Monday, August 01, 2011

Debt Ceiling Omnibus of Stories Today...

I quite frankly don't know what to think about this whole debt ceiling thing. First, I don't like the deal, but I also don't like the way clowns like Erick Erikson have ginned up the Tea Party movement in such a way that they were expecting almost impossible results. So, here are some stories, and I may offer comment on each....

Bachmann: We Embrace Being Greece

Michelle is ticked about this, and is saying that the debt deal means we want to be Greece. Uh, no, Michelle. I disagree. I think we cannot think of this as so dire. Again, what this does is it buys us some short term time. Granted, it is not perfect, but I MUST REMIND YOU PEOPLE: we control 1/2 of 1/3 of the Government. As of right now, we have to embrace incrementalism.

Largest Debt Limit Increase....Again....From CNSnews:
In fact, according to records published by the Congressional Research Service, if the current bill is passed and the debt limit is increased by $2.4 trillion, the two largest debt-limit increases in U.S. history would come in back-to-back years, both during the presidency of Barack Obama.

Up until now, the largest increase in the debt limit was the $1.9 trillion increase passed by Congress and signed by President Obama on Feb. 12, 2010. That law increased the debt limit from $12.394 trillion to $14.294 trillion.

So, folks, this is the message. Obama and his 1/2 of 1/3 of the government, along with the current minority in the House have spent us to this point where we have to honor our commitments. However, this makes it all the more imperative to get a bigger majority in the House, take the Senate, and take the White House in 2012.

Debt Deal Costs 34 Billion a Page
The debt framework President Obama and congressional leaders reached Sunday night runs 74 pages long, and could authorize as much as $2.4 trillion in new debt — or $32.4 billion per page.

That debt increase will get the country through the 2012 election, both sides said, but it does not bring to an end the sea of red ink that will continue to wash over the federal government for the foreseeable future.

In the near term, the bill sets budget numbers for 2012 that would require a real cut of $7 billion in discretionary spending from 2011 levels, though that’s $25 billion less than projected spending would have been had it kept pace with inflation.

Over the long term, the deal could lead to as much as $2.4 trillion in lower-than-projected spending over the next decade, which also works out to about $32.4 billion per page in lower spending — if all of the conditions are met. But during those 10 years, that still means the country could pile up another $10.4 trillion in new debt, which would leave the government well more than $20 trillion in debt by the end of the decade.

The deal immediately imposes caps on discretionary spending for the next decade, including a total of $1.043 trillion in fiscal year 2012, which begins Oct. 1, rising to $1.047 trillion in 2013 and all the way to $1.234 trillion by 2021.

Yes, yes, I know, most of our spending is in entitlements. I get it. However, the American people are not educated enough on this issue. This is where the Tea Party and the GOP could come together. Instead of engaging in a circular firing squad, produce some media that informs people about real entitlement reform and how it doesn't have to send grandma eating dog food or kids naked in the streets. This could be a real point of alliance between the Tea party and GOP. However, right now, it cannot be touched as the libs have more power than we do. As long as they hold the Senate and the Presidency, we cannot effect those changes. And, I daresay, we cannot effect those changes until we educate the citizenry so that it is only the smallest minority of idiots that fall for the claims of Wasserman Shultz and others about entitlement reform.

Phantom Cuts?
The truth is that frightening rhetoric about default and full faith and credit of the United States is being carelessly thrown around to ram through a bigger budget than ever, in spite of stagnant revenues. If your family's income did not change year over year, would it be wise financial management to accelerate spending so you would feel richer? That is what our government is doing, with one side merely suggesting a different list of purchases than the other.

In reality, bringing our fiscal house into order is not that complicated or excruciatingly painful at all. If we simply kept spending at current levels, by their definition of "cuts" that would save nearly $400 billion in the next few years, versus the $25 billion the Budget Control Act claims to "cut". It would only take us 5 years to "cut" $1 trillion, in Washington math, just by holding the line on spending. That is hardly austere or catastrophic.In Washington terms, a simple freeze in spending would be a much bigger "cut" than any plan being discussed. If politicians simply cannot bear to implement actual cuts to actual spending, just freezing the budget would give the economy the best chance to catch its breath, recover and grow.

That was Ron Paul. If he wasn't such a whackjob on everything else, maybe someone would listen to him.

White House Trumpets Deal, Makes Obama Look Like Great Compromiser (yuck!)
Bipartisan Debt Deal: A Win for the Economy and Budget Discipline

Removes the cloud of uncertainty over our economy at this critical time, by ensuring that no one will be able to use the threat of the nation’s first default now, or in only a few months, for political gain;
Locks in a down payment on significant deficit reduction, with savings from both domestic and Pentagon spending, and is designed to protect crucial investments like aid for college students;
Establishes a bipartisan process to seek a balanced approach to larger deficit reduction through entitlement and tax reform;
Deploys an enforcement mechanism that gives all sides an incentive to reach bipartisan compromise on historic deficit reduction, while protecting Social Security, Medicare beneficiaries and low-income programs;
Stays true to the President’s commitment to shared sacrifice by preventing the middle class, seniors and those who are most vulnerable from shouldering the burden of deficit reduction. The President did not agree to any entitlement reforms outside of the context of a bipartisan committee process where tax reform will be on the table and the President will insist on shared sacrifice from the most well-off and those with the most indefensible tax breaks.

Mechanics of the Debt Deal

Immediately enacted 10-year discretionary spending caps generating nearly $1 trillion in deficit reduction; balanced between defense and non-defense spending.
President authorized to increase the debt limit by at least $2.1 trillion, eliminating the need for further increases until 2013.
Bipartisan committee process tasked with identifying an additional $1.5 trillion in deficit reduction, including from entitlement and tax reform. Committee is required to report legislation by November 23, 2011, which receives fast-track protections. Congress is required to vote on Committee recommendations by December 23, 2011.
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.

OK, see, this is the problem. We are not talking about cutting SS or medicare. Neither was Paul Ryan. The only person who has cut medicare recently has been....Barack Obama. You can look it up. See, this is where the TP and GOP need to embark on massive education of the populace. Until more people see we have to split this "third rail" of politics, we are never going to get spending under control.

Obama Campaign Site Says Debate is Over...

Here is the problem with this deal and the manner in which it was done and reported. It makes the White House look like they did something. The reality is that this deal was in the works without Mr. Obama getting involved, and only got done because he wasn't as closely involved. This is what I don't like--it increases the chance Obama will get reelected. Because, the GOP has essentially said, "we like mroe debt" or at least that is how media will spin it. Until the GOP can actually do things with a good message behind it (this has been its problem ages, going back to Reagan) as well as PR, then it won't get done.

Mike Lee Threatens Filibuster!
Will this be anything more than a fruitless exercise? I mean, won't the Dems and Repubs come together and make things look even more cozy? Doe Lee want that portrayal to be given to the GOP?

Obama Holds Tax Card--Taxes Could Go up 800B

WASHINGTON (Reuters) - The White House has one important tool in its arsenal to influence congressional talks over further deficit reduction measures in the coming months: the expiry of Bush-era tax cuts at the end of 2012.

After PresidentBarack Obama presented the outlines of a deficit-cutting deal on Sunday, White House officials stressed that he would veto any attempt to extend the tax cuts for the wealthiest Americans beyond next year unless other measures to reform the U.S. tax code were agreed.

That threat, which Obama has issued repeatedly since reluctantly agreeing to extend the cuts last year, is meant to mollify critics within his own Democratic party who are disappointed that measures to increase government revenues were not part of the deal reached on Sunday.

The agreement, which must still be approved by lawmakers, would cut about $2.4 trillion from the U.S. deficit over 10 years, with a congressional committee set up to find $1.5 trillion in cuts through tax reform and other deficit-reduction measures.

However, that flies in the face of what Boehner has told us that:

Boehner assures House GOP that debt deal is 'all spending cuts'
House Speaker John Boehner (R-Ohio) began selling his conference on the deal struck late Sunday during a call and slideshow presentation, assuring them "there's nothing in this framework that violates our principles."

In the presentation, which was provided by the Speaker's office, Boehner noted the framework has three main features: cutting government spending more than it increases the debt limit, implementing spending caps to restrain future spending and advancing the cause of a balanced-budget amendment.
"Now listen, this isn’t the greatest deal in the world," Boehner told his members, according to excepts provided by an aide. "But it shows how much we’ve changed the terms of the debate in this town.”

President Obama announced Sunday evening a deal had been reached. Minutes before the president made a statement to the press, Boehner called his conference to present the plan.

“There is nothing in this framework that violates our principles," he said. "It’s all spending cuts. The White House bid to raise taxes has been shut down. And as I vowed back in May – when everyone thought I was crazy for saying it – every dollar of debt limit increase will be matched by more than a dollar of spending cuts. And in doing this, we’ve stopping a job-killing national default that none of us wanted.”

I like John Boehner, I do. But he is wrong in this case. Taxes are still on the table. This commission can decide to raise taxes. Also, some of this stuff just doesn't add up. And to top all that off:

No real cuts until 2014:
The first phase of a deal to raise the government's borrowing limit would pose little threat to the economy in the short term because almost none of the spending cuts would occur before 2014.

Discretionary spending, which excludes Social Security, Medicare and Medicaid, would be cut by $21 billion in 2012 and $42 billion in 2013, according to an analysis by the Congressional Budget Office. That's a small fraction of the nation's $14 trillion economy.

"The immediate economic impact of the ... deal should be relatively minor," Brian Gardner, an analyst at Keefe, Bruyette and Woods, said in a research note. "As is usually the case, most of the cuts" have been put off for several years.

The first phase of cuts would reduce spending by $917 billion over 10 years. A congressional committee would decide on a second phase of cuts totaling $1.5 trillion.

Sounds like more can kicking to me. That is not good. However, if we are making some headway, it is not horrible. But, this deal may not help that much beyond philosophy:
Debt deal offers only small blessings for economy
"This will have minimal impact on the economy. The cuts are not there for the first couple of years, which really makes you wonder if they're really going to happen at all," said Peter Morici, an economics professor at the University of Maryland.

That is the problem with these deals and cutting over so long...they are not binding.

But, the media are all saying this is a BIG WIN (TM) FOR CONSERVATIVES! Makes some think:
I have the uneasy feeling that I’m hearing sales pressure. What a fabulous deal for you! Sign here!”

That's not to say lying and spinning become a thing of the past after the deal is closed. It just changes. Before, the effort is to get people to sign on. Those who most want the deal have a motivation to act like it's a big victory for whoever is most resistant — in this case, the Tea Party. Afterwards, everyone tries to find a way to gain — either by claiming they really extracted a lot out of the other side and/or by blaming anything that seems bad now on the terrible concessions their stupid/evil opponents insisted on.

This morning, reading these editorials, I suspect that the mainstream media think the Tea Party members of Congress are crazy — they're out there on the ledge. The idea is to talk them in.

Interesting point there. But maybe one good thing about this is:
Durbin Says Debt Deal Kills Keynesian Economics
The Republicans are killing Keynesian economics with their attempt to cut spending as the economy rebounds from a recession, Senate Majority Whip Dick Durbin (D-Ill.) said in a floor speech on Sunday.

"I would say ... that symbolically, that agreement is moving us to the point where we are having the final interment of John Maynard Keynes," he said, referring to the British economist. "He nominally died in 1946 but it appears we are going to put him to his final rest with this agreement."

That would be worth even this crap sandwich. Plus, all those tears from liberals I am seeing. However, this is not the end, folks....this is but a tactical manuever in a larger battle. We have to think this is just the beginning. If we get caught in the 'dora downer' attitude of thinking this was our chance and blew it, then we can kiss 2012 goodbye along with our country. We have to lick our wounds, figure out what went right and what went wrong, and go and educate the populace for an electoral awakening resulting in the defeat of statism and Barry Obama!

5:38pm Update

Check out this site for Boehner's power point presentation embedded in scribd. It may be educational as well. Also check out the post.