Tuesday, August 2, 2011

Winners and Losers from the "Debt Deal"

The Apocalypse has been avoided!  Lawmakers from both major political parties finally came to an 11th hour agreement to avoid default on our loans.  Now that the bloodbath is over, let's take a look at who came out as a winner or loser.

President Barack Obama -- Winner and Loser.  The president did himself a favor by not completely caving to GOP demands and he did broker a compromise, but has probably lost credibility from the liberal wing of his own party for not pushing the repeal of Bush-era tax cuts for the wealthiest 2% of Americans.

House Speaker John Boehner (R-OH) -- Loser.  His persistence at "holding the line" makes him look boorish and unwilling to compromise.

Senate Minority Leader Mitch McConnell (R-KY) -- Winner.  With Boehner having zero appeal to the public, McConnell spent more time in the media spotlight and from the surface, appears to have been a big help in forging a compromise.

The Democratic Party -- Losers.  They wanted an increase on the debt ceiling and received it.  However, this is a pyrrhic victory, at best.  In return, they only 'bought' enough purchasing power to last through the early part of 2012.  Democrats also had to agree to a series of three 'trigger' mechanisms that would allow for another debt ceiling increase. 

The first mechanism triggers an increase if an amendment to the Constitution is made requiring a balanced budget.  Odds of that happening?  Since the Constitution has only been amended 27 times, with 10 of them almost immediately, I'd say not great.

The second trigger creates a joint committee of 12 members from both parties, already being dubbed a 'Supercongress.'  (Really -- I couldn't make that up.)  This committee would be responsible for making suggestions on how to cut the budget and a vote will be required before the end of 2011.  The group can also recommend a debt ceiling increase, but only in the amount they recommend to cut from the budget.

The last trigger could be the one that frightens liberals the most.  If neither of the first two triggers is set off, and the nation is in danger of default, automatic budget cuts would take place across the board.  This would include entitlement programs (insert curse words here). 

Democrats made a big sacrifice for little gain.

The Republican Party -- Winners, mostly.  See the above explanation about why the Democrats were losers.  The debt ceiling was going to increase -- it was only a matter of what it would cost in the deal.

Special mention for Senator John McCain (R-AZ) -- Winner!  He put the entire Republican Party on blast for their brutish tactics. Check out his great sound bite, complete with reference to Lord of the Rings

One small point to add:  the Tea Party nearly screwed this up.  Their insistence at not increasing the debt ceiling was a foolish act. 

I understand they have the desire to please their constituents by not voting for this bill, but had this deal not been passed, the entire country would have suffered.  Check that -- the entire world would have suffered.  The American economy / market has a ripple effect and many legislators weren't thinking about the bigger picture.


The American public -- Losers, big time.  Congress is busy patting themselves on the back for the Budget Act of 2011 when they ought to be ashamed.

Mismanagement of the budget and national debt for decades nearly pushed our nation into a severe economic crisis.  Members of both parties and all ideologies did even more damage than thought possible to Congress' already diminuitive reputation. 

The polarized political environment has transformed from being simply petty to offensive.  The pride of 535 people nearly inflicted great harm to over 300 million.

2 comments:

  1. The world and the U.S. are going to be losers no matter what happened with this. Europe is on the brink of economic collapse with the problems in Greece and Spain. The U.S. credit rating is probably still going to get downgraded even though they made this deal. It is a losing proposition for the entire world with what they have compromised on.

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  2. The fact that the budget was tied in with raising the debt ceiling is absurd. This was a phony crisis created on purpose when we should have been talking about jobs. But jobs help the economy and lower the unemployment level and therefore can give Obama a leg up come election time. Why would the Republicans want that?
    And besides, when has the federal government ever ran a balanced budget? It's not supposed to. I smack my head in disbelief that the tea party and their obtuse ideas are even a part of our political discourse.

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