Wednesday, August 3, 2011

Debt Deal Done Despite Differences & Difficult Decision

Despite the differences, and with much difficulty deciding, a deal on the debt is finally done.

The parties to this deal were the House of Representatives, led by Speaker Boehner, and Minority Leader Nancy Pelosi, the Senate, led by Majority Leader Harry Reid and Minority Leader Mitch McConnell, and President Obama.

The deal includes a $2.1 trillion increase in the debt ceiling and 10-year discretionary spending caps generating nearly $1 trillion in deficit reduction. A super Congressional committee will come up with a package of $1.5 trillion more in cuts and/or revenue enhancements that’s guaranteed an up or down vote by December. If Congress can’t agree to a package, automatic cuts will commence in 2013, split 50/50 between domestic and defense spending (exempting entitlement programs like Social Security and Medicare).

Good deal? Do the Republicans like it? What about the Democrats? What do the people think of the process, of Congress, of President Obama and the other players?

Let us look at the numbers. They should tell the story.

In the House of Representatives, 174 Republicans and 95 Democrats for a total of 269 voted for the deal, while 66 Republicans and 95 Democrats for a total of 161 voted against the deal. It takes 216 voters to pass it.

While Speaker Boehner claims victory and ownership of the deal, he needed at least 42 votes from the Democrats. The Democrats delivered for him while the Conservative Republicans (66 of them) failed him.

In the Senate, 51 Democrats, 22 Republicans, and 1 Independent for a total of 74 voted for the deal, while 6 Democrats, 19 Republicans, and 1 Independent for a total of 26 voted against it. It takes 51 votes to pass it.

While Senate Minority Leader Mitch McConnell is being given credit for the success of the negotiations and the deal by certain political analysts, the numbers tell a different story. Senate Majority Leader Harry Reid, who won in Nevada because of the overwhelming support of the Filipinos, actually delivered the winning majority with 51 votes from the Democrats, plus an extra vote from an Independent who usually join their caucus.

None of the Republican votes were needed to pass the deal, which was supposed to have been successfully negotiated by Republican leader McConnell.

Prior to the actual consummation of the deal, what did the people think of Congress? Again, the numbers tell the story.

According to the poll survey conducted by the Washington Post/Pew Research Center, 77% think that members of Congress in dealing with this issue behaved like spoiled children while only 17% considered them as responsible adults.

As of July 31, 2011, only 2% consider them in a positive light, while 72% view them negatively, and 15% have no opinion.

Asked to describe the negotiations with one word, the top ten words were:
Ridiculous                                    66      
Disgust/disgusting/disgusted                  42     
Stupid/stupidity                              36     
Frustrating/frustrated                        26     
Poor/poorly                                   25     
Terrible                                      25     
Disappointing/disappointment/disappointed     24     
Childish                                      23
Joke                                          22
Mess/messy                                    22     

How about the players in the negotiations? What ratings were they getting?
                                  More        Less             
                                favorable   favorable 
a. President Barack Obama          18          37                  
b  Speaker John Boehner            11          34               
c. Democrats in Congress           13          30                
d. Republicans in Congress         11          42               
e. Members of      Congress affiliated

    with the Tea Party movement    11          37                      

Now that a deal was done and a law was passed, I suspect that the numbers will tell a different story. To be fair, the following were accomplished for economic good and budget discipline:

  1. Debt ceiling was raised, so all obligations, appropriations, and expenditures will be paid;
  2. Removes the cloud of uncertainty until 2013. Good for the economy;
  3. Guaranteed deficit reduction of about $1 trillion;
  4. Bipartisan process to cut $1.5 trillion;
  5. If bipartisan process fails, automatic cuts 50/50 coming from domestic and defense respectively; and
  6. Process of coming together and shared sacrifice.

Who can claim credit for these modest, though insufficient accomplishments? As I said earlier, the numbers should tell the story.

While the Conservative Right forced the debate and, correspondingly, the direction toward deficit reduction, they were perceived as holding the economy hostage. The fact that they did not vote for the deal disqualifies them from claiming credit.

The numbers say that the Democrats more than the Republicans supported the concluded deal. They can therefore co-claim credit, along with some Republicans in the House, for whatever positive effect the deal would bring.

President Obama just debunked the Republicans’ allegations that he could not be entrusted to reduce the deficit and is otherwise fiscally irresponsible. While he is accused of being too liberal, his participation in negotiating this deal proved otherwise.

Personally, I would have preferred that he use the 14th Amendment of the U.S. Constitution which states, “The validity of the public debt of the United States, authorized by law… shall not be questioned,” Under this, he is empowered to raise the debt limit and pay the public debt.

He would have shown strong and daring leadership in a crisis, coupling his rhetoric with action.

My barber, on the other hand, hopes that cuts in defense spending will not result in fewer haircuts from his soldier clients.

No comments:

Post a Comment