Mike Ross: This debt deal “forces touch decisions to reduce our national debt”

Above you will see the liberal spin on what has happened and it is that the Republicans won!!! However, no serious cuts were made.

“Thus, this deal achieves far too little by way of spending cuts, keeps open the possibility of new taxes, and hikes the debt ceiling substantially — all of which constitutes a clear and predictable kicking of the can past the November, 2012 elections… In related news, credit ratings agencies have signaled that that a small deal — which this is — is unlikely avoid a downgrade of U.S. Treasury securities. If a ratings downgrade actually occurs, the negative economic fallout will interrupt this deal’s framework of achieving spending cuts — by forcing future lawmakers to renege on the cuts. Today’s failure to deliver deeper spending cuts will then be correctly viewed as the missed opportunity that it is

Jagadeesh Gokhale is senior fellow at the Cato Institute, member of the Social Security Advisory Board, and author of Social Security: A Fresh Look at Reform Alternatives, by the University of Chicago Press.

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The words above are very important. The markets were looking for a deal that would turn us away from the path of Greece, but we did not get it.

Basically President Obama if he had got everything he wanted would have raised our debt under his 10 yr plan from 14 to 23 trillion. Under this plan we go to 20 trillion. How can I get excited about a 3 trillion cut over 10 years when the budget deficit this year alone will be 1.5 to 1.7 trillion?

Now let’s look at the response of Democrat Mike Ross (retiring representative from Arkansas):

1. “At last, cooler heads prevailed and we were able to pass a bipartisan agreement that secures America’s financial standing in the world..”

How can it secure “America’s financial standing in the world” if we are heading to Greece with 20 trillion in debt?

2. “forces tough decisions to reduce our national debt”

Nothing gets cut now and this year’s budget of 3.8 trillion gets 22 billion cuts in projected increases. 

3. “..and makes meaningful spending cuts that protect seniors’ Social Security and Medicare benefits.”

Where does it do anything like that?

4. “While this bill is a step in the right direction…”

We are still heading toward Greece!!

5. “…we still have a lot of work to do to get this nation’s fiscal house back in order.”

I haven’t seen any work yet on it.

6. “As a fiscal conservative, I will continue to be a moderating voice in this debate, bringing everyone to the table as we find commonsense ideas that help us return to the days of a balanced budget and a stronger economy.”

You are not a fiscal conservative and you let Obamacare out of committe. Way to go!! You could have killed it and now it will kill our businesses.

7. “This entire debate has demonstrated just how dangerous partisan bickering has become.”

The Tea Party was the only sane group that knows that we are heading to Greece.

8. “For months now, both sides have played political games with this issue, catering to their own respective extremes, and bringing our economy to the brink of a financial crisis.”

Who brought this country to financial crisis? It was not the Tea Party, but it was the liberals in Congress who are addicted to overspending.

9. “It’s become clear that we need more centrist members of Congress who are willing to reach across the aisle, compromise and work together.”

If Mike Ross is a centrist member of Congress then we are in big trouble. Heading to Greece will not be avoided!!

10. “This nation needs bipartisan, long-term solutions if we are ever going to truly solve our fiscal crisis.”

We don’t need bipartisan solutions if they are going to look like this debt deal that leads us to Greece!!!

11. “Job creators and the American people need the certainty of a strong, stable economy and it’s our job to work together and make that happen as soon as possible.”

As soon as possible?” This budget deal would not get us anywhere close to the balanced budget in the next decade. It is classic kicking the can down the road.

_______________________________________

This debt deal stinks. It is a failure of leadership and resolve.

The Debt Deal: Failures of Leadership and Resolve

by Jagadeesh Gokhale

Jagadeesh Gokhale is senior fellow at the Cato Institute, member of the Social Security Advisory Board, and author of Social Security: A Fresh Look at Reform Alternatives, by the University of Chicago Press.

Added to cato.org on August 1, 2011

This article appeared on Cato.org on August 1, 2011.

The President and leaders in Congress have basically thrown in the towel.

Democrats are unwilling to endure the political risks of agreeing to sorely needed spending cuts. House Republicans are holding out against revenue increases. The final deal announced Sunday includes just $1 trillion in cuts to discretionary spending, with an increase in the debt limit sufficient to carry through next year. Thus, this deal achieves far too little by way of spending cuts, keeps open the possibility of new taxes, and hikes the debt ceiling substantially — all of which constitutes a clear and predictable kicking of the can past the November, 2012 elections.

The deal, therefore, does not reduce the economic uncertainty that is keeping the country mired in recession. The major deficit drivers — Medicare, Medicaid and Social Security — are not addressed. That task is dispatched to a special committee of 12 senators and House members to be convened by congressional leaders. The joint committee is to report back by November 23, 2011 on further deficit reduction measures. But its members may be unable to agree on sensible deficit-cutting measures, or its recommendations may be voted down by Congress. If that happens, deficit reduction will be triggered through automatic and haphazard cuts to discretionary programs — but Social Security, Medicaid, defense, veterans programs, and civilian and military pay will remain walled off. That leaves a lot of red ink completely off the negotiating table, and spending on two out of the three major deficit drivers will continue to escalate.

Jagadeesh Gokhale is senior fellow at the Cato Institute, member of the Social Security Advisory Board, and author of Social Security: A Fresh Look at Reform Alternatives, by the University of Chicago Press.

 

More by Jagadeesh Gokhale

In related news, credit ratings agencies have signaled that that a small deal — which this is — is unlikely avoid a downgrade of U.S. Treasury securities. If a ratings downgrade actually occurs, the negative economic fallout will interrupt this deal’s framework of achieving spending cuts — by forcing future lawmakers to renege on the cuts. Today’s failure to deliver deeper spending cuts will then be correctly viewed as the missed opportunity that it is.

The media is calling this deal a victory for Republicans, especially for the Tea Party. How so? None of the targets of the House Republicans’ Cut, Cap, and Balance legislation is included in it. It does not remove tax increases from consideration by the new joint committee. Republicans also were not able to push through their preferred shorter-term increase in the debt limit to hamper President Obama’s re-election effort. Finally, although the deal schedules a vote on the Balanced Budget Amendment after October, 2011, nothing — not even a future debt-limit increase — is contingent upon it. Thus, a crucial element of guaranteeing fiscal discipline beyond 2021 has been bargained away.

The deficit cutting debate will now be pushed under the rug until the joint committee concludes its deliberations. That committee is charged with recommending deficit reduction to the tune of only $1.5 trillion over the next 10 years. As I’ve noted elsewhere, even cuts of $4 trillion over 10 years that were under consideration earlier would be insufficient to prevent the federal government’s fiscal condition from worsening by 2021.

The “Skirmish on the Precipice” that we just witnessed yields little by way of long-term fiscal discipline, contrary to the claims of the Obama administration and congressional leaders. We seem trapped in a particularly vexing Catch-22: the current Congress is bound to pay the bills incurred by past Congresses, but it is unable to bind future Congresses to rules that would guarantee continued fiscal discipline.

It’s been a frustrating two months watching politicians alternately squirm and spin only to achieve a damp squib of a deal. But that frustration will pale to insignificance when all of us are reeling in the vortex of a continuing economic decline, from which this deal appears unlikely to rescue us. The President is being excoriated for failing to lead. But if this deal is enacted, conservatives would also deserve some blame for a failure of resolve — to win more concessions on spending cuts and substantively redirect the nation’s wayward fiscal course.

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