Archive for Wednesday, August 3, 2011

Peace pact proves short-lived as debt limit bill signed

August 3, 2011


Plan highlights

President Barack Obama and top congressional leaders have reached an agreement on a plan to pair an increase in the nation’s $14.3 trillion borrowing limit with spending cuts and to create a special committee to recommend bigger savings for a vote later this year. Highlights:

Debt limit

The plan would immediately increase the debt limit by $400 billion, with Obama permitted to order another $500 billion increase this fall unless both House and Senate override him by veto-proof margins; a third installment of between $1.2 trillion and $1.5 trillion would be made available after enactment of matching levels of additional spending cuts recommended by a special joint committee of lawmakers. The full $1.5 trillion could also be available if Congress adopts and sends to the states for ratification a balanced budget amendment to the Constitution.

Spending caps

The measure would cut more than $900 billion over 10 years from the day-to-day operations of Cabinet agencies whose budgets are passed each year by Congress. Caps such “discretionary” spending at $1.043 trillion in 2012, $7 billion below 2011 levels and $44 billion below an inflation-adjusted “baseline.” But while sounding harsh, the measure represents a significant $24 billion increase over even deeper cuts sought by tea party-backed Republicans controlling the House.

After a near-freeze in 2013, discretionary spending would increase by about 2 percent a year, which is sure to spark infighting as defense hawks and backers of domestic programs wrangle over who gets the money.

It’s up to the Appropriations committees to allocate the money, picking winners and losers from programs and bureaucracies.

Additional cuts

The plan would also create a 12-person, House-Senate committee evenly divided between the political parties, and charged with producing up to $1.5 trillion more in deficit cuts over 10 years.

This second wave of spending cuts would focus on so-called mandatory programs whose spending levels are set by formula. They include Medicare, the Medicaid health program for the poor and disabled, farm subsidies and federal retirement programs.


The plan would also require both House and Senate to vote on a balanced budget amendment to the Constitution; establish “program integrity” initiatives aimed at stemming abuses in Social Security and federal health care programs; and preserve recent funding increases for Pell Grants for low-income college students by $17 billion over 2012-13, financed by curbs in student loan subsidies.

— With scant time to spare, President Barack Obama signed legislation Tuesday to avoid an unprecedented national default that he said would have devastated the U.S. economy. But the truce with Republicans that defused the crisis seemed to be fading already.

Wall Street crumpled, dismayed by reports of new economic weakness and unimpressed by Congress’ prescription. The Dow Jones industrial average sank by 266 points, its eighth straight losing session, and biggest.

The compromise deal to persuade GOP lawmakers to raise the federal debt limit — U.S. borrowing was to collide with it at midnight — will cut federal spending by $2.1 trillion or more over the next decade. But Obama immediately challenged Republicans to accept higher taxes on the wealthy in a second round of deficit cuts this fall. They adamantly refused to accept that idea during the past months’ dispute.

Work far from over

A stern-faced Obama said at the White House that action to raise the debt limit had been essential but more — and different — steps were badly needed.

“We’ve got to do everything in our power to grow this economy and put America back to work,” the president said, arguing forcefully for including revenue increases as well as spending cuts in the next round of efforts to trim huge government deficits.

It was the same call the GOP successfully resisted in the bill just approved, and there was little evidence of a change in position.

“The American people agreed with us on the nature of the problem. They know the government didn’t accumulate $14.3 trillion in debt because it didn’t tax enough,” said the party’s leader in the Senate, Mitch McConnell of Kentucky.

Obama placed his signature on bill in the privacy of the Oval Office less than two hours after a bipartisan 74-26 vote in the Senate. The House approved the measure Monday night on a 269-161 roll call that also reached across party lines and was sealed by a rap of the gavel by Speaker John Boehner.

Essential legislation

The bill allows a quick $900 billion increase in borrowing authority as well as a first installment on spending cuts amounting to $917 billion over a decade.

Without legislation in place by day’s end, the Treasury would have been unable to pay all the nation’s bills, leading to a potential default for the first time in history. Administration officials warned of disastrous consequences for an economy that shows fresh signs of weakness on a near-daily basis as it struggles to recover from the worst recession in decades.

The White House and congressional leaders said legislation was important to reassure investors at home as well as overseas, and also to preserving the nation’s AAA credit rating. Following passage of the debt deal, Moody’s Investors Service, one of the three main ratings agencies, said it was retaining its triple-A rating on U.S. bonds but with a negative outlook to show there is still a risk of a downgrade.

Short-lived peace pact

This week’s peace pact between the two parties is unlikely to be long-lived.

The bill sets up a powerful 12-member committee of lawmakers with authority to recommend fresh deficit savings from every corner of the federal budget.

Politically sensitive benefit programs such as Social Security and Medicare will be on the table as the panel of six Republicans and six Democrats works against a Thanksgiving deadline. So, too, an overhaul of the tax code. Congress will have until Christmas to vote on the recommendations without the ability to make changes.

As an incentive for Congress to act, failure to do so would trigger $1.2 trillion in automatic spending cuts, affecting the Pentagon as well as domestic programs.

Even before the president signed the legislation, he and Republicans were maneuvering for political position on the next stage.

“We can’t balance the budget on the backs of people who have borne the biggest brunt of this recession,” the president said, renewing his call for higher taxes on the wealthy. “Everyone is going to have to chip in. It’s only fair.”

Senate Republicans say it will not happen.

“I’m comfortable we aren’t going to raise taxes coming out of this joint committee,” McConnell said in an interview with Fox on Monday.

In a speech shortly before the vote, he predicted instead a renewal of the most recent struggle over spending cuts.

The debt limit will have to be raised shortly after the 2012 election, he said, predicting that no president of either party will be “allowed to raise the debt ceiling without ... having to engage in the kind of debate we’ve just been through.”


Richard Heckler 4 years, 2 months ago

Neither Tea Party neoconservative republicans nor democrats stepped up to the plate

What was missing from the deal?

Millions of new jobs that would create new economic growth and the “Peoples Budget” that which does everything this country needs:

* Creates good-paying jobs
* Fully maintains our social safety net
* Invests in education
* Ends our costly wars
* Closes the tax loopholes that have made offshoring jobs profitable
* Ends oil and gas subsidies that pollute our country at taxpayer expense
* Creates a national infrastructure investment bank to help us make intelligent investments for the future

The “People's Budget” represents not just common sense; it represents the will of the American people.

What the “Peoples Budget” does very specifically:,70

gl0ck0wn3r 4 years, 2 months ago

Swedish death metal is waaaaaaay better than the people's budget!!!!111

Swedish death metal is a death metal music scene developed in Sweden. Many Swedish death metal bands are associated with the melodic death metal movement, thus giving Swedish death metal a different sound from other variations of death metal. Unlike American death metal groups, the first Swedish bands were rooted in punk rock. While Norway is more notorious for its quantity of black metal, Gothenburg in Sweden has a large melodic death metal scene, while Stockholm is notorious for its rawer death metal scene.

Unlike American groups, the Swedish death metal scene's earliest originators were influenced by punk rock, especially the D-beat hardcore punk scene.] Bathory, who would subsequently become a primary influence for the black metal scene, were a pivotal group in Swedish extreme metal.

In the early 1990s two death metal scenes emerged in Gothenburg and Stockholm. The first wave of "Swedish death metal" consisted of the bands Carnage and Nihilist, who fragmented later into Entombed, Dismember and Unleashed. Many of these bands used the trademark Tomas Skogsberg/Sunlight Studios "buzzsaw" guitar tone. It was created by using heavily detuned electric guitars (usually C# standard or lower), a maxed out Boss HM-2 Heavy Metal pedal, sometimes in combination with a single guitar through a Boss DS-1 Distortion pedal. The originator of this guitar sound was Nihilist guitarrist Leffe Cuzner though it was evolved and altered over the years. Newer bands playing in the 'old school' Swedish style are Bloodbath, Repugnant, and Paganizer; among others

Flap Doodle 4 years, 2 months ago

FORGET the people's budget!!!! Read the people's CUBE! It = waaaay more reality based than anything demonow is pushing !!!

usnsnp 4 years, 2 months ago

This 12 member committee is a farce. The Republicans will not put anybody on it that would raise any taxes, the Democrats will not put anybody on it that will cut any of the so called entitlements. So that means no agreement, might enforce the triggers. An example of how Congress cannot get things done, funding for FAA could not get done because there is a argument over 13 million, while FAA is not being funded 4,000 FAA employese are on unpayed furlow, this includes FAA inspectors, up to 70,000 construction workers and engineers are being layed off, the Federal government is loosing up to 25 million a day in taxes on airplane tickets ( most of airlines are pocketing this money). While this goes on Congress has gone on a 5 week recess with full pay of course. A Congress man said on TV the other day that this problem might incovenice some people.

Getaroom 4 years, 2 months ago

And whenever Merrill comments and posts there is surely to follow a "snap_pop_no_crackle. "spnc" how about you read "The P Cube" and get a real life while you are at it. You present as yet another hater of the elected president of the USA and one who thinks that the Republican way is the only way. You must certainly be super wealthy like "Plynth", a fellow hater/poster elsewhere in the LJW blog, who also speaks with such compassion, wisdom and eloquent thought on matters political and social. NOT!

Getaroom 4 years, 2 months ago

gl0ck0wn3r: I thought Obama was going to take your Glock away with all the ammo? Whatever happened to all that angst? Oh, I see, it all went into that amazing music! Who would have ever known had you not shared. Now it all makes perfect sense and I bet "spnc" loves your post! You know he reads the CUBE and is well informed.

gl0ck0wn3r 4 years, 2 months ago

I never had any concerns that Obama was going to take my firearms. You are painting with a very broad brush, but congratulations on making yourself look a bit stupid.

Cait McKnelly 4 years, 2 months ago

Tea Party Republicans have the "My way or the highway" thing hands down. Why does it remind me of a spoiled two year old throwing a tantrum?

Richard Heckler 4 years, 2 months ago

How in the world could either party members turn down an opportunity to cut $4 trillion from the debt? By way of the "Peoples Budget"

It goes like this. The savings would come by way of white collar entitlements aka pork barrel spending aka earmarks aka reckless spending and tax hikes. It was fear of losing special interest campaign money, guts to terminate Bush tax cuts and backbone to cut off those pork barrel corporate subsidies.

The remedy:

One answer to problems such as this: CUT OFF special interest financing of elections! YES even at the local level.

Our government is always claiming the USA is about democracy. In that case allow the citizens to practice democracy by allowing citizens to vote in these measures come 2012:

Let's demand a new system and vote in Fair Vote America : Demand a change on the next ballot.

Let's have public financing of campaigns. Citizens cannot afford special interest money campaigns for it is the citizens that get left out. Let citizens vote on this issue.

Bribery of elected officials is the most stinky of all bribery!

gl0ck0wn3r 4 years, 2 months ago

How about WE vote IN only BEARS to run the GOVERNMENT??

Bear is a LGBT slang term that refers to members of a subculture in the homosexual and bisexual male communities and to an emerging subset of LGBT communities with events, codes, and a culture-specific identity. It can also be used more generically to describe a physical body shape.

The term "Bear" is credited to Richard Bulger who, along with his then partner Chris Nelson (1960–2006) founded Bear Magazine in 1987.

Bears tend to have hairy bodies and facial hair; some are heavy-set or muscular; some project an image of rugged masculinity in their grooming and appearance, though none of these are requirements or unique indicators. Some bears place importance on presenting a hypermasculine image and may shun interaction with, and even disdain, men who exhibit effeminacy. The bear concept can function as an identity, an affiliation, and an ideal to live up to, and there is ongoing debate in bear communities about what constitutes a bear, however a consensus exists that inclusion is an important part of the bear community.

Bears are almost always gay or bisexual men. Increasingly, transgender or transsexual men (trans men) and those who shun labels for gender and sexuality are also included within bear communities.

At the onset of the Bear movement, some Bears separated from the gay community at large, forming "bear clubs" to create social and sexual opportunities for their own. Many clubs are loosely organized social groups; others are modeled on leather biker-patch clubs, with a strict set of bylaws, membership requirements, and charities. Bear clubs often sponsor large yearly events—"Bear runs" or "Bear gatherings" like the annual events such as International Bear Rendezvous, CBL's Bear Hunt,] Bear Pride, TBRU, Orlando Bear Bash, drawing regional, national and international visitors. Many LGBT events attract a significant bear following, such as Southern Decadence in New Orleans. A feature at many Bear events is a "Bear contest," a sort of masculine beauty pageant awarding titles and sashes (often made of leather) to winners.

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