Dems to lift debt ceiling by $1.8 trillion, fear 2010 backlash

[The Northerner]

Source: Politico

In a bold but risky year-end strategy, Democrats are preparing to raise the federal debt ceiling by as much as $1.8 trillion before New Year’s rather than have to face the issue again prior to the 2010 elections.

“We’ve incurred this debt. We have to pay our bills,” House Majority Leader Steny Hoyer told POLITICO Wednesday. And the Maryland Democrat confirmed that the anticipated increase could be as high as $1.8 trillion — nearly twice what had been assumed in last spring’s budget resolution for the 2010 fiscal year.

The leadership is betting that it’s better for the party to take its lumps now rather than risk further votes over the coming year. But the enormity of the number could create its own dynamic, much as another debt ceiling fight in 1985 gave rise to the Gramm-Rudman deficit reduction act mandating across-the-board spending cuts nearly 25 years ago.

Already in the Senate, there is growing pressure in both parties for the creation of a novel bipartisan task force empowered to force expedited votes in the next Congress on deficit reduction steps now shunned by lawmakers.

Read more: http://www.politico.com/news/stories/1209/30417.html

[FLAprogressive]

1. here's an idea, Steny. How about we stop pissing away money on two wars that are going nowhere fast.

[PSPS]

2. That, plus return to a progressive income tax preferably at pre-Reagan levels.

[FLAprogressive]

6. Yep.

[mystieus]

3. "The debt ceiling was raised EVERY SINGLE year Bush was in office."

[kirby]

4. Yeah but...

People still think of the Dems as the 'Tax and Spend' party, unlike the fiscally responsible bunch under Bush. Go figure.

[FLAprogressive]

5. so let's raise it again -- change we can believe in

[mystieus]

7. But we plan to pay for our raise.. that's the difference, sherlock.

[FLAprogressive]

8. how can we pay down the deficit by keeping the wars going?

[girl gone mad]

13. How?

Tax revenues are falling.

[kirby]

16. Uh sherlock...

Why would someone raise the ceiling on the amount of money they need to borrow if they are 'paying for it'.

This is all money borrowed from China/Japan and the Middle East.

I really dont understand your 'we plan to pay for our raise'. They fact that we need authority to borrow an additional $1.8 Trillion means we are not, despite the 'pay as you go' rhetoric.

[totodeinhere]

38. No we can't. We're broke and there is no relief in sight.

With Obama's war policy, we can't expect any relief in that area. So it will be business as usual.

[notesdev]

9. Not by anywhere near $1.8 trillion

That's an obscene figure. Where's the money come from?

[FLAprogressive]

10. thin air or China will continue to buy more of this country

[audas]

12. It is a deliberate

policy as part of on going dollar devaluation and price inflation. If this goes through the US will see inflation beyond all imagination.

Your entire manufacturing sector is in China, while your entire services sector is in India.

This will lead to war with Iran. It is the only possible solution.

[leftynyc]

28. I'm pretty sure the Bush administration

never put the costs of the wars into the budget. They thought they could pick the money tree in the Rose Garden to pay for them. At least the Democrats are being more honest about the debt. The pukes just spend and lie about it.

[totodeinhere]

40. You are correct. They left it off budget. n/t

[sendero]

15. Yes but..

.... Obama has matched several years of increases by Bush in his first year.

It's not all his fault, he did inherit a faltering economy, but IMHO he's done just about everything possible to make it worse.

The Dems tenure in power will be brief indeed. The economy will still be struggling in 2010 and in 2012. Obama/Dems unwillingness to get real health care reform, the only crown jewel in their policy basket, is the last coffin nail.

It is beyond sad to wait 8 years for this and see it all blown like TO dropping a perfect pass.

[snot]

11. 2010 backlash, BRING IT ON. Unless you start rep'g THE PEOPLE.

[beyond cynical]

14. Typical...

<<<And the Maryland Democrat confirmed that the anticipated increase could be as high as $1.8 trillion — nearly twice what had been assumed in last spring’s budget resolution for the 2010 fiscal year.>>>

Why is it that government estimates on spending are always soooo far from reality? I would given them the benefit of the doubt if they were, say, +/- 100 billion (the minus NEVER happens), but this can only be described as total and complete incompetence.

We would all be a whole lot better off if congress just took the rest of the year off.

[Igel]

19. Mostly because it suits them.

No, that's probably more cynical than I should be.

Okay. You can underestimate expenses and overestimate revenues.

Part of underestimating expenses is (1) not realizing how much you're going to add to the budget; part is (2) overestimating savings or not being realistic in your projected expenses.

Part of overestimating revenues is simply (3) not realizing how tax-based revenue is going to change; part is (4) stipulating that the basis for an estimate has to be unrealistic.

(1) is usually true. Few want to cut services or cut a program. Adding is easy, esp. when you're covered by an initial budget resolution that assumes a deficit of X billion. Why? Because anything *less* than your estimate is a "savings". Esp. when every expense is "stimulus".

(2) Savings almost never pan out. There's strong motivation to say that there'll be savings when they're unlikely--who'll notice? The higher the level of administrator the fewer levels above him/her to notice. Then there's the low-balling of expenses. Pass a program that'll cost $200 billion/year? Never happen--but if you say that it's actually only $100 billion, well, that might be doable.

(3) Sometimes simple mistakes happen. You can't predict how bad a recession or good a boom will be. That's why I said I was being too cynical. Everything else is cynical and stands.

(4) But there are guidelines on how to make projections. The CBO does not act in a vacuum, nor does the GAO. Both are given marching orders. The CBO, esp. has blinders on when it comes to making predictions, although they're Congress-imposed blinders. In other words, when the CBO says something about the executive branch it's less likely to be wrong than when the GAO does; and when the GAO says something about the legislative branch, it's probably more accurate, cet. par., than the CBO.

In the case of the debt ceiling increase, there's a completely different kind of factor. If you raise the deficit a month or two before elections, people might remember it come November. If you raise it in December, 11 months before the elections, well, people are less likely to remember it. Moreover, since discussion is usually centered on the deficit, not on the debt itself, it's easier to blame * for the need to raise the ceiling 11 months after he left office than it is 20 months after he left office.

[dysfunctional press]

17. what needs to be lifted is the top marginal tax-rates...

how much more obvious could it be that taxes on the obscenely wealthy are TOO FUCKING LOW.

we don't have enough money to pay our FUCKING BILLS.

when will the people in this country WAKE THE FUCK UP ALREADY?!?!?

[Psephos]

20. How about spending less? That's what actual humans do when they're in budget trouble. n/t

[dysfunctional press]

21. take a look at the yearly budget deficit- and tell me REALISTICALLY where you would make the cuts.

i'll sit down and wait for my answer.

[dysfunctional press]

23. exactly what i expected- absolutely NO response..

:rofl: :rofl: :rofl: :rofl:

[Romulox]

27. Your argument is that there is no fat to be trimmed from the Federal budget?

Er...

I'd make cuts to:

• war budget
  
• largest military budget in history of humanity (even in the absence of any war)
  
• massive Federal prison system
  
• War on Drugs
  
• farm subsidies
  

Your post is truly gimmeabreak worthy. :hi:

[dysfunctional press]

31. that's not even remotely what i said.

take a look at the annual budget defecit- now- REALISTICALLY- where are you going to make enough cuts to balance the budget..?

[Romulox]

35. You challenged him to provide some areas to be cut, then did a *that's right!*

when you didn't receive an immediate response.

"take a look at the annual budget defecit- now- REALISTICALLY- where are you going to make enough cuts to balance the budget..?"

So the word "REALISTICALLY" is your ace-in-the-hole? :eyes: You are arguing that it is not REALISTIC for a country that is bankrupt to do any other than to spend as if nothing's the matter?

It's another gimmeabreak argument, even with the weasel word. Obama could've REALISTICALLY not chosen to spend billions of additional dollars surging into Afghanistan. He could REALISTICALLY shut down numerous army bases in wealthy developed countries such as Germany and Japan. He could REALISTICALLY end the War on Drugs today, saving billions in costs to arrest, try and imprison nonviolent offenders and to introduce them to the largest penal system in the history of humanity.,

The President himself could REALISTICALLY do a lot of things unilaterally to either directly or indirectly trim billions off the Federal budget. The Congress has it in their power to trim hundreds of billions more.

If your answer to all of this hinges on "REALISTICALLY", then you are really arguing that there's not really any crisis at all, such that the status quo becomes a defense to common sense solutions. While it is a cliche, I can't help but point out that this is NOT change that we can believe in! :hi:

[dysfunctional press]

36. how is 10 hours an 'immediate response'?

don't worry tho- maybe someone will give you a watch for christmas. :hi:

[totodeinhere]

41. I favor raising taxes on the rich. But that in and of itself will not be enough.

The deficit is just too damn large and growing every day. There aren't enough rich people around to pay it off. The one thing we can do which would help is to stop the wars. But that won't happen.

[dysfunctional press]

43. there is $50trillion in wealth in the u.s.

as a society, there is definitely enough wealth out there to pay off the national debt.

[totodeinhere]

47. Most of that is not liquid and it would be hard to convert all of it to a usable cash stream. n/t

[timo]

18. slash slash slash

Slash the crap out of foreign aid, over the years we have given away enough money to build the border fence 100 feet tall, the world hates the shit out of us for it, tell the u.n. to fund their own fuckups cut of the $ to foreign aid and withdraw the troops from these two shit hole wars, undo nafta and put America back to work, in 5 years we would be back in the black!!!! no taxes raised!!!

[dysfunctional press]

22. cut foriegn aid..? THAT'S where you'd make the budget cuts...?

:rofl: :rofl: :rofl:

as a percentage of gnp, the u.s. is already on of the most skinflint industrialized nations on earth.

[mbperrin]

25. Actually, we only spend about $20 billion a year in foreign aid.

so 90 years of zero expense would cover this one ceiling raise.

BTW, Israel and Egypt get 1/3 of all our aid.

http://www.vaughns-1-pagers.com/politics/us-foreign-aid.htm

[dysfunctional press]

24. there is $50 trillion worth of wealth in the u.s.- it's time we paid our bills.

tax the rich - they've benefited the most BY FAR from our country/society- they SHOULD be footing most of the bill.

[closeupready]

26. I never get tired of saying that.

They've made out like bandits over the last 30 years. It's past time that they started shouldering a much heavier share of the burden.

[WriteDown]

29. How?

The wealth you are talking about is not income.

[dysfunctional press]

32. never said it was.

but it does earn income every year.
LOTS of it in fact.

[WriteDown]

34. You're going to tax that how though...

Please explain your proposal.

[dysfunctional press]

37. raise the top marginal rate appreciably, treat capital gains as regular income...

& remove the income cap on fica contributions...

for starters.

[WriteDown]

39. Raising the top marginal rate would be a good idea...

but capital gains as income gets tricky. I know that I would just forget about having a 401K if that was the case and I'm a small fry. Be better off under a mattress. Raising the FICA cap is a good idea but then you would have to raise the benefit amount for those paying more.

[dysfunctional press]

42. "you would have to raise the benefit amount for those paying more. "

no, you wouldn't have to.

as far as raising the capital gains tax- a good way to do it would be with some type of marginal rate- the first 100k could be taxed at the current rate, while anything above 100K could be treated as regular income. that would prevent totally screwing over people who are approaching retirement, and plan to live off their investment.

[WriteDown]

44. You'd have to...

or it would likely be constitutional. Also the cap is at like 106K now. People on the coasts making 200K and below(middle class) would take a huge hit.

The first 100K of trading or the first 100K of selling?

[dysfunctional press]

45. the first 100k in capital gains, as reported as income.

btw- what happens to a single person's lifetime fica contributions if they die two days before(or after) their 65th birthday, and they have kids that are all over 21..?

[WriteDown]

46. Considering that many people's 401K's will total in the millions

mark at retirement(hopefully, 1 to 4 million is where it will have to be if you're going to retire in the next 20 years, as long as its tax free after 65 then there shouldn't be any problem. If you're making over 100K before 65 in some non-401K type of way, then it may work.

Not sure. Hope it never happens to me :).

[tencats]

30. How will we pay this debt?

Payback Time
Published: December 10, 2009
Many See the VAT Option as a Cure for Deficits
http://www.nytimes.com/2009/12/11/business/11vat.html?ref=business
Runaway federal deficits have thrust a politically unsavory savior into the spotlight: a nationwide tax on goods and services.
Members of Congress, like their constituents, are squeamish about such ideas, instead suggesting spending cuts or higher taxes on the rich. But with a lack of political will to do the former, and a practical ceiling to how much revenue can be milked from the latter, economists across the political spectrum say a consumption tax may be inevitable once the economy fully recovers.

“We have to start paying our bills eventually,” said Charles E. McLure, a tax economist who worked in the Reagan administration. “This strikes me as the best and most obvious way of doing it.”

The favored route of economists is known as a value-added tax, which is a tax on goods and services that is collected at every step along the production chain, from raw material to a consumer’s shopping bag. Similar to a sales tax, it generally results in consumers paying more for the things they buy. The revenues could be used to pay for health care or other social programs, or just to pay down existing debt.

Like universal health care, every other industrialized country in the world already has a value-added tax (as do about 100 emerging countries). And also like universal health care, this once-taboo policy option has recently been invoked, at times begrudgingly, by many prominent Washingtonians, including the House speaker, Nancy Pelosi; John Podesta, who was co-chairman of President Obama’s transition team; and two former Federal Reserve chairmen, Alan Greenspan and Paul A. Volcker

Read more at linked article written by CATHERINE RAMPELL

[dysfunctional press]

33. which department are you referring to?

as for our national debt- there's $50trillion in wealth in the u.s., so the money IS there.