Monday, August 8, 2011
Debt Ceiling Solution Comes With Great Cost, Marginalized Issues
The nation breathed a collective sigh of relief earlier this week, as Congress closed out its long debate with a comprehensive compromise bill to raise the debt ceiling Tuesday, signed by President Obama shortly after.
This comes after months of congressional deliberation, primarily focusing on the fundamental partisan disagreement on whether to raise taxes and by how much, favored by Democrats, or comprehensive spending cuts, favored by Republicans. The finalized bill, passed by the Senate Tuesday afternoon, calls for up to $2.4 trillion in spending cuts over ten years, with a specialized Congress committee appointed to determine where an additional $1.5 billion in funds will be cut from, reports CNN.com. If this half-Democrat, half-Republican committee of twelve is unable to come to an agreement on how to cut at least $1.2 trillion from the national budget by November 23, the Obama administration will be forced to make $1.2 trillion in across-the-board cuts in their stead.
As many have predicted and now come to realize, this is only the first step in a long road to economic recovery, with increasing wariness of another possible fall into recession. To the collective chagrin of many as well, the debt ceiling issue has become a hot button topic for political positioning, much of it in lieu of the upcoming presidential election in 2012.
Much of the post-debate media coverage, from liberal and conservative-leaning outlets alike, has focused on which group of politicians gained the most from the bill. In focusing on the small victories each side may or may not have had, important discussion on additional methods to remedy the U.S.’ economic crisis often falls to the wayside.
While the bill now provides a much needed increase in the nation’s allotted debt, allowing for additional borrowed funds, and also calls for comprehensive cuts, talks of increasing revenue and stimulus plans are ostensibly off the table. Bob Cesca, blogger for The Huffington Post and editor of his self-titled website, goes beyond even this concern in his blog post “The American People Lost the Debt Ceiling Debate.” “Simply put,” he states, “deficit reduction during a slow-growth recovery from an historically deep recession, with continued high unemployment and a housing market still in crisis, is just phenomenally stupid.”
Cesca also decries the lack of any provision in the bill aimed at increasing revenue to counter the U.S.’ debt and the ways in which the average middle-class citizen will be harmed by what the bill does aim to accomplish. He cites a CBS story that reports “the cuts will hurt ‘everything from the Head Start school readiness program, Meals on Wheels and worker training initiatives to funding for transit agencies and education grants that serve disabled children.’” Along with hurting the people these programs serve, the sweeping cuts will also eliminate scores of jobs, widening the already large pool of unemployed American citizens.
Cesca shares this concern with many onlookers, as a general reluctance to raise taxes is seen as harmful to any potential economic growth. With a Republican majority in the House of Representatives, Democratic representatives were understandable shy about forcing the issue, especially given the great delay in reaching an agreement, with the bill signed on the day of the government’s self-imposed deadline.
While a compromise was struck in time to prevent the nation from defaulting on its debt and deepening the wound left by financial woes in 2008, few would say an air of compromise is truly in the air.
Leading up to the bill’s finalization, Congress found itself deadlocked last month, with Republican Senate leader Mitch McConnell, R-Kentucky, and House Speaker John Boehner refusing to vote to raise the debt ceiling if tax hikes were included in any deal. In a report from The Huffington Postlast month, Senator McConnell was quoted as saying that “Sadly, the Democrats' response has been a mystifying call for more stimulus spending and huge tax hikes on American job creators. That's not serious, and it is my hope that the president will take those off the table on Monday so that we can have a serious discussion about our country's economic future.” President Obama’s stimulus plan, along with his healthcare legislation, has long been a point of contention among Republicans and helped to turn productive debates about how to erase the nation’s massive debt into a partisan quarrel.
Some conservatives have even gone so far as to blame Obama for the current economic crisis. In his opinion piece “Looks Like We’re In a Recession, Not a ‘Recovery’” for FoxNews.com, John Lott discusses the grim levels of unemployment in America, pinning the responsibility on the Obama administration. “Indeed, people giving up looking for work has been the hallmark of the Obama administration…during the Obama ‘recovery’ about 2.8 million more Americans have given up and completely stopped looking for work.” Unemployment and a general lack of job generation has been a serious issue for years; this began in 2008, however, before that year’s election had even been decided.
Democrats have not proved to be above squabbling, as Cesca, in his previously mentioned article, pins the economic downturn on Republicans, citing the huge tax breaks for corporations and the wealthy enacted by the Bush administration, with Obama forced into renewing them later on. He also cites the huge funds used for the wars in Afghanistan and Iraq as big contributors to the country’s debt.
The one thing both sides can both agree on is that the special committee of twelve chosen to decide where the additional $1.5 billion in spending cuts needs to proceed amicably. Without their cooperation, across the board cuts could potentially hurt the interests of both sides, with additional funds from American’s defense budget being eyed, in addition to the touchy institutions of Social Security and Medicare adjacent to the chopping block. A collaborative attitude is needed but is threatened by the positioning necessary for next year’s presidential election.