“Super Congress”? Trillions in automatically-generated cuts if they don’t reach an agreement (trust me, they won’t)? How is any of this constitutional?
From W
hat’s wrong with the debt ceiling deal?
The debt ceiling will be increased by $900 billion immediately, in exchange for future Washington-style cuts. These cuts will only reduce a baseline increase in spending next year, and will not cut current spending. The debt will not be reduced, in fact, it will reach the new debt ceiling within two years! Here’s how.
Assume this year’s spending was $3.5T with a $1.5T deficit. The baseline increase for next year’s budget will be 8%, because of automatic increases in entitlement programs, so that spending will increase by $280B to $3.78T, with the deficit growing $120B to $1.57T in 2012.
With only $2.1T in cuts in the budget over 10 years, next year’s cut will only be $210B, but the deficit will still increase by $1,570B – $210B or an additional $1.36T. It will reach the new debt ceiling in less than two years!
This deal doesn’t change the way government does business. The deficit will increase to almost $17T right after the 2012 elections, using the baseline increase of 8% each year in the spending from the previous year. Where are the cuts?
This debt ceiling deal also does not prevent a downgrade in the country’s AAA debt rating which required a minimum of $4T, according to the rating agencies. Also, anytime during the 10 years, Congress and the President could eliminate the cuts and raise taxes.
The debt deal also gives tremendous power to a 12-member super committee that will recommend the second half of the debt reduction over the 10 year period.
This committee could increase taxes to reduce the deficit, not just make cuts. Not only that, if conservatives don’t agree to the tax hikes, then the so-called trigger would automatically cut our national security by $600 billion and cut Medicare, so more threats are looming on the horizon.
Obama could use this committee to raise the taxes he didn’t get in the debt deal and if the GOP opposes them, could claim the GOP would rather hurt our soldiers and seniors than raise taxes on “millionaires, billionaires or corporate jet owners.”
The American people weren’t looking for a debt deal or a compromise — they’re looking for a solution to the problem. The problem we have is a deficit of about $1.5 trillion and debt at over $14 trillion. And with this debt deal moving forward, we ensure that we are going to have over $17 trillion in debt in less than two years without solving the problem, which is cutting government spending.
