Free Markets, Free People

The “deal”

The so-called “Budget Control Act of 2011” (assuming both the GOP and Dem caucuses in Congress agree) has the following provisions per Katie Pavlich at Townhall:

    * More than $900 billion in deficit reduction over 10 years through discretionary spending caps . $350 billion of that comes from the Pentagon;

    * Debt limit increased by at least $2.1 trillion — through 2013…see below for more on how that happens;

    * Bipartisan super-committee is tasked with finding $1.5 trillion in deficit reduction by November 23 presumably through tax and entitlement reform. There will be 12 members of the super-committee. House Speaker John Boehner, R-Ohio, House Minority Leader Nancy Pelosi, D-Calif., Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., each get to pick three members;

    * Congress must vote on recommendations made by the bipartisan Congressional deficit reduction committee by December 23;

    * If Congress fails to pass the committee proposal, triggers are enacted that spur at least $1.2 trillion in cuts and those will be close to 50/50 split between domestic/defense spending. But the triggers exempt cuts to Social Security, Medicare beneficiaries and low income programs. The cuts will take effect on January 2, 2013.

So over a third comes from the Pentagon with the remaining two thirds or just less than $600 billion from other discretionary spending.  You can ensure that Democratic politicians will try to frame that as granny being pushed over the cliff.

Also note what the “trigger” exempts.   As noted then, over 50% or $600 billion in cuts would come from the Pentagon budget and the rest from other discretionary spending.  No mandatory spending is touched.  That means they can’t use the “I don’t know if [name of favorite government redistribution program here] checks will go out this month” scare tactic.  But it also means no serious work will be done on the programs that are killing us – the entitlements.  It also means almost a trillion dollars in cuts in defense spending if Congress doesn’t act before December 23 of this year. 

Assuming both houses of Congress pass this and Obama signs it, how does it work?

* Immediately after passage of this bill, the president certifies the US government is within $100 billion of hitting the debt ceiling and is given authority to raise the debt ceiling by $400 billion.

    * That also triggers a request to increase the debt ceiling by $500 billion — with a process in which Congress can vote to disapprove. The expected outcome: the president vetoes the disapproval, Congress fails to override the veto, and the President is given the authority to raise the debt ceiling by $500 billion.

    * The second tranche comes in December. If the super-committee fails to produce a path to reduce the deficit by $1.5 trillion, or Congress fails to pass it, the president makes a request for the authority to raise the debt ceiling by $1.2 trillion. Congress votes to disapprove, the president vetoes it, Congress fails to over-ride the veto, he gets the authority to raise the debt ceiling by $1.2 trillion.

    * OR the super-committee succeeds in finding anywhere between $1.2 trillion and $1.5 trillion in deficit reduction and Congress passes it. The president automatically is given the authority to raise the debt ceiling by an equal amount, with no disapproval process.

In the previous cite you saw the make up of the “Super Committee”.  Can you really imagine them coming up with all those cuts?  My guess is many will be of the Harry Reid variety, where he counted future war spending that we weren’t going to spend.

Also look at the process of raising the debt ceiling.   Obama must veto any Congressional disapproval.  In a political sense that’s almost as good as having a short term debt ceiling increase to feature during the re-election campaign, because that’s going to come up more than once.

Boehner issued a slide show to put out the GOP’s side of the argument for what they got.  One thing not mentioned in Pavlich’s summary is the fact that the bill requires a vote in both the House and Senate on a Balanced Budget Amendment.  I’ll just be the first among many to declare that DOA.

Meanwhile the spinmeisters for the President have been busy this morning.   More on the politics of all this and reactions in a later post.

~McQ

Twitter: @McQandO

34 Responses to The “deal”

  • What a craptacular plan.  The committee either won’t come up with the cuts or, if they do come up with a plan, Obama will veto.  Then there will be a vote to not raise the debt limit which Obama will veto.  The debt ceiling gets raised and maybe a few billion gets cut.
    Same shit, different day.

  • I’m not going to get my hair (OK, both of them) on fire over a report of what may be in the deal.
    I’ll wait until it comes out…THEN maybe my hair will be on fire….

    • Heh!  If you want to see ‘hair on fire’ then go swing by Common Dreams.  Personally, I’m too scared to go see what the Koskids are saying.  I’m thinking the Fukishima cores might be a safer place.

      • “Almost simultaneously with the president’s announcement last night that a deal had been struck, Rep. Grijalva told his constituents he would not support it. Don’t look for the mainstream and other liberal media to call the congressman a “traitor” or “terrorist” or claim he is “holding the economy hostage” by threatening to vote no. That criticism is reserved only for the Tea and/or Republican Parties.”

        Naw, creeps like Grijalva would be “freedom fighters”…ur something…
        Wonder how many are thinking of running to France a la Fleebaggers…???
        The NYT is in deep, deep mourning…
        And Peggy Noonan…former Obama supporter…called him a “LOSER” last week.  He made it worse, you know…

        • Greenwald, Reich, Krugman, and Sanders are the other four that I read.  Not one of these left wingers are happy with this deal.
          I’m left wondering if anyone is happy with this plan?  I don’t like what I’ve read of it and gawd forbid it turn out to be one those, “You’ll have to pass it to find out what is in it.” deals.  Ya know, because that went so well with 0-care.

      • I just had a schadenfreude-tastic thought…
        I bet Poofessor Erp is in wrist-slitting mode…

        • Erb isn’t happy but since he believes that he and Obama are smack dab in the center and that both of them are pretty smart cookies, he concludes that Obama has done a creditable job fending off the loonies from the far left and far right, and therefore Obama is consequently well positioned for 2012.

    • The Republicans have one half of one-third of the branches; it’s all they’re going to get until 2013.
      Hey, does anyone still consider GRIDLOCK a positive?

  • I just see this whole thing as the continuation of the self-interested sixties. I hope my generation figures out how much they have gotten screwed by the currently group of loonies in government.

  • My first thought from Q’s summary:

    This bill stuffed the process into the bureacracy and the backrooms.  That way whenever something goes down, the public won’t even be close to getting a handle on the situation and it will be a done deal.

    This deal was deprive public momentum (including the Tea Party) from influencing the process. 

    • Good luck with that. This issue is not going away. The Dems are hoping the economy pops back and they can raise taxes on the rich to ride it out. 10 trillion in cuts are needed so that won’t work. And I don’t see the economy popping back anytime soon except if we get inflation in which case interest rates are going up….so back to square one.
      This was just round 1. Round 2 will have a GOP majority in the Senate and maybe a GOP president.

  • OK, there are smoulderings getting started on my head…
    Rush just played clips of an interview with Louie Gohmert (sp) Congress, TX, who I think is a pretty smart, grounded guy.
    He reeled off MANY problems with the bill he’s read.  Starting to look like another crap sandwich…

  • .. and of course all of this is subject to change at any time if 1/2 of the House, 3/5 of the Senate, and the POTUS agree at any time in the future to new “enhancements”
    This stuff is always a useless “pot of swill” as it merely reflects the view of the Congress and POTUS at this time.

  • Oh, well…
    The Mushroom Media is now reporting that we have either NEVER ended the recession (unexpectedly???) OR we are in the NEXT recession.
    http://www.msnbc.msn.com/id/43946055/ns/business-us_business/
    Surprise…

  • The fact that the far right and far left hate the deal is a sign that it was good.  The only way change and difficult decisions can be made in the US is through compromise.   If we’re going to get meaningful reduction in debt we need both sides to give some, growth to return, and long range policies that go beyond the 112th, 113th, 114th Congress and beyond.  Emotion-driven political extremism irrationally embraced because of “principles” on the left and right make people feel self-righteous and allow them to see the other side as “bad” and “idiotic.”   But if those folk drive the debate, the country goes in the crapper.   We need pragmatic compromise, nothing else can work.

    • No thanks

    • But if those folk drive the debate, the country goes in the crapper.

      Too FLUCKING late, Poofessor.
      Good grief, you are a parody without the least self-awareness.

    • Erb:
       
      The fact that the far right and far left hate the deal is a sign that it was good.
       
      This is the Golden Mean Fallacy. It has some utility as a rule of thumb, but it is no guarantee. It is a shortcut in place of real thinking, and it is a shortcut to which you are addicted.
       
      The only way change and difficult decisions can be made in the US is through compromise.
       
      Human life, especially political life, always involves compromises, so that’s practically a tautology.
       
      However, it’s also true that some things are either done or not done. Great changes were wrought in the US by the Civil War which was a refusal to indulge compromises like the Kansas-Nebraska Act and the Three-Fifths Compromise any further.

      • A–Look out!!!  We are hurtling toward the cliff…!!!  STOP…!!!
        B–Don’t be hysterical.  We can avoid the problem by accelerating.
        Proofessor Erp–Compromise (I in my wisdom proclaim) is the adult thing to do.  Slow down very slightly…
        Moron.

    • The fact that the far right and far left hate the deal is a sign that it was good. So just shut up about how two weeks ago I swore up and down that it was politically infeasible to get a deal without you far right political idiots giving in to tax increases, just don’t start. You sterile, inbred political idiots need to listen to me, because I’m a smart guy with an advanced degree, and not a mediocre, low-paid professor at a fourth-rate college, and I don’t either get everything I predict wrong. Stop saying that. And stop bringing up all my supposed failed predictions. I can explain how I was absolutely right with every one of them, including when I stamped my feet about how you guys would never get a deal without tax increases on the rich. Stop laughing.

      The only way change and difficult decisions can be made in the US is through compromise. With compromise defined as giving we wise pragmatic leftist moderates with advanced degrees what we need to march us towards utopia, except maybe a little slower than we would like. Hey, you think it’s easy putting up with you Neanderthal political idiots? It’s a sacrifice for us to even admit that you have a viewpoint worthy of consideration, considering that you’re like Goebbels and all. But I do it as a personal sacrifice, coming here and educating you dense righties, and I definitely don’t do it because I need someone to talk down to so I can bolster my own self worth and pretend to have all the answers and stop seeing giant magenta caterpillars with Sarah Palin’s full lips, ample bosom, and naughty librarian glasses.

      If we’re going to get meaningful reduction in debt we need both sides to give some, growth to return, and long range policies that go beyond the 112th, 113th, 114th Congress and beyond. Of course, I don’t have to actually define what those long range policies are. They will be determined by wise pragmatic leftist moderates. Who are very smart. Like me, who predicted the outcome of the last election so closely. Why, by November 1, I said the Democrats would be lucky to hold the House. And that’s not just one of half a dozen scattershot predictions I made so I could come back and claim to have predicted whatever happened. And I definitely don’t have to show a link to that prediction – besides, it was done, uh, when talking to my wife, yeah, that’s the ticket. So shut up about how just a few days earlier I said it was impossible for the Republicans to pick up more than two dozen seats, and that I actually gave a modest apology for being totally wrong about the election, just shut up about that. I’m a political science professor, and that ought to be good enough for you. Not that it ever is, given your inbred sterility.

      Emotion-driven political extremism irrationally embraced because of “principles” on the left and right make people feel self-righteous and allow them to see the other side as “bad” and “idiotic.” Yes, the way to see this whole thing is to not have any principles at all. Like me. See, it all makes complete sense. The only way not to be bad and idiotic is to have no principles. Like me, as I said.

      But if those nasty extremist folk drive the debate, the country goes in the crapper. So just don’t start about who’s been driving the country for decades, or how the Democratic Party is responsible for umpteen social programs that are all now out of control and driving us to meltdown. It’s not true. It’s all Reagan’s fault. I decree it. Besides, uh, look over there – Iraq. We spent lots of money there. So it’s Bush’s fault too. But definitely not those wise, pragmatic, moderate, leftist politicians who simply want everyone to be in control of their own lives by having everything they do determined by government and never being exposed to any risk.

      We need pragmatic compromise, nothing else can work. And, of course, only smart people like me and Paul Krugman and Brian Williams can determine exactly what constitutes pragmatic compromise. You inbred, sterile political idiots don’t get a vote on that. Suck on it.

    • “The only way change and difficult decisions can be made in the US is through compromise.”
      But not much was changed.  The cuts are off baseline, aka, a gimmick.  The debt ceiling gets raised to a point past the 2012 election.
      It looks like the status quo to me.  You know, the unsustainable status quo.
      If this is compromise and nothing else will work then the government is broken.

      • Scott would prefer if the cuts were made when there was once again complete Democratic control of the House and the Executive branches.
         
        That way, only the appropriate things would be cut (defense, and…uh, defense, and….defense….and any other conservative stuff the government supports).
        There would be compromise, there must be compromise you see, and (fill in other meaningless pretensions toward being reasonable and adult here).

    • A robber who only gets a couple dollars is probably as disappointed as the victim, too.

    • This doesn’t save the AAA credit rating.  It’s another kick the can down the road past the next election.  Already, politicians are posturing to argue that a credit downgrade isn’t so bad, and lining up the propaganda to blame the other side for the disaster.
      Unless you want to see the US economy taken down a peg, you’re a fool to be happy about this outcome.
      Once again, you argue that principles are irrational (unless, of course, they are your principles).  I don’t agree that any politician is all that principled—their job description pretty much makes that impossible.  But your antipathy towards logical consistency demonstrates that you see it as a threat to your goals.
      You want people who compromise their principles, who consider the rights of individuals to be paramount, but who then turn around and violate those rights for expediency.  It serves your purpose to have corrupt, unprincipled leaders.  They continue the political theater while the slow march towards more socialism continues, one compromise at a time.

  • ” But if those folk drive the debate, the country goes in the crapper.”
     
    So, maybe you’d like to tell us who’s been driving the debate for the last few years, considering we’re swirling around inside the bowl waiting for the vortex to pull us under.

  • Dont’ cut. eliminate! You don’t trim weeds, you pull them out by the roots! Dept of Education Dept of Energy, HUD, Fannie Mae, Freddie Mac, Ag department, etc… roots, not leaves! Roll back all EPA regs to 2004 and let them sit there for 20 years unchanged. I’ll think of some more things to do on the second that I am dictator.