Tuesday, August 2, 2011

READ: The Debt Plan Cheat Sheet


I know folks are mad and ready to leave the country. But at the same time if you ask them what's in the Debt Plan, they can't tell you a damn thing. So, I found this cheat sheet from CNN to give everybody an idea on what's in the plan.

So here we go:
Raising the debt ceiling
• The bill raises the debt ceiling by a minimum of $2.1 trillion and a maximum of $2.4 trillion.
• By the end of the year, the limit on the U.S. national debt would be somewhere between $16.4 trillion and $16.7 trillion total.
• Both parties estimate that amount will give the government the borrowing power it needs through 2012.
• Under this deal, the debt is increased in two phases.
Phase one
• This bill would cut $917 billion in spending over 10 years.
• And it would raise the debt ceiling by $900 billion.
• Lawmakers involved say they believe the first phase gives the United States the borrowing power it needs through early 2012.
Phase two
• The debt limit could increase $1.2 trillion to $1.5 trillion in this phase, attached to deficit cuts of the same magnitude.
• The debt deal sets up one of three ways that Congress could trigger the next debt increase.
Trigger one: A balanced-budget amendment -- The debt ceiling would increase another $1.5 trillion if Congress passes a balanced-budget amendment to the Constitution. That requires a two-thirds vote in each chamber.
Trigger two: Super-committee -- The debt ceiling would increase up to $1.5 trillion if Congress passes broad deficit reform measures as recommended by a new joint committee. The ceiling would increase only by the amount of deficit cuts passed by the committee and Congress. Thus, if the committee passes $1.3 trillion in deficit cuts, the president could ask for only a $1.3 trillion increase in the debt ceiling.
Trigger three: Automatic cuts -- If neither of the above options happens, the lack of action triggers automatic across-the-board cuts in government. Those cuts would be up to $1.2 trillion and would trigger an increase in the debt ceiling of the same amount. Cuts would be up to 2% for Medicare, but the bill dictates they should not affect beneficiaries.
Initial spending cuts
• The $917 billion in cuts in phase one come as spending caps over the next 10 years.
• The bill does not delineate which agencies would take what amounts of cuts. Instead it would limit appropriators in future years to certain spending caps. Where the cuts hit would be up to future committees and Congresses.
• The caps do not cut total government spending year to year but instead shrink how much that spending grows. Put another way, under this plan discretionary government spending would still increase year to year but would increase by significantly less than under current policy.
• These are cuts in future spending.
Joint committee
Who: Twelve members of Congress, including six Republicans and six Democrats. Party leaders in each chamber chose the members.
When: The committee has until Thanksgiving to come up with a plan to cut up to $1.5 trillion from future deficits. Congress must vote by December 23.
Vote: The reform package would require a simple majority -- not the usual 60 votes -- to move through the Senate.
What: The committee can recommend any reforms in the federal budget. Its goal is to find $1.5 trillion in deficit cuts.
Please go to CNN to actually read the full deal.

7 comments:

Writer said...

I heard on NBC Nightly News that this doesn't actually solve any problems, rather it pushes the problems into the future past the 2012 elections.

=/

Daij said...

Like i don't have enough to worry about!

BosGuy said...

Very helpful. I find this whole thing very confusing.

ultragreen said...

This is a bad bill because it slashes non-defense spending to a greater extent than defense spending, and even provides an exemption for cutting spending in the "fight against terrorism" and wars abroad. Nor is there any provision for revenue increases (like tax increases for the rich and their corporations), which makes the bill even worse. Thus, the poor and the middle-class will be made to suffer, while rich people and their corporations will continue to receive a free ride.

It seems Speaker Boehner and the Republicans carry a special grudge against students of higher education, because this bill also terminates Stafford Loans for graduate and professional students! Well, so much for America having any kind of future.

I just have to tell you, the politicians we have in Washington are bunch of colossal idiots. This, of course, includes President Obama.

Stan said...

Read Paul Krugman's op-ed piece in the NY Times a few days ago called "The President Surrenders."

"In fact, Republicans will surely be emboldened by the way Mr. Obama keeps folding in the face of their threats. He surrendered last December, extending all the Bush tax cuts; he surrendered in the spring when they threatened to shut down the government; and he has now surrendered on a grand scale to raw extortion over the debt ceiling. Maybe it’s just me, but I see a pattern here."

http://www.nytimes.com/2011/08/01/opinion/the-president-surrenders-on-debt-ceiling.html

Anonymous said...

This is a bad bill. Period.

Kyle Leach said...

For progressives this was not a good bill. It does push things off until after the 2012 election, but what a high cost to pay for such a mysterious privilege.

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Viktor is a small town southern boy living in Los Angeles. You can find him on Twitter, writing about pop culture, politics, and comics. He’s the creator of the graphic novel StrangeLore and currently getting back into screenwriting.