Free Markets, Free People

A few points about the debt ceiling theater

First of all it’s an incredible amount of nothing except politics

"In reaching this agreement, each political party yielded to the other party’s highest-priority political and ideological interest," and fails to resolve the country’s long-term budget problems, Sen. Joe Lieberman (I-Conn.) said Monday.

Indeed, for all the high-stakes political drama and the apparent damage the months-long debate has inflicted on the political standing of both parties and the president, the compromise — what White House officials refer to as a "lowest common denominator" deal — achieves relatively little in the short term.

But, like most compromise, that’s the basis of such "deals". Unless very skillful or in negotiations with a pressure filled time limit one has to find the lowest common denominator and find it fast. And that’s precisely what this deal was – just enough to get enough votes on both sides of the aisle.

The question is, will it actually do anything about spending in reality.   The answer is most likely “no”.  Lieberman is exactly right.   It not only achieves relatively little in the short term, it mostly relies on “savings” from money never spent, only projected to be spent.   Obviously then a billion dollars not spent today could add up to many billions down the road if in fact it had been spent.  So when you see huge numbers like 500 billion, remember that over 10 years the real cut is probably 50 billion.  Or, for most numbers seen projected over 10 years, you can reduce it by a factor of 10.

Here’s the crux of the deal –

In the government’s 2012 fiscal year, the cut would be $21 billion, or less than 1% of a nearly $3.7-trillion federal budget, according to the Congressional Budget Office.

The bulk of the projected $2.1 trillion or more of cuts does not start kicking in until after the next election when a future Congress and president could choose to rewrite the plan — a point that many conservatives have worried about.

"Enforcement is the key to whatever we do. It’s always in the out years and it never happens," said Sen. Michael D. Crapo (R-Idaho), using the budget lingo for the latter years of a long-term deal.

I know, “wow”, huh?  $21 billion.   And in the meantime, permission to spend $2.1 trillion more.   So are you still wondering why voters have no faith in politicians of either party?

And this:

The bill almost certainly defers until after next year’s election the central choice most budget experts say the country eventually must make: higher taxes or deep cuts in Medicare, the nation’s huge and fast-growing health program for the elderly.

Of course it does.   John Boehner is claiming he got 98% of what he wanted.   Well if that’s the case, he didn’t want much.   And politically he gave away the most potent argument against this president until after the election.

Yet even with this pathetic bill we have the Civility party, that would be the Dems, out and about vilifying (remember this is the new civility – it’s much like the new math) the Tea Party with the VP calling them “terrorists”  (along with Joe Nocera in the New York Times) and probably the most absurd but honest statement coming out of the mouth of Rep. Mike Doyle (D-PA):

We have negotiated with terrorists,” an angry [Congressman Mike] Doyle [D-Pa.] said, according to sources in the room. “This small group of terrorists have made it impossible to spend any money.”

Uh, yeah, right.   You mean they’ve made it tougher to spend money like a drunken sailor on shore leave in Hong Kong  on money borrowed from his buddies (product idea – Democrat Barbie,  “being civil is hard”).

Finally, the “super-committee”:

A bipartisan congressional committee set up by the compromise bill is supposed to grapple with the long-term choices over the next four months. White House officials insist they see that panel as a serious opportunity to try again for a major deficit reduction deal. Their hope is that members of both parties will back an agreement rather than accept automatic across-the-board cuts in defense and domestic agency budgets.

But many in Congress, whose leaders will appoint the panel’s 12 members, believe the panel more likely will deadlock.

"I think it’s very possible, maybe even probable, that with a committee you’re going to have a 6-6 vote," said Sen. Saxby Chambliss (R-Ga.).

And, of course, should it deadlock, the meat axe will fall heaviest on defense.  And meat axe is the correct metaphor because the cuts mandated by failure to act are across the board cuts, not carefully considered cuts which will eliminate unneeded or unnecessary spending but leave critical spending alone.  Nope, we’ll see a grand hollowing of the force – again.

So, all in all, not such a grand deal after all.  But, with the smoke and mirrors show and the liberal caterwauling we’ve heard, you’d think they’d actually cut some real money we don’t have out of the current budget.

Oh, that’s right, we don’t have a current budget do we?

And why again is this crowd still in Washington DC?

~McQ

Twitter: @McQandO

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38 Responses to A few points about the debt ceiling theater

  • Why are we allowing the NYTimes and Politico to call us terrorists and not flooding their inboxes and phone lines with responses?  I have been and wish others would do the same.  These people are sick, hateful, and ignorant.

    • (Reuters) – Russian Prime Minister Vladimir Putin accused the United States Monday of living beyond its means “like a parasite” on the global economy and said dollar dominance was a threat to the financial markets. “They are living beyond their means and shifting a part of the weight of their problems to the world economy,” Putin told the pro-Kremlin youth group Nashi while touring its lakeside summer camp some five hours drive north of Moscow. “They are living like parasites off the global economy and their monopoly of the dollar,” Putin said at the open-air meeting with admiring young Russians in what looked like early campaigning before parliamentary and presidential polls.

      An obvious “Tea Party” fellow-traveller

    • The obvious irony is that if the responses were more along the lines of Tea Partiers threatening to behead  Times staffers and blow up their building, the NYT would never dare to offend them again.

      After all, it works for actual muslim terrorists.

  • Were I a Senator, my watch-word would be “filibuster”.
    Just on the issue of defense cuts alone, but on SOOOOOOOOOOOOOOOOooooooooooo many others.

  • Nobody should be surprised that we got an agreement that was “the lowest common denominator”. We’re talking about politicians, not statesmen. I don’t mean to sound cynical, but even a blind man could see where this was headed. The Democrats had some pretty strong cards: control of the White House and Senate, the claim that they represent the “middle ground” and the background this played out against is an economy not growing enough to satisfy anyone.
    I’m tired of all the folderol about ten year plans and CBO scoring and grand bargains. That may be how Washington is portrayed, but it’s not how it works. Congress has a two year lease on life, any plans beyond that horizon have a maximum effective range of zero. I would have much preferred the Republicans to limit themselves to that time frame. In other words, agree to extend the debt ceiling until late 2012 in exchange for substantial cuts in the 2012 budget. A budget due to go into effect on 1 October 2011. I accept that the long term issue is entitlements, but that’s not on the menu. Why not start from where we are and begin cutting and eliminating the low hanging fruit. It may not add up to much, but eliminating offensive programs like ethanol subsidies would be the best first step on a journey of a thousand miles.
    I think the Republicans could have successfully achieved a significant goal is they had been more focused. I would have proposed a simple swap. We give you your debt increase contingent on the passage of a balanced budget amendment. Until that happens, we are going to approve small debt increases each month. How could the Democrats argue against that? Passing a BBA is meaningless until you get 3/5ths of the states on board. I would have loved to see the President make the argument that giving the public an opportunity to rein in government spending is “dangerous” and “risky”.
    And a note to Harry Reid, prairie populist and supporter (with my money) of cowboy poets.
    Compromise is not when both sides are dissatisfied with the outcome. Compromise is when both sides walk away feeling they have achieved something. In Steven Covey terms, compromise is a win-win.

    • Steve C: I too wasn’t happy that Obama and the Dems got amnesty on debt ceiling talks until after the election. However, as you point out, they had high cards — the White House and the Senate — to which I would add the mainstream media.

      As I see it, Republican leaders are walking a tight rope between the Tea Partiers who, rightly, demand strong measures to put our financial house back in order, and the risk of appearing to overreach as in the 1995 budget showdown. The latter is the primary Democratic strategy for the 2012 elections and it’s not a bluff. It could work.

      I’d much rather see a watered-down debt ceiling bill than Obama re-elected for four more years. Republicans pressed the envelope hard enough to change the terms of the debate, did some horse trading, and survived to fight another day. That’s good enough for me for now.

      In the meantime Obama has taken some serious damage, which shows in the polls and the howls from the left. Time and reality are on our side. As long as continue to press forward judiciously, I believe we will win and turn the country around.

  • Yeah, defense busting – nothing could go wrong with tha…..
     
    uh….
     
    there’s a Mister Ahmadinejad here…  he says he wants to discuss the surrender of Israel….and Iraq?
    And Mr Hu JinTao wants to discuss the island of Formosa, something about a long unresolved property dispute.

  • Off topic, but…
    It appears that “Arab Spring” is turning to “Democracy Fall”.  Or the fall of democracy, as predicted.

    • But wait, bringing democracy to the savages was a prime reason to fight our current wars in AfPak and Iraq, right? So by your reasoning, we should double down until we get the job done.

      • You seem fixated on showing what an idiot you are.
        Play through…  I’ll just hold your coat.

        • Well, the ad hominem has a long and distinguished history as a substitute for reasoned thought, or analysis. Really, Rags, the criticism of people like you is praise.

  • We will, however, continue to pay for “Government Services” such as this.
     
    Yeah, there’s no waste of government money involved in that operation – officer time, court time, and possibly jail time.
    Lovely, I wish we had MORE government because this is right out of the mindless bureaucracy of the Soviet Union.
     
    “Comrade, I just saw you throwing out half your state ration of Vodka – this is a punishable waste and you must come with me”
    “But, what?  Why?  why are you here in my flat?”
    “Ah, We wanted to speak with you about your constant state of drunkiness, it is disgraceful and against the laws, you must also come with me for that.”

  • The military, while popular with the people, should no more be exempt from cuts than any other bloated federal bureaucracy. Why is it in this country’s interests to continue to underwrite projections of American power into places like Libya, AfPak and Iraq? (Let alone guarantee Israel’s security.) Oh, right, we have to spread democracy among goat-herding savages, and, apparently, we like the Israelis enough to spend blood and treasure in a place with no strategic value to us  . . . forgot about that.
     
    Megan McCardle made a shrewd point today here: http://bit.ly/o9vi6j Here’s the nut of it: “Fundamentally, we’re bumping up against the willingness of the American public to pay more taxes, or accept spending cuts.  Some constituencies are going to lose.  Republicans are going to have to decide whether they’d rather have lower taxes, or a stronger military.  And Democrats are going to have to decide who they care about more: old people, or poor people.”
     
    What she’s saying is an old variant of “pay your money, make your choices.” If you favor American security, how can you take either party seriously? Both have used our military to fight wars of choice in far-away places, while ignoring the millions of illegal immigrants that have flooded across our borders since the last amnesty, approved by Reagan, if memory serves. The deep unseriousness of our political class has come to us at a time when we can least afford it.

    • Another litany of stupid talking points.

      • This witty and devastating reply has caused me to re-evaluate everything. Oh wait, no, it’s caused me to conclude that you’re not serious. Reflexive militarism is not to be trusted, especially when it results in our current situation . . . unless you have come to the conclusion that our current escapades are necessary. If so, why?

        • Witty and devastating was never my intent.  I was being dismissive, which is all your crap deserved.
          More would be a waste of time.  See?

    • ..used our military to fight wars of choice in far-away places,

      Because, perhaps, it’s better to fight them in far-away places than down at the local mall.

      while ignoring the millions of illegal immigrants that have flooded across our borders

      That’s not the military’s job…AAMOF, it’s prohibited by the Posse Comitatus Act.

      since the last amnesty, approved by Reagan,

      Too bad only the “Amnesty” part was enforced.
      But imagine that dummy, Reagan, allowing all those Democrats into the country. :-)
       

       

      • “Because, perhaps, it’s better to fight them in far-away places than down at the local mall.”
        Again, there are millions of illegals here, now. The war against illegal immigration was conceded before it began. If you think our borders are any more secure against motivated terrorists than illegal immigrants, I’d love to see your evidence.
        “That’s not the military’s job…AAMOF, it’s prohibited by the Posse Comitatus Act.”
        I’m aware of the difference between federal and state jurisdictions. The PCA flows generally from the notion that FedGov does not have unlimited police powers and that the states do; hence, no-quartering and other aspects of the law. However, border security is a federal issue (and I’d argue an important one because of the possibility of terrorist infiltration from places like Mexico). A federal government interested in securing our borders against terrorists would find a legal way to work with the states to prevent such things from happening; instead we have Eric Holder’s Justice Department suing Arizona in order to keep our borders open and safe for anyone who wants to come.

    • The Amnesty signed by Reagan was the compromise with the Democrats to obtain federally enforable anti-illegal immigration laws and programs.  Reagan didn’t have a the forsight to see that those activities wouldn’t be enforced by subsequent administrations.  As for the amnesty, its the perfect example why another Amnesty or psuedo-amnesty won’t solve the problem either. 

      • Which is why I oppose amnesty and favor the mass deportation of millions of illegals. Unrealistic, but truly necessary if you want to get to the root of the problem (unfunded benefits paid out to noncitizens, resulting in bankruptcy) rather than treating its symptoms.

        • Don’t look now…
          Gradients are powerful things.  Mexico’s unemployment is roughly half ours.
          The issue may resolve itself as Obamic collapse continues.

          • You’re saying that because the third-world hellhole next door has half the unemployment of our first world country, that 15 million illegals are suddenly going to pull up stakes and go back? Ludicrous. The poor in this country live better than the middle class in most other countries, including Mexico. What possible motivation do these people have to return to Mexico?
             
            I can see why you believed that fighting wars in the Middle East was a good idea.

          • You’re saying that because the third-world hellhole next door has half the unemployment of our first world country, that 15 million illegals are suddenly going to pull up stakes and go back? Ludicrous.

            No.
            and
            Yes, you are ludicrous, and a waste of time.
            Thanks for the confirmation.

    • You don’t seem to understand the nature of the military cuts that will occur – across the board…not selected to eliminate waste or reduce – across the board – so the ‘good’ things the military does will be cut as much as the ‘bad’ things the military does.  You know, like render effective aid to places that have been overwhelmed by tsunamis.

      • The primary goal of the military is to protect the territorial integrity of the country, not render humanitarian aid (the tendency to task entities with jobs not part of their initial ambit is called “mission creep,” and its quite the trend in government these days). I agree that it’s generally good to render such aid if it is affordable. I also believe that if we need to borrow funds in order to provide such relief, we’re better off not rendering it.

        • Again, no argument.
           
          Though we have this allies thing, an unfortunate need for the real world now that we’ve moved beyond weapons with a range slightly larger than 5 foot ball fields, but we’ve been over this before and you weren’t buying then, so I won’t try and sell it now.

          • Well, Looker, “real world needs” have got us to where we are now: deeply in debt, fighting three wars (two started by Bush, one by Obama), massive expansion of the government’s size and an inability to make real cuts anywhere in our budget. Does this set of circumstances suggest to you that the path we’ve taken is correct, sustainable?  Sure, we need allies abroad. You can even argue that we need them in the Middle East, although I disagree with you there. But these wars and budgetary woes are symptoms of bad leadership, not the cause.
             
            There is no real opposition party that represents conservative interests in our government; instead we have this braindead collection of career pols with expensive haircuts. These right honorable gentlemen just got done raising the debt ceiling — again — with kicked-down-the-road cuts that may or may not materialize (I’ll believe it when I see it). Also, god forbid that these people cut military spending for fear of angering any of the related lobbies (be it J Street or defense contractors). On top of that, please note that the GOP has given up on legislative repeal of Obamacare. Real world needs, indeed.

          • real world needs – don’t necessarily include a larger government, or universal government subsidized health care.
             
             

  • Oh, that’s right, we don’t have a current budget do we?

    KInda hard when the R’s have one-half of one-third of the Legislature/Executive branches.

    And why again is this crowd still in Washington DC?

    Umm (raising hand)… because the CITIZENS elected them? Every last one of the gang of 535, plus The Anointed One. The citizens that thought the ‘Welfare State’ could be controlled or tamed.

  • And why again is this crowd still in Washington DC?

    Because 51-53% of the population pays no income taxes, and I’m assuming the actual registered voters who vote do so in proportion to this population:  ie, 53% of voters also pay no income taxes.

    Until we all have a stake in the game, nothing will change and frankly I can’t even fathom how this is possilbe.  When I was 16 working part time as a bank teller getting paid $2.00/hr I had to pay income taxes:  not just withholding, actually had to pay the government from which I received some of the withheld $s back.  But at no time did I ever get 100% of withheld taxes back at filing time.

  • Long story short on the debt ceiling theater: we’re cutting $2 trillion over a decade but the debt limit is going up by an additional $1.5 trillion. If this doesn’t strike you as powerfully stupid, you’re not paying attention. Again, unserious leadership at a time of crisis . . . not good.

    • A sentiment none of the posters here, and only one of the commentors here, would argue against.

  • One more thing: a friend writes:


    This source has considerable and, I think, trustworthy analysis of the Budget Control Act. It’s in three parts; the link goes to the broad summary. Basically, he thinks the Republicans are playing a long, incremental strategy game with the Democrats that they are slowly winning. Maybe so.

    At any rate, he knows that this deal is “small relative to our underlying fiscal problems” and I think he’s right that we “ain’t seen nothin’ yet” when it comes to congressional battles over spending. Frankly, I’d like to see the committee phase fail and the automatic 10% hit to defense and 8% hit to nondefense spending kick in [emphasis added].
     
    Sounds good to me. Put up or shut up time for the GOP: more taxes, or more cuts?

     

  • Source link didn’t format properly, here it is: http://keithhennessey.com/2011/08/01/bca-summary/

  • Well Reid has already said part 2 must contain tax increases or else the mandatory cuts will take place.  Republicans lose again.  And when cuts go into defense and medicare Reid, Obama and the MSM will blame republicans for not increasing taxes on the rich, blah blah blah and Boehner will once again capitulate on the tax issue.

    • Even the president seems to understand that the status quo of these programs is unsustainable. As he put it during a press conference on July 11, “If you look at the numbers, then Medicare in particular will run out of money, and we will not be able to sustain that program no matter how much taxes go up.”

  • So – John Boehner, dressed as Popeye, has decided to hand over the treasury to Obama, dressed as Wimpy.
     
    “I will gladly stop spending in 2014 for $2 trillion dollars today”.
     
    Life imitates art.

  • Consider …
    John Q Public has an annual income of $50,000 per year, but is currently spending at $83,200 per year. Living in with him is his father who trusted him with $56,100 to invest, but John Q Public has spent it all, so he must repay as his father needs it. Along comes accountant, Mr. T. Party, who tells representatives of John Q Public that this can’t go on.

    Mr. T. Party is obvious a “terrorist” for not letting John Q Public spend more ?

    Makes perfect sense to me.