As the House and Senate pass the debt-limit bill and the President signs it, discussions continue as to who showed the most leadership and which party had concern for the most vulnerable in US society.
The deal, hammered out over the weekend after weeks of feverish speculation, raises the debt limit by up to $2.4tn (£1.5tn) from $14.3tn, and makes savings of at least $2.1tn in 10 years. In a key point for President Obama, the bill would raise the debt ceiling into 2013 – meaning he would not face another congressional showdown on spending in the middle of his re-election campaign next year.
The compromise deal deeply angered both right-wing Republicans and left-wing Democrats. Liberals have been unhappy that the plan relies on spending cuts only and does not include tax rises, although Mr Obama could still let Bush-era tax cuts for the top brackets expire in January 2013. House Republicans were displeased that the bill did not include more savings.
Announcing the deal on Sunday evening, President Obama said that, though it was not the one he would have preferred, it was a “serious down-payment” on the US deficit. The deal would enact more than $900bn in cuts over the next 10 years.
It would also establish a 12-member House-Senate committee charged with producing up to $1.5tn of additional deficit cuts over a decade. If the panel failed to produce at least $1.2tn in deficit savings, spending cuts would take effect across much of the federal budget.
The Pentagon would be among those areas affected, but in a concession to Democrats, individual benefits under Social Security, Medicaid and Medicare would be exempt.
The legislation also requires the House and Senate to vote on an amendment to the Constitution, forcing the US to balance its budget. The political stalemate has unsettled financial markets, endangered Washington’s coveted triple-A credit status, and exasperated Americans still grappling with unemployment of 9.2%.
See also Episcopal Café video blog.
What do you think about the deal?
See more below from Episcopal Public Policy Network:
From The Episcopal Public Policy Network
Congress has reached an agreement to raise the debt ceiling as well as make deep cuts in the federal debt. The agreement requires up $2.4 trillion in deficit reduction and a maximum $2.4 trillion increase in the debt limit in two stages. It immediately produces $917 billion in savings through FY 2021 by capping discretionary spending each year, and provides for a $900 billion increase in the debt ceiling. The agreement also creates a 12-member joint congressional committee to develop a plan for an additional $1.5 trillion in deficit reduction that Congress would vote on in December.
While the debt ceiling agreement reached this week has averted an economic default that would have had catastrophic consequences for the global economy, it comes at a steep price. Unfortunately, the process for reaching an agreement has resulted in a deficit reduction plan that asks those who are least able to afford it to bear a disproportionate share of the burden in reducing the debt. Essential services to children, seniors, people with disabilities, the unemployed and uninsured will be drastically cut to help reduce the debt.
To learn more about the impact of the debt ceiling agreement on low-income communities, please find out how to be a part of a special webinar sponsored by the Interreligious Working Group on Domestic Human Needs:
To get connected to the webinar, sign in as a guest and let them know that you are an Episcopalian (e.g., John Doe, St. Mark’s Episcopal Church):