‘It is clear we must enter an age of austerity,” House minority leader Nancy Pelosi mourned as she endorsed Harry Reid’s proposal for raising the debt ceiling. Austerity? Really?
The Reid plan would theoretically cut spending by $2.7 trillion over ten years. Even if that were true, it would still allow our national debt to increase by some $10 trillion over the next decade. But, of course, the $2.7 trillion figure is mostly fiction. About $1 trillion of the savings would come from the eventual end of the wars in Iraq and Afghanistan, savings that were going to occur anyway. Senator Reid might just as well have added another $1 trillion in savings by not invading Pakistan.
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Another $400 billion comes not from cuts but from assuming reduced interest payments. And, of course, there are $40 billion in unspecified “program-integrity savings,” meaning the “waste, fraud, and abuse” that is the last refuge of every phony budget cutter. The plan rejects any changes to Medicare and Social Security, despite the fact that the unfunded liabilities from those two programs could run as high as $110 trillion. But those liabilities generally fall outside the ten-year budget window, so Reid — unlike our children and grandchildren — doesn’t have to worry about them.
That leaves about $1.2 trillion in discretionary and defense spending reductions over the next ten years. Let’s put that in perspective. This year the federal government will spend $3.8 trillion. Our deficit is roughly $1.6 trillion. Our national debt exceeds $14.3 trillion, not counting unfunded entitlement liabilities. We are talking about raising the debt ceiling to $16.9 trillion. This month alone the federal government will borrow $134 billion. Reid’s cuts would average roughly $120 billion per year.
This is austerity?
Of course, the House Republican plan as announced by Speaker John Boehner is only marginally more austere.
Boehner proposes a two-stage increase in the debt ceiling, with each stage accompanied by spending cuts. The first $1 trillion debt increase would be accompanied by $1.2 trillion in spending cuts over ten years, pretty much the same as Senator Reid’s plan. The big difference is that instead of Sen. Reid’s phony Iraq and Afghanistan savings, the speaker’s plan would appoint a commission — now there’s an exciting new idea — to propose $1.8 trillion in savings from entitlement programs. To be fair, Senator Reid would also appoint a commission — because that’s what Washington does — to recommend additional deficit reductions, presumably including entitlement changes. The difference is that the Boehner commission has teeth. If Congress rejects its recommendations, the president doesn’t get a second $1.6 trillion hike in the debt ceiling.
But $1.8 trillion in entitlement savings over ten years is still too small to encompass real structural reforms of the type envisioned by Rep. Paul Ryan and others. It is much more likely to simply be more tweaking around the edges, perhaps raising the eligibility age or changing the way the cost-of-living formula is calculated. True, changes such as these will have a real impact out beyond the ten-year budget window, but they fall far short of what is necessary to deal with the shortfalls to come.
Making matters worse, both Reid and Boehner are using the time-honored Washington dodge of “baseline budgeting,” meaning that the proposed cuts are not actual reductions in spending from year to year, but cuts from projected future increases. Thus, under both the Reid and Boehner plans, actual federal spending will continue to rise.
With the clock running out, we are now down to fifth- or sixth-best options. But let’s not pretend that this is austerity.
Until this phony-baloney baseline budgeting process is halted and every program has to start from $0 each year and justify itself, we will get nowhere. It has been stated thousands of times on these pages and elsewhere that only in DC does a "cut" in spending cost me more year after year. While those in power depend on the masses being kept in the dark about their hijacking of the English language, there are a few of us out here who actually understand what they're talking about and we are fed up.
The public conversation in Washington is for insiders and the ignorant (voters). The former don't want to upset the apple cart too much while they are still there, the latter don't know or care what the apple cart is, so long as it keeps carrying them.
Conservatives/tea partiers are held out as the "dangerous" by both parties. Good luck America, you're screwed. Prepare for European style socialism as the republic is in its last days.
Sir:
To resolve the crisis, Republicans should compromise on an income tax increase. Given the labyrinthine construction of the tax code, right-thinking persons would be Laffering all the way to the bank.
Stuart, Obama and the middle class-despisers of the hard Left are DYING to eliminate the mortgage interest deduction, as it's one of the few deductions that assists the middle class significantly. This is both because they are ideologically committed to destroying the middle class and because they have a deep, visceral, unthinking hatred of the middle class.
Give them a shot at the tax code and this is the FIRST thing they'll go after. Lowering marginal rates will not compensate for the economic devastation that elimination of this most fair and forward-thinking of targeted deductions would cause.
We need lowered rates across the board AND we need to retain several key deductions--and the mortgage interest deductions is easily a key deduction.
" This is both because they are ideologically committed to destroying the middle class and because they have a deep, visceral, unthinking hatred of the middle class."
Too true, too true.
As Lenin said, the way to destroy the bourgeoisie (middle class) is to crush them beneath the millstones of taxation and inflation. We already have the inflation, thank you Federal Reserve and especially tax-cheat Timmy, and the tax code is the other.
The left hate some of the rich (not their own of course) but they have other plans for them. Hint: look up what Lenin said about capitalists and ropes.
The poor are their allies and can not resist their predations because they lack the means.
It is the broad and successful middle class that stands athwart their path and stops their socialist utopia in the USA.
I am not prepared to say that yet tcmcelroy. The true test is the next election. I sincerely hope the American people got the lesson of what happens with Democrats in charge. Only with the house, senate and presidency can true austerity happen.
Exactly. We aren't actually talking about cutting deficit spending - just deficit spending approximately 1%less.
Are we really to believe that the additional $14trillion (1.4t/yr deficit currently) we'll pile on over the next 10 years is materially different than piling on $12.8t including these 'cuts'?
Reality check - until we actually cut $1.4t from annual spending, we're reducing nothing, and the debt continues to balloon.
Exactly. We aren't actually talking about cutting deficit spending - just deficit spending approximately 1%less.
Are we really to believe that the additional $14trillion (1.4t/yr deficit currently) we'll pile on over the next 10 years is materially different than piling on $12.8t including these 'cuts'?
Reality check - until we actually cut $1.4t from annual spending, we're reducing nothing, and the debt continues to balloon.
Both plans are weak and the Reid plan is dishonest (as expected)
This whole house of cards will soon come crashing down around us. We will never pay back the money we owe nor will we be able to honor the promises we made. We are in default already
People will be severely angry when this happens and there will be chaos everywhere. I hope the politicians that refuse to even try to solve the problem are severely punished.....publicly.
Texan59 has it right. Here's another thing to add though: Federal departments must go. Not be shrunk, but eliminated. Energy, Commerce, EPA, Education, all of them and more, gone. Only the president can do this, and he or she must be talking about it in their campaign speeches or they are not ready for the office.
Eristic, put the "deep, visceral, unthinking hatred" narrative aside for a moment and ask yourself: If deep, visceral, unthinking hatred were not at the root of all liberal political philosophy, what would be?
I just can't believe the ineptitude of the GOP in these debates. They have no cohesion between House and Senate at all. The Dems did. Everyone in the GOP is out in front of the cameras. Dems have only their leaders for the most part. GOP is negotiating with themselves - an observation most have already made. Is Michele Bachman the ONLY one with sufficient guts to stand up to this? Is she the only one who truly understands what this is about?
It is apparent today, and has been so stated by heads of the sovereign rating departments at two of the rating agencies, that the "debt ceiling" debate is an aside, a secondary issue. The PRIMARY issue is debt/ GDP. Plain and simple. We MUST cut. IF they don't the debt rating will be dropped, borrowing costs will increase and any savings/ cuts will be immediately lost.
I am truly saddened that the GOP has truly turned out to be just the same, puerile party of old hacks who are afraid to lead, afraid to stand up, and evidently completely inept at negotiating and thinking outside the box. Why? Why is the GOP so daft all the time?
The liberal narrative's a simple one, and doesn't require fanciful conspiracies, comic book plots, or visions of utopia:
People are naturally selfish. All people -- liberals and conservatives alike. This is nothing shocking -- we all "get" this at one level or another. We're told on Sunday that this natural selfishness embedded in our human nature is bad and that we ought to do all sorts of things about it.
Consistent with this understanding of good and bad, some people think that coercing all of us from time to time to ameliorate the consequences of that inherent selfishness is a higher good than abstaining from the coercion itself.
The fact that so many of you need to impute fanciful conspiracies, comic book plots, or visions of utopia to some of your brothers and sisters should make you a little less confident in your core beliefs.
But see Mike, that's the problem with liberalism. It is liberalism which is, as you say coercion versus, um yeah, what would be the opposite of coercion, FREEDOM!
Never mind the total lack of coercion to what exactly? Your idea of what I should do to ameliorate my selfishness. And who gets to decide how selfish I am? And what kind of "ameliorating" I need. You want me to just trust the government to make those decisions. It will all be fine.
Just forget all that nonsense I just said about men being selfish and all. That doesn't apply to the men in government.
Sorry Mike, I am a free man and I don't need nor want government to be my keeper. Keep government doing the basic things government does and let me decide how best to live my life, without your idea of amelioration...
Any talk of budget cutting is completely specious and dishonest without addressing baseline spending increases.
I saw this analogy a while back: Let's say I spent $10,000 on this year's vacation and plan to spend $15,000 on next year's vacation (these numbers make the math easy to follow). Now I determine that money is tight and I need to cut spending. I therefore propose to cut next year's vacation budget by 20% - look, a 20% savings! The problem is that I cut the 20% from next year's PROJECTED budget - ie. from $15,000 to $12,000. I tell you that I've saved 20% when I've really increased spending by 20%, from $10,000 to $12,000. Reasoning of this type leads the US into default.
I'm beginning to think that in this tug-of-war over the debt limit and spending, the GOP team might be better off to just let go of the rope at the same time, letting the Dems "win" but all fall down on each other and look foolish and clumsy while doing it. They won't be able to blame whatever happens (more borrowing + more spending + more taxing in a lousy economy - you figure it out) on the Republicans, which should pretty much set the table for the 2012 elections. Then we can make some real progress.
Excellent point! I was thinking the same thing. To some extent that's what McConnell was trying to do. A simpler approach if neither Boehner's current plan or the CCB is passed by Senate if for House to offer a 12 month ceiling increase and that's it. Let Dems vote for it, enough Rep. to vote nay to let Dems win, and balance of Repubs to abstain. As to Senate, Repubs are in minority, so all could vote no.
Result, Obama gets almost everything he wanted except tax increases. BUT - he has to come back late spring/ early summer when the campaign is in full swing and hopefully a Repub nominee is there to but heads with. Then let Dems/ Obama enjoy the quagmire they've created. The debt downgrade will thence become soley their deal. AFTER the downgrade and during the Presidential election - THEN hit all the Dems, but especially those in Senate in precarious standing, with everything at once. They'll cave or lose in November. Then start over in Jan., either with or without Obama, but most certainly a fully Republican Congress in both houses, perhaps even a super majority in the Senate to override Obama vetos. That'll also enable Congress to undo ObamaCare and other measures he's implemented.
Step 1: Set forest fire.
Step 2: Add gas.
Step 3: Act concerned about fire.
Step 4: Spit on fire.
Step 5: Hold press conference to brag on firefighting courage and skills.
Step 6: Add more gas.
Step 7: Watch America burn.
The Tea Party conservatives have a plan. Get it? Not all republicans are the same. There is a real group in washington that wants to make things right.
