Some things that aren't being reported (or reported very much) about the debt deal

[BzaDem]

As everyone is reporting, the debt deal contains around 900 billion in cuts up front, and another 1.2-1.5 trillion in cut triggered if the committee doesn't approve anything. But here's some info about what these cuts actually entail.

1. Most of the 900 billion of discretionary cuts in the first stage is actually fake. Why? Because no Congress can bind future Congresses on discretionary cuts.

Here's how this works. Let's say Congress passes a bill that purports to cap discretionary spending in the out years. (Most of the 900 billion is in the out years -- not in the immediately coming years.)

Well, Congress decides on the discretionary spending amount every year with appropriations bills. What if Congress wants to spend more than the cap? Then they just have to spend more in the appropriations bill, and add the phrase "notwithstanding any language in the debt ceiling bill to the contray."

Now, of course, it could be the case that at least for the next few years, Democrats and Republicans decide to observe the cap. But this would be completely independent of the debt ceiling bill. If Democrats wanted to spend more than the cap, they would attempt to insist on it in those negotiations, just like how normal appropriations negotiations work. If Republicans wanted to spend less than the cap, they would similarly attempt to insist on it. In other words, the discretionary caps are fake, since they don't change the parameters of th normal yearly appropriations negotiations. Any agreed cuts would be due to both sides agreeing on them in appropriations negotiations -- not the debt ceiling bill. So the 900 billion in "cuts" don't actually cut already-authorized spending at all.

2. Of the remaining 1.2-1.5 trillion that is triggered if the super commission doesn't meet, HALF of it is defense. The remainder of the trigger EXEMPTS all entitlement benefits (Medicare, Social Security, Medicaid), and programs for the poor (which look like they include food stamps/veterans benefits/etc). As far as Medicare, it only includes limited Medicare provider cuts of the type similar to that in HCR (that the IPAB will likely recommend anyway). It also includes some more discretionary cuts, which (as outlined above) are not actually real cuts to any authorized spending and can easily be overridden in the appropriations process.

So the trigger looks tilted against Republicans. If it is triggered, you can bet that Republicans will try to pass a bill reinstating all the Defense cuts, and Democrats will try to pass a bill reinstating all the other cuts. The natural compromise (if any) will likely be removal of the trigger (similar to how the doc fix ignores a similar trigger passed in 1997 for Medicare).

So in the best case scenario if the committee deadlocks, the trigger is simply repealed (since most Republicans will do quite a bit to prevent almost a trillion in defense cuts). In the worst case scenario, the entire trigger (and therefore the entire deal) only results in around 400 billion of actual real domestic cuts to already-authorized spending, over 10 years.

3. The other trigger that will occur at the same time as the triggered spending cuts will be the expiration of all Bush tax cuts. Reports have indicated that Obama is selling the debt deal to the Democratic caucus by saying that regardless of what hostages Republicans take in 2012, they will all expire unless Republicans agree to let the tax cuts on the rich expire and agree to tax reform. So the trigger isn't really just cuts -- it is cuts plus a 4 trillion dollar tax increase, all at the same time. This gives Democrats a huge amount of leverage, that they don't have right now.

Just food for thought.

[flamingdem]

1. It's looking like a face saver

and then the Bush tax cuts expire.. but who knows

[tularetom]

2. A fake debt deal to resolve a fake debt crisis - how appropriate

Why the hell do we get all pissed off at the process. We should know by now that the end product was probably decided a long time ago and all this drama was window dressing to make us believe the participants actually stood for something.

If you weren't cynical about your government before this.....

[BzaDem]

3. kick

[Igel]

4. Medicare is cut.

You can pay for fewer services or you can make it so fewer services are available. The difference is that one is a heinous act by an uncaring government and the other is a completely predictible "unintended consequence" that allows us to blame the greedy providers.

Somehow, when it's our wages being cut we think it's nasty, even if we're earning $90k a year. When it's somebody else's wages being cut, as long as they earn more than us that's great.

Point 1: Yes. Except that it's hard to know what a budget cut is if there's no budget to cut it from. If I say I'm cutting my food budget for 2015 by $500, what does that even mean? By comparison to today? From next year's food budget? From the follow year's food budget?


The first thing they need to do is to pass a budget, so that we have a clear idea what we're talking about. One for this year would be nice. One last year would have been nice. Heck, we didn't even have a decent one passed for 2008--* threatened a veto because he didn't like the budget increase worked into it by the House and/or Senate, so most non-military discretionary spending in the * budget for 2008 was passed after * left office and was signed by Obama. But I'd settle with one passed by the House and the Senate for 2012. I'm tired of continuing resolutions, special appropriations, and non-budget deemed to have been approved as buddgets. It's really hard to argue over deficit levels when all you have are continuing resolutions and things non-budgets "deemed" to be budgets. (Meaning that when you find an opportunity to fight over the deficit, you take it even if it is displaced. Ahem.) But I'm predicting that the Senate won't pass an Obama budget during Obama's first term.

The second thing they need to start doing is stop talking in 10-year time-frames. I project my income over the next 10 years to be over $500k. That doesn't tell me a heck of a whole lot. Year 1 is fuzzy already. So I'm going to pledge to reduce my spending by 4% in 2020, talk like that means anything, and expect to be taken seriously? It's a way of saying nothing but induces people to nod and say, "Ah, he's saying something." If they weren't already politicians, that would cause me to lose respect for them.

[BzaDem]

5. But the cuts to Medicare providers are limited, and would mostly come anyway under HCR's IPAB. There

isn't really much new here for Medicare. On the other hand, there are huge new cuts to defense.