The Trillion-Dollar Debt Ceiling Deal: Class Warfare in
Action 
In These Times Monday Aug 1, 2011 
By Jack Rasmus

http://www.inthesetimes.com/working/entry/11769/the_1_trillion_debt_ceiling_debt/

Senate Majority Leader Harry Reid (D-NV) speaks to the
media after a closed door meeting with Senate Democrats
and Vice President Joseph Biden, at the U.S. Capitol,
on August 1, 2011. Congress is due to vote today on a
agreement to extend the federal debt limit while
enacting spending cuts.   (Photo by Mark Wilson/Getty
Images)

Last night, President Obama and Senate Majority and
Minority leaders Harry Reid and Mitch McConnell
announced they had reached an agreement on cutting $1
trillion in spending in exchange for raising the debt
ceiling. House Speaker John Boehner indicated he was
also in agreement, subject to voting to take place in
the House on Monday.

This latest "deal" is essentially the same that was
reached by Harry Reid in the Senate on July 29 and
Boehner in the House on July 27, with two major
changes--one favored by the Republicans and another by
Obama. These two changes were then 'traded off' this
weekend, bringing the parties to a deal.

Boehner and Reid all but came to an agreement last
Friday, July 29. Their respective proposals called for
$917 to $927 billion in spending cuts, only $10 billion
apart. Both proposals contained no reference to tax
loophole closings. The tax hike idea was given up by
Obama and the Democrats early last week, bringing the
Democrats in line with the Republican position on
spending vs. tax hikes.

The only substantive difference as of July 29 between
the two was that Reid also proposed $1.044 trillion in
additional cuts in defense spending, as well as a
measure that prohibited a re-opening of the debt
ceiling issue before the  November 2012 elections.

Sunday's Boehner-Reid agreement effectively drops
explicit cuts in defense, another Republican position
all along. Reid's defense cuts are now replaced with
'triggers' in defense spending reduction. The
'triggers' concept has been a maneuver used by Congress
on occasion in the past. It is designed to let one
party save face, allowing it to appear that their
provision is retained in the bill, when in reality it
likely won't be implemented.

With defense spending cuts taken effectively 'off the
table' this weekend, the only remaining substantive
issue was whether the debt ceiling would be allowed to
come up as an issue before the 2012 elections.
Republicans now agree it will not.

This Republican shift signals that Reid's previously
proposed $1 trillion additional cuts in defense
appears, in retrospect, to have been a 'trading item'--a
tactical maneuver designed to get the Republicans to
agree not to revisit the debt ceiling issue again
before the coming 2012 elections.

But the Republican leaders in the House and Senate
don't need a debt ceiling debate again to get further
cuts. The 2012 budget deadline of October 1 will do
just as well for a threat to shut down the government.

So, in summary, it appears the deal just negotiated
means both parties agree on cutting $1 trillion in
spending, only with no tax hikes. The Republicans will
shift to the 2012 budget deadline for a new hammer to
extract extra spending cuts. Defense will remain
effectively untouched. And, in exchange for $1 trillion
in cuts and no tax hikes and leaving defense spending
untouched, Obama gets an agreement not to raise the
debt ceiling issue again before his next election.

But don't think that's the end of the story. It's just
the beginning.

The bigger attack on Social Security, Medicare,
Medicaid is still to come. The next round in what
amounts to class economic warfare via legislation is
the 2012 budget negotiations, which are supposed to
conclude by September 23. Republicans will get another
bite of the apple in spending cuts at that time. And
Obama and the Democrats will likely cave in to those
demands yet again, as they have repeatedly over the
past year.

But the even bigger bite will come as a result of
another provision in today's agreement: the creation of
a so-called 'Bipartisan Commission' to reduce the debt
and deficits by even greater magnitudes. That
Commission will make further major proposals for cuts
by November of this year, to be voted on by Congress
before the year's end.

Following Senators Reid and McConnell, President Obama
spoke on national TV on Sunday night to endorse the
tentative Boehner-Reid agreement and to announce the
"Bi-Partisan Debt Reduction Commission." In his brief
comments he employed an important phrase that TV
commentators mostly overlooked. He said, "The
Commission's proposals will be submitted for an up or
down vote only" by members of Congress.

That means some small group--no doubt appointed by him
or congressional leaders--will now decide solely between
themselves the composition and magnitude of cuts to
Medicare, Social Security, Medicaid, how much tax
loopholes will be closed, and how much Defense spending
will be cut. The rest of Congress will then be limited
to voting 'yea' or 'nay' and that's it.

The conservative composition of such recently appointed
commissions is well known. There was the Simpson-Bowles
deficit commission appointed by Obama in 2009 that was
lopsidedly conservative. And Obama's commission to
recommend Health Care legislation that was composed of
mostly conservative Republican and Democrats. The
forthcoming 'Bipartisan Commission' will almost
certainly assume the same conservative-leaning
composition. We can expect $2 in cuts in Medicare and
Social Security for every $1 in tax loophole closing
and Defense spending reductions...if we're lucky.

This deal of the past weekend to raise the debt ceiling
in exchange for $1 trillion in spending cuts--with no
tax hikes or defense cuts--clearly shows that
politicians in Washington are concerned first and
foremost with their re-elections. Democrats don't want
to be confronted with another debt ceiling debacle
during their re-election campaign. Both Republicans and
Democrats are, furthermore, intent on protecting their
Defense industry friends, and on ensuring their
corporate campaign contributors don't have to pay their
fair share in taxes. The rest of America gets to pay
the bills and pay the price.

___________________________________________

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