As Aug. 2 Approaches, Two New Debt Plans?
One week from today, the government will literally be forced to live within its means. Now there are two plans about to be presented, one from House Speaker John Boehner (R-OH) and one from Senate Majority Leader Harry Reid (D-NV).
Absent from these plans is President Obama. He has been unceremoniously kicked out of the adult room, now relying on Senator Reid to be his proxy in these discussions. It’s about time, President Obama would pre-empt his meetings with Congress with press conferences demagoguing the other side and stifling negotiation. It’s very difficult to negotiate with someone who will smile while smacking you down in front of the entire country.
Speaker Boehner’s plan calls for $1 trillion in cuts immediately with a $1 trillion increase in the debt ceiling. Then a bipartisan committee would be charged with finding an addition $2 trillion in cuts to get the country through 2012 and the elections. There are no real details right now, though they are expected to be made public later this afternoon.
Senator Reid’s plan calls for a $2.7 trillion increase in the debt ceiling with an equal amount of spending cuts, although more than $1 trillion in cuts are assumed savings from the winding down of the wars in the Middle East. Those numbers aren’t concrete. When we see the details, we’ll certainly identify more gimmicks. The increase would last through the elections.
Neither appears to take on the sort of transformational changes our country needs.
The only good news is that Congressional Democrats appear to have taken tax hikes off the table, and that is a good thing if we are expecting to create jobs. So far, Republicans have offered several plans, and passed one, but everything they pass gets killed on party-line votes in the Senate.
It’s going to be an eventful week in Washington.