To Escape Chaos, a Terrible Deal

[cali]

Published: July 31, 2011

<snip>

For weeks, ever since House Republicans said they would not raise the nation’s debt ceiling without huge spending cuts, Democrats have held out for a few basic principles. There must be new tax revenues in the mix so that the wealthy bear a share of the burden and Medicare cannot be affected.

Those principles were discarded to get a deal that cuts about $2.5 trillion from the deficit over a decade. The first $900 billion to a trillion will come directly from domestic discretionary programs (about a third of it from the Pentagon) and will include no new revenues. The next $1.5 trillion will be determined by a “supercommittee” of 12 lawmakers that could recommend revenues, but is unlikely to do so since half its members will be Republicans.

If the committee is deadlocked, or its recommendations are rejected by either house of Congress, then a dreaded guillotine of cuts would come down: $1.2 trillion in across-the-board spending reductions that would begin to go into effect by early 2013.

Negotiators have tried to make this penalty mechanism as unpalatable as possible to provide an incentive for the supercommittee and Congress to avert it. For Democrats, the penalty would include cuts to Medicare providers. The penalty for Republicans should have been new tax revenues, but of course they refused to consider that and got their way. Instead, their incentive will be trying to avoid large cuts in the military budget.

<snip>

http://www.nytimes.com/2011/08/01/opinion/to-escape-chaos-a-terrible-debt-deal.html

[Ichingcarpenter]

1. The Deal was aluminum siding for a brick home

that you guarantee with the mortgage on your home.

[Skittles]

2. it's a steaming pile, indeed

reminds me of healthcare "reform"

[Paper Roses]

3. I just heard a brief recap of this proposal on the news.

Enough to turn your stomach.


Two of the commentators were reviewing different scenarios. One of the comments made was that the US could, as a result of this 'compromise' lose it's AAA credit rating.

One of the results of this event, should it happen, would be a rise in interest rates.
Example: $200,000 mortgage, average monthly payment will rise by about $125.00.

I may have missed part of the chat, maybe later the news folks will sort it out and we will hear a real recap of things. No matter what they do, I feel we were all shafted. GE still pays no taxes on their profits. Things like that frost me to no end.

Great work, Washington.
What an unholy mess!