Monday, August 1, 2011

Obama Gets His Grand Bargain

Not good:
WASHINGTON -- Congressional leaders and President Obama on Sunday night announced they've cut a deal to avert a historic U.S. default, saying they have assembled a framework that cuts some spending immediately and uses a "super Congress" to slash more in the future.

The deal calls for a first round of cuts that would total $917 billion over 10 years and allows the president to hike the debt cap -- now at $14.3 trillion -- by $900 billion, according to a presentation that House Speaker John Boehner (R-Ohio) made to his members. Democrats reported those first cuts at a figure closer to $1 trillion. It was unclear Sunday night why those two estimates varied.

The federal government could begin to default on its obligations on Aug. 2 if the measure is not passed.

The next round of $1.5 trillion in cuts would be decided by a committee of 12 lawmakers evenly divided between the two parties and two chambers. This so-called super Congress would have to present its cuts by Thanksgiving, and the rest of Congress could not amend or filibuster the recommendations.

But if the super Congress somehow failed to enact savings, the measure requires automatic cuts worth at least $1.2 trillion. Those cuts would be split equally between military and domestic programs. Social Security, Medicaid and programs for the poor would be spared, but Medicare providers -- not beneficiaries -- would take a hit.

White House officials confirmed that there would not be an extension of unemployment benefits as part of the final package. The administration had insisted that an extension be part of the grand bargain it was negotiating with Boehner. But when those discussions fell apart, so too did efforts to ensure that unemployment insurance was part of a final package. A senior administration aide added that the president would push for an extension in the months, if not weeks, ahead.
Your obligatory reminder that this "deficit crisis" is 100% made up:

Putting aside the fact that this type of austerity is completely unnecessary and will hurt the economy, this new Catfood Commission on steroids scares the shit out of me.

"Supercongress" will include 12 politicians (6 Rs, 6 Ds), who will be no doubt taken from the Catfood Commission alums, all share a deep desire to cut social security and medicare.

And... unlike the rest of our broken government these recommendations will be given a simple up/down vote with no filibuster in the senate. Even if there wasn't a threat of a trigger, I still think this commission's recommendations have a very good chance of passing both houses of congress.

People don't like being blamed for cuts to social security and medicare... but if it can done in this type of bipartisan love fest where no one is to blame? I like those odds.

Using the threat of default to impose austerity? The shock doctrine lives on. Anyone who hasn't read the book should really consider doing so, it's become the rule of our politics more than I could have ever imagined in a post Bush world.

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