The Latest Version of the Debt Ceiling/Austerity Bill

Some details are out on the debt bill that Harry Reid signed onto this afternoon. This plan apparently was worked out between the White House and Mitch McConnell–no Democrats involved. It doesn’t sound as extreme as previous versions, but we won’t know until everything plays out, I guess. Reid is hoping to hold a vote tonight so the House will have time to respond tomorrow.

Here is how the deal will work, reported by Brian Beutler:

It guarantees the debt limit will be hiked by $2.4 trillion. Immediately upon enactment of the plan, the Treasury will be granted $400 billion of new borrowing authority, after which President Obama will be allowed to extend the debt limit by $500 billion, subject to a vote of disapproval by Congress.

That initial $900 billion will be paired with $900 billion of discretionary spending cuts, first identified in a weeks-old bipartisan working group led by Vice President Joe Biden, which will be spread out over 10 years.

Obama will later be able to raise the debt limit by $1.5 trillion, again subject to a vote of disapproval by Congress.

That will be paired with the formation of a Congressional committee tasked with reducing deficits by a minimum of $1.2 trillion. That reduction can come from spending cuts, tax increases or a mixture thereof.

So McConnell has accepted the possibility of tax increases. I doubt if that is going to go over very well with Boehner and his Tea Party nutbags. The trigger is still in the bill.

If the committee fails to reach $1.2 trillion, it will trigger an automatic across the board spending cut, half from domestic spending, half from defense spending, of $1.5 trillion. The domestic cuts come from Medicare providers, but Medicaid and Social Security would be exempted. The enforcement mechanism carves out programs that help the poor and veterans as well.

Politico reports that at 7PM, John Boehner finally announced a conference call with House Republicans at 8:30, so it should be starting as I write this. Says Politico:

A quick strong Senate vote for the deal would add to the pressure on Boehner, and Reid went so far as to suggest that the Senate could even vote Sunday night: “Hope so” was his answer to reporters after meeting with Pelosi. But from the administration’s standpoint, no deal is meaningful without assurance of Republican support in the House, and that remained a big question mark going into the evening.

Boehner’s office insisted that it was simply waiting to hear back from the White House on some “bottom-line” provisions, and indeed details were still being resolved. But administration officials said privately that pro-defense House lawmakers were putting pressure on the speaker over the Pentagon’s share of reduced 2012 appropriations as well as further threatened defense cuts if the deficit-reduction targets are not met.

So there you have it, but what does it all mean? My immediate reaction to the smaller numbers and the assurances on Social Security and Medicaid is that it’s some kind of trick to get us thinking the austerity psychosis in the White House is letting up a bit. But they still have the “committee” AKA Catfood Commission II to fall back on.

I’ll update in the comments if I hear anything more. Please do likewise if you’re surfing around.


44 Comments on “The Latest Version of the Debt Ceiling/Austerity Bill”

  1. bostonboomer says:

    Just got this on Twitter. Market Watch says the Senate vote will be tomorrow. They have a live blog going.

    http://www.marketwatch.com/story/newsviewer?siteid=bnbh

  2. joanelle says:

    Oh, this ship of fools.

  3. bostonboomer says:

    Wall Street Journal’s take:

    Basically the numbers haven’t changed that much–it will just happen in 3 steps. OK, wait a minute. The WSJ says the bill will impose spending caps. That’s not good.

    For all the down-to-the wire drama, the deal leaves the hardest questions unanswered, setting up months and years of additional debate and fiscal pain. It imposes spending caps for the next 10 years, but leaves the details of what programs would be cut to congressional committees.

    It’s hard to tell if the terminology that’s being used is consistent across sources.

    • bostonboomer says:

      More:

      …it launches a ferocious, months-long argument over how to rewrite the tax code and what changes to make in popular programs like Social Security and Medicare—issues that were ultimately shelved in this debate.

      So while one uncertainty would be lifted from the economy with the increase in the debt ceiling, a series of others would be prolonged.

  4. bostonboomer says:

    According to MSNBC, John Boehner told his people on the call that future spending will be capped by this bill.

    • dakinikat says:

      Thanks for this smart update BB! I think we’re continuing to see change that more and more people will come to regret. Recession starting 2012. Count on it.

      • Sima says:

        I’m thinking this is so. Recession in 2012. Did my quarterly budget for the house and farm. In the last 3 months our spending on food has shot up. It’s actually worse than it was a few years back when the first recession (mini-depression?) happened. I’m scared, I have to admit it. Been so scared I’ve been trying not to look at what is going on.

  5. mjames says:

    I’m sorry. My BS meter is going ballistic. Obama negotiating solo with McConnell? Yeah. Good idea. And now he’s forcing the Dems to accept the deal. Right. I’m sure it’s a super duper deal. That Obama is a great negotiator. The rich are going to pay more? What’s that you say? No? Oh, and Obama extended the Bush tax cuts without a whimper so I should believe he’s sincere now?

    There was – and is – no reason for any of this, except to lay the groundwork to steal our Social Security and Medicare. That’s it. They’re all in on it – Pelosi, all those supposed progressives in Congress, every last one of them. We’ll have Catfood Commission II and III and on and on until there is no social safety net left. That’s the plan. This is the first step. (I have to hope the Tea Party purists refuse to go along, because there isn’t a Dem I can see with any convictions.)

    Anyone who stands with this man is either utterly venal or insane or afraid or unable to see what’s right in plain sight. Plouffe saying this morning that Obama will be reelected because he’s the adult in the room showed me clearly what this is all about for Obama. His reelection. Sell out granny and the grandkids and the sick and the poor – that’s our adult president for you.

  6. mjames says:

    Oh, the tax code too. Great. Let’s get rid of the mortgage deduction and the medical expenses deduction. They don’t want anyone owning a home. And they don’t want anyone going to the doctor. First, they refuse to institute Medicare for all or universal health care and now they’ll punish us for daring to pay our own medical expenses as we go (which is what I do). I am beyond disgusted. And, from what I’m reading around the blogosphere, I am not alone.

    This is not a representative democracy. Not in the least. It is an oligarchy.

    • Back Bay Style says:

      What they want is to send us back to nineteenth centruy servitude. And yes, it’s an oligarchy.

      • Sima says:

        Hear, Hear. It’s gonna take all the turmoil and upheaval at the start of the last century to break out of the crap that this century is creating. Dunno if I’ll live long enough to see it, but it’s coming.

  7. Riverbird says:

    Off topic: I want to thank everyone who posts here for helping me retain a shred of sanity during these last several days while I’ve been obsessively following the debt limit goings on. My friends are Obama supporters who are oh so disappointed in their hero, so it’s good to be here with others who saw through the guy from the beginning.

    Thank you!

    • WomanVoter says:

      At this point we are all disappointed equally, I personally never thought Obama would offer up Social Security and Medicare and then Medicaid. Shocking, distressing and a Democratic Betrayal. Pelosi should resign as Minority Leader, she has not put up a fight, so she must endorse this too, as all the other anti-working people bills he has pushed for the Republicans and the Ultra Rich.

      07.27.11: “We’ve Had It” Rep. John Conyers Calls for Protest on Obama on Jobs

      • Fannie says:

        He offered up women’s health care rights, and poor people’s too. This is how he deals, otherwise how else can we explain it?

        Thanks for sharing, like you, none of thought he was qualified.

    • bostonboomer says:

      Thanks Riverbird, and thank YOU for pitching in with comments. We sane people need to stick together.

    • WomanVoter says:

      WomanVote Woman Voter
      Correction:3 COWS! @chezpazienza Next big dilemma for the Dems: where to plant the magic beans the Republicans just traded them for our cow.

  8. northwestrain says:

    A sneaky way to kill medicare. Keep reducing payment to providers until no doctor, clinic or hospital will accept medicare patients. Comments below from Shakesperesister blog —

    I wonder if this plan can be used to cut the military budget? Pay the suppliers 50% and keep lowering the payment.

    That’s what the major corporations are doing. They keep lowering what they will pay — because they hire the same guys who write the government regulations — revolving door between regulators and their next job.

    ===================================

    ani_alexis Today 12:06 PM
    Oh, that’s fine then, because not paying providers will definitely have
    no effect on beneficiaries when they can’t find any providers willing
    to accept them as patients!

    On the nose.  ON. THE. NOSE.

    One of my longtime clients is a multispecialty healthcare corporation, and I’ve done their Medicare fee schedule for several years.  Currently, Medicare pays, on average, 45 percent of what it costs them to provide services.  (They bill patients for the remaining 55 percent but often don’t get it, because fixed incomes &etc.)  Their member practices are already making loud noises about exiting Medicare altogether.  Further provider cuts will only make them pack up faster. 

    Said corporation includes several crucial practices, including every GI practice in town, two of the cardiac specialists, and the only vascular surgeon who still takes Medicare.   So I guess nobody who needs Medicare around here had better get any gastrointestinal maladies or cardiovascular problems, or had better invent some Magical Universal Disease-Curing Bootstraps(TM) posthaste.  *headdesk*

    Pasted from

    vesta44 Today 12:15 PM
    We are well and truly fucked. As a fat woman, I need to find a new doctor that isn’t a fat-phobic asshat. As a fat, disabled woman who has Medicare/TriCare for insurance (Medicare pays first, then TriCare pays), Congress is making it harder for me to find that new doctor. Right now, Medicare only pays 28% of what a doctor/hospital bills, and they want to cut it further? TriCare, as another government insurance (through the military), doesn’t reimburse any better. So the total that both of my insurances pay toward my medical bills is less than 50% of what is billed. And the government is howling about the high cost of health care. But that’s okay, the cost is too high, so we’ll just cut back some more on what we’ll pay, never mind that doctors/hospitals will now refuse to take people with Medicare (some already do, as they also refuse to take people with Medicaid). They’re old and poor, or just poor, who needs them anyway. If they die off because they can’t get the health care they need, good riddance, less money we have to spend on them for Social Security and Medicare/Medicaid, the savings will be whopping (/sarcasm). At this point, all I can say is “Fuck them all.”

    Pasted from

    • bostonboomer says:

      Public hospitals have to accept Medicare. I don’t know how it is where you live, but very few doctors around here accept it. You have to go to see a doctor who is connected to a hospital to get care. And that is even if you have a Medicare supplement plan (and those are expensive.).

      • northwestrain says:

        You have to go to see a doctor who is connected to a hospital to get care.

        Exactly– a lot of doctors don’t see Medicare patients. I’m still covered by med insurance with a very high deductible — however I have a lot of retired friends who have a day’s drive to see a specialist who is connected to a public hospital. By the time I’m eligible Medicare as we know it now, will be dead. ,Thanks to 0bowma and the other Republicans.

        For some reason Republicans don’t need doctors or Social Security — but the polls say otherwise. We the people are concerned about Jobs.

  9. WomanVoter says:

    Does anyone have a link to the Boehner Power Point? I would really like to see the details and I also would like to have everyone go on record as READING THE BILL! Scary to have the Democratic President offer ups programs that the people pay for and that their employer paid for…fraud and robbery comes to mind…

  10. jillforhill says:

    The CBC and progressives said they more than likely will not vote for it. The republicans in the senate said they will filabuster and force a 60 votes.

    This is Boehner’s powerpoint he showed the republicans:

    Click to access 3-7-31-11-Debt-Framework-Boehner.pdf

  11. bostonboomer says:

    Oh, BTW, none of the cuts take effect until 2013, so the pain won’t hit until after the election.

  12. bostonboomer says:

    Krugman: The President Surrenders.

    A deal to raise the federal debt ceiling is in the works. If it goes through, many commentators will declare that disaster was avoided. But they will be wrong.

    For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status.

    • Back Bay Style says:

      Well, Krug is a little bit sheltered. I’d say we’re already about 3/4 of the way to banana repub out here in the real world.

      And BB, we don’t have public hospitals in MA anymore. BMC and Cambridge Health Alliance are “quasi-private” meaning they are required to take Medicare and Mass Health patients, but they pretty much “treat ’em and street ’em.”

      • bostonboomer says:

        I shouldn’t have said it that way. The way it works is that any hospital that takes federal money has to take Medicare patients. Unless that has changed too.

    • propertius says:

      Once again, Krugman misses the target. It’s not surrender if you get what want. Fortunately, as BB noted, it doesn’t take effect until 2013. What a bad Congress and worse President have enacted, a good Congress and President can repeal.

      Fire them all.

    • dakinikat says:

      We’ve been a banana republic since the supremos anointed dubya.

  13. Riverbird says:

    I hate to think who’ll be on the Joint Committee, aka Catfood Commission II. Gah.

    • northwestrain says:

      6 DINOs and 6 Tea Party — or some such garbage. Whatever — whoever has the most blackmail on the other members.

      • bostonboomer says:

        The members will be appointed by the leaders. Nancy Pelosi will probably appoint some real Dems. Harry Reid might too.

        But I really think some liberal organizations should go to court on this. I don’t see how it’s constitutional to have Congress forced to vote up or down on important policy issues with no amendments possible. That basically removes any pretense of representational Democracy from the process. Why bother having representatives from all the states then? Just let a committee make all the decisions. That seems to be where we’re headed.

      • Minkoff Minx says:

        I don’t know BB…my bet is only false Dems will be a part of this ridiculous committee….and my guess is they will be people who we here on SDB have had issues with before.

      • northwestrain says:

        Why not do away the Congress & Senate? THAT would be a major cost saving right there. At the same time void all congressional pensions and health care — another huge savings.

  14. northwestrain says:

    O.K. here’s some humor — vagina is the stronger of the two genitals — comedian gives examples. Balls not all that brave.

    • WomanVoter says:

      OK, I will admit, I laughed…

    • JeanLouise says:

      I love Hal Sparks! I can’t tell you how many times I cursed men and some women for using that kind of language. I was once told by my former boss that I wasn’t a pussy because I was tough and capable at my job. I thought that it was a particularly inappropriate comment since I was wearing pink lace bikinis under mny uniform.

  15. JeanLouise says:

    Obama is bragging that this deal brings domestic spending to the lowest levels since the Eisenhower administration. There was no Medicare or Medicaid during the Eisenhower administration. There was little or no spending on the poor during the Eisenhower administration. There were even unions to fight for the rights of working people during the Eisenhower administration.

    Obama is eagerly presiding over the disintegration of the social safety net that has assisted, even saved, people for eighty years.

    If Bill Clinton tries to put lipstick on this deal, I’m finished with him.

    • paper doll says:

      Obama is bragging that this deal brings domestic spending to the lowest levels since the Eisenhower administration

      WTF????

      • Sima says:

        That was my reaction, WTF???? This is supposed to be a GOOD thing? Low domestic spending in a recession/depression!?!?!? Gah.

  16. madaha says:

    Thanks for The Who. That kind of thing is the only thing keeping me going lately. ❤

  17. JeanLouise says:

    I believe that the best thing that could happen is that neither the House nor the Senate pass this mess and Obama is left with nothing but the 14th Amendnment. The House impeaches him. He resigns, Biden takes over. Hillary enters the race and Biden, realizing her superiority, withdraws from the field!

    Hurrah!!! HILLART 2012

  18. foxyladi14 says:

    dow down 114 points at noon.just like bo wanted 👿