Debt Crisis Update

So, last night the House of Representatives passed the Cut, Cap, and Balance bill and sent it over to the Senate where Democrats led by Harry Reid will promptly stick it in a drawer to never be seen again. Meanwhile, President Obama continues to lie about Republicans saying that they have no plan (liberal projection, as it is HE and Democrats who have no plan).

On Cut, Cap and Balance, Speaker, my Congressman and a Great American -- John Boehner -- had this to say:

“Americans are still asking, ‘where are the jobs?’ And while President Obama simply talks tough about cutting spending, House Republicans are taking action. ‘Cut, Cap, and Balance’ is exactly the kind of ‘balanced’ approach the White House has asked for – it provides President Obama with the debt limit increase he’s requested while making real spending cuts now and restraining future government spending and debt that are hurting job growth.

“House Republicans are the only ones to put forward and pass a real plan that will create a better environment for private-sector job growth by stopping Washington from spending money it doesn’t have and preventing tax hikes on families and small businesses. The White House hasn’t said what it will cut. And Senate Democrats haven’t passed a budget in more than two years. The President should abandon his veto threat, and urge Senate Democrats to quickly pass the ‘Cut, Cap, and Balance’ plan to help get our economy back to creating jobs.”

Republican Study Committee Chairman Jim Jordan added:

“Tonight, the People’s House voted for a plan to cut, cap, and balance the budget. This is an historic first step in fundamentally fixing America’s debt problem. Our solution makes real spending cuts now, caps spending in the future, and requires a Balanced Budget Amendment before allowing the President to borrow another dime. Families and businesses have to balance their budgets every single day. It’s only right that the federal government, with a $14.3 trillion debt, should finally have to do the same.”

“The debt clock is ticking, and it is time for Senate leaders to take action. Cut, Cap and Balance is the only plan on the table. Senator Reid must show some courage and bring this bill to the floor for an up-or-down vote.”

“All across the country, people are demanding that Washington cut spending and balance its budget. This is the way to do it.”

What the Cut, Cap, and Balance Act Does

Based on CBO’s March baseline, the Cut, Cap, and Balance Act saves $111 billion in 2012 and around $5.8 trillion over ten years.

Enforceable caps on spending will bring the size of government back below 20% of GDP to its post-WWII average.

· The bill grants President Obama’s request for an increase in the debt limit, but only after Congress has cut up the credit cards by passing a Balanced Budget Amendment.

Apparently this isn't what the president or the Democrats in the Senate want. So, maybe folks ought to be asking what exactly it is that they want because they sure haven't offered up a plan of their own in over 800 days.

Gang of Six

We are just now starting to hear about a "plan" that will raise taxes now and cut spending later. Has that EVER worked? What happens is that Republicans cave on the tax hike and then Democrats forget about the spending reductions.

This isn't a deal worth making...

UPDATE:  Americans for Limited Government President Bill Wilson today blasted a non-binding proposal in the Senate as insufficient to meet the nation's debt crisis:

"Senator Tom Coburn, a member of the 'Gang of Six,' has admitted that the bill, if all of its $3.7 trillion in savings over ten years were even realized, would only  represent 40 percent of the solution to restoring order to the nation's fiscal house.  Coburn said even if enacted, Congress is 'going to have to change it because this is just 40 percent of the way.'  Only 40 percent of a solution is no solution at all, it is accepting failure when there is no margin for error. 

"Moody's has already warned that the McConnell plan, which only vaguely promises $1.5 trillion in savings, would not prevent a downgrade, as it falls short of its recommended minimum consolidation of $4 trillion over ten years.  It is likely the 'Gang of Six' plan will not avoid a downgrade either, because it defers much of its work to congressional committees, putting off the date any cuts would even be voted on.  In order to reassure credit markets, Congress needs to make big cuts now and put the nation on the path to a balanced budget — before Washington turns into Athens.

"To his credit, Senator Coburn has offered a real program that cuts borrowing by $9 trillion over ten years, and is a brilliant piece of work.  But even he acknowledges that he only has but a handful of supporters.

"That means the Senate has but one credible option in front of it, it is the bipartisan 'Cut, Cap, and Balance' plan that will cut borrowing by $5.8 trillion over ten years and send a Balanced Budget Amendment to the states.  Any plan that contemplates less savings, defers the hard work to back-room 'commissions' and stacked committees, and fails to balance the budget should not even merit consideration.  S&P has given us 90 days to avert a downgrade, meaning we need to act now, not kick the can down the road again.

"Every single Republican senator is a cosponsor of the Balanced Budget Amendment. So, they should get behind the one bill, 'Cut, Cap, and Balance,' that would force a vote on it, sending it to states for ratification.  Congress needs to act before the debt becomes so large it cannot possibly be paid back.  This is a ticking time bomb that we are running out of time to disarm."