by the corresponding percentage of the enforcement mechanism’s cuts, still in a one-to-one ratio.
I’m not sure how this is much different than what we have seen before. I just don’t understand how even thinking about cuts to the social safety net helps the American people. Do you?