Boehner Releases Framework of Debt Ceiling Deal

By | July 31, 2011

John BoehnerOn Sunday night, Obama announced that a deal on the debt ceiling had been reached. While House minority leader Nancy Pelosi was saying that some or none of her Democrats might vote for the proposal, House Speaker Boehner held a conference with the leaders on the right side of the aisle.

Later Sunday night, he released the details of the framework on his website.

The framework is a two-step increase with a trigger:

Phase one is an immediate $900 Billion increase to the debt ceiling that will hold the government over until roughly February. In exchange for that increase, discretionary spending will be cut and capped immediately which will save $917 Billion over ten years. In an effort to prevent the increase from happening without the savings (remember Reagan anyone?), the ceiling increase will not occur until Congress and the President implement the spending cuts. This would signal that a short term measure will need to be passed to allow a small debt limit increase (perhaps a week’s worth) while Congress irons out the spending cuts.

Phase two: The President can ask for a second debt limit increase of $1.5 Trillion if either a balanced budget amendment to the Constitution is sent to the states for ratification or a the recommendation of a 12-member special committee are implemented that would save more than $1.5 Trillion.

The trigger: Specific spending caps would be put in-place to limit spending. If the government fails to remain below these limits, it will trigger across-the-board cuts to government spending. The trigger is specifically hit if the Joint Committee fails to achieve at least a drop of $1.2 Trillion in the deficit. Once the trigger fires-off, the President can request another $1.2 trillion increase in the debt-limit. If the increase is passed, across-the-board cuts in all government spending equal to the difference between $1.2 trillion and the amount of the deficit reduction enacted by Congress. These cuts would be equally applied to mandatory and discretionary spending, both defense and non-defense. While Medicare would be included in the cuts, Social Security, Medicaid, veterans benefits and government pay (civilian and military) would not be affected.

One way to read the summary presentation from Boehner is that the triggers could cause the spending cuts to be split 50-50 between Defense and Medicare spending. Some reports have said that the Medicare spending would only affect providers (hospitals, doctors, suppliers) not beneficiaries.

As a final note, the framework includes no tax hikes, but the committee will be free to recommend them as a method for reducing the deficit.

 

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0 thoughts on “Boehner Releases Framework of Debt Ceiling Deal

  1. doctorhugo Post author

    Politicians???!!! Waddya expect – NO PRINCIPLES!

    CAUTION: You’ll need to have had a minimum of 6 years of formal elementary school education to understand this.

    Phase One – aka “Loading up the Nuclear Rectal Suppository”
    Excuse my jaded views, but if past performances are any yardstick of judgement then WE the People got the old fast-shuffle from BOTH parties who are BOTH too gutless to do the right thing. When you read that “discretionary spending will be cut and capped immediately which will save $917 Billion over ten years” you naturally assume that means $91.7 per year. WHY? Knowing politicians feckless manner for dealing with present problems in the present it might be calculated and be GRADUATED SAVINGS in such spending. How would you like it if you found out that in the first year the savings would only be $20 billion or so? OOPS! I hate to surprise you and I haven’t seen the professional, boob-tube talking *ssholes make comment of this, but the INTEREST ONLY on the national debt for 2010 Is $413,954,825,362.17 For 2011 it should come in at about $460 BILLION. That means that to stand still we need to commit to about $460BILLION in savings in ONE YEAR. Imagine that for a moment…$460BILLION as ONLY INTEREST ON THE DEBT and these *ssholes are thumpin’ their chests about saving $91.7 BILLION. Only in American politics can falling behind be considered moving ahead! You just watch…the media will glorify this as a wonderful deal. A billion here and a billion there and pretty soon you’re talkin’ serious do-re-mi…don’t-cha-think? HUH!!

    Phase Two – WE should call this the “Bend Over and Spread ‘em” for me plan.
    So they give the Oba-Usurper a $1.2 TRILLION increase in the debt limit if that same amount of savings is made OR a balanced budget constitutional amendment is MERELY THREATENED by sending it to the states for ratification. NOT PASSED BY THE STATES mind…just sent to them. So they are issuing Obama a financial treading water in red ink FREE PASS, BUT in rerality the red ink is actually RISING! Is it just me or do these politicians think the citizens are as dumb as dirt? So much so that we cannot discern when we’re being groomed for a financial enema! I knew we were in trouble when Boehner first started that crying routine. Sh*t!

    The only trigger here is on the financial suicide hammer they’re cocking back now. How many want to bet me that the interest on the debt is NOT exempted from this figure and so a SUBSTANTIAL INCREASING debt interest will be subtracted from the savings “trigger” making it only around $700 billion that must be saved the first year. This is all just bullsh*t now for the President and Congress so they can indulge themselves in a very public, mutual back-slapping event. When they write the law in the dark of night…, THAT’S when they screw us good.