ABC—Congressional Sources: Republicans and Democrats Reach Tentative Debt Deal:
Democratic and Republican Congressional sources involved in the negotiations tell ABC News that a tentative agreement has been reached on the framework of a deal that would give the President a debt ceiling increase of up to $2.4 trillion and guarantee an equal amount of deficit reduction over the next 10 years.So, no new revenue (OMFG).
...Here, according to Democratic and Republican sources, are the key elements:
* A debt ceiling increase of up to $2.1 to $2.4 trillion (depending on the size of the spending cuts agreed to in the final deal).
* They have now agreed to spending cuts of roughly $1.2 trillion over 10 years.
* The formation of a special Congressional committee to recommend further deficit reduction of up to $1.6 trillion (whatever it takes to add up to the total of the debt ceiling increase). This deficit reduction could take the form of spending cuts, tax increases or both.
* The special committee must make recommendations by late November (before Congress' Thanksgiving recess).
* If Congress does not approve those cuts by December 23, automatic across-the-board cuts go into effect, including cuts to Defense and Medicare. This "trigger" is designed to force action on the deficit reduction committee's recommendations by making the alternative painful to both Democrats and Republicans.
* A vote, in both the House and Senate, on a balanced budget amendment.
And never mind, of course, that cuts to Medicare, which is underfunded, and cuts to Defense, which has the most wildly bloated budget of any government program in the nation, are not remotely equal. This is an absolutely fucking absurd "compromise." But we're supposed to feel okay about potential cuts to Medicare because they "are designed to be taken from Medicare providers, not beneficiaries." Oh, that's fine then, because not paying providers will definitely have no effect on beneficiaries when they can't find any providers willing to accept them as patients!
Again, I feel obliged to point out that this entire framework, tying budget cuts to raising the debt ceiling, is bullshit, because we raise the debt ceiling to accommodate spending we've already done. Future spending should be based on what we need, not on what we've already spent.
President Obama and Congressional Democrats never should have conceded that the debt ceiling talks be contingent on anything else. They never, ever, should have budged from the position of a clean raise. Twelve-dimensional chess my big fat ass.
And let me stress again: No new revenue. This is unfathomably stupid.
McClatchy—Economists: Now is wrong time for Congress to cut spending:
Some House Republicans backed by tea party groups demand even deeper front-end cuts, perhaps as much as $100 billion, arguing that politicians can't be trusted to keep their promises further out.Additionally, Suzy Khimm rightly points out that the deal will squeeze state governments, which will ultimately lead to decreased spending and layoffs in the public sector, deepening the economic crisis.
That'd be dangerous, warned Mark Zandi, chief economist for forecaster Moody's Analytics.
"I think the idea is a very serious policy error," he said. "This would be the fodder for another recession. The economy may be able to digest $25-30 billion more (in federal spending cuts) ... but $100 billion, I don't think it could digest that."
Zandi, who's frequently cited by Republicans and Democrats alike, favors spending cuts "when the economy is off and running," but he cautions that "to add more fiscal restraint in the latter part of 2011 and 2012 would be a mistake."
There isn't enough UGH in the world for this mess.
ThereIsNoSpoon [TW for violent imagery]:
It's hard to imagine how it gets much worse than this. If this deal goes through, it would represent nothing less than a capitulation on the part of the President and the Democratic Senate to economic terrorism on the part of the Republican caucus, and would set a major precedent for more accountability-free hostage taking in the future. Grover Norquist seems pretty happy about it, and why not? The gameplan for drowning the government in the bathtub is obvious from here. It's clear that the Democrats won't do a thing to get in the way, because there's no hostage the Democrats will be willing to shoot--or even threaten to shoot--when the GOP takes one, nor will the media abandon its postmodern "both sides are just as bad" shtick no matter how asinine the GOP becomes.I just don't know what to say anymore. We are simply not being governed by responsible and decent people who are keen to represent the interests of and be accountable to the US citizenry. Our democracy is lost.
None of which even touches the fact that the discretionary spending cuts and bipartisan commission to recommend entitlement cuts are right in line with what President Obama has repeatedly said he wanted, anyway. We're certainly not going to get any help to stand up to this atrocious "compromise" from the President: he actively wants most of what is in it.
UPDATE: Additional recommended reading...
Digby: The New Deal vs. The Bad Deal
Reuters: Britain, Japan warn of disaster if no U.S. debt deal.