As former President George W. Bush would say, “sounds to me like fuzzy math” because as reported in The Tacoma News Tribune and Associated Press on Tuesday August 2, 2011, the agreement between President Barack Obama and Congress to avoid defaulting on its fiduciary obligations to pay on its debt, averted, at least for the moment, a government shutdown and sending America further into a steeper economic recession, as well as panicking financial markets worldwide. The thing is though, was this really good and responsible legislation or just another case of passing the buck or kicking the can down the road for the next administration?
The government “debt-reduction” Plan:
1. To raise the current $14.3 trillion ceiling by an additional $900 billion, then between $1.2 trillion to $1.5 trillion.
2. A special joint congressional committee is to come up with “new” deficit-reduction measures by Thanksgiving and Congress [The Senate] must vote on by year’s end. They are required to write a bill for reducing deficits [government spending] over the next ten years by another $1.5 trillion, but how does that make any sense when government spending exceeds $3.6 trillion every year [#4b]? The committee could change entitlement programs as Medicare, Social Security, and amend the existing tax code. If they did want to make such changes, that would seem to go against previous statements by the president to protect Social Security and Medicare.
3. The combined [$14.3T + $2.4T] $16.7 trillion increase should be enough to fund government operations and pay its debt through the 2012 election without the President and Congress needing to go through this process again.
4. According to the Congressional Budget Office [CBO] the $900 billion in cuts to federal agency budgets will be phased in over a ten year period, while for the next year alone the cuts would “only” amount to $21 billion, and how is that going to make a difference when government spending will exceed $3.6 trillion [FORMULA: $3.6T-$21.0B/$3.6T=5.84%]?
5. There were no “specifics” on which non-defense programs will be spared besides SSI, low income [HUD and others??] and Medicare.
6. The government is cutting funding in infrastructure projects [parks, roads, bridges, highways]; the very areas that President Obama said would generate thousands of jobs for Americans. There have also been cuts to educational programs [Pell Grants and loans], which again, President Obama guaranteed that every American student who wanted a college education and could not afford one would get one, as it would make us more competitive globally; especially funding areas in such courses as Science, Math and Engineering.
7. The one sticky point is President Obama wants to tax corporations and wealthy individuals while Republicans don’t want this to be part of any tax reform.
If one looks at the numbers it seems that this so-called “New Deal” is nothing more than an “old” cop-out and at least three things it is in reality tailored to do: (1) appease nervous [jittery] major foreign government investors not to start dumping trillions of dollars in T-Bills, (2) pass the buck to another ‘special’ congressional panel to come up with a ‘real’ solution because nobody else has or can, (3) and to postpone any significant legislation until after the 2012 Election, when possibly a new administration will have all of this mess to deal with that is leftover from “OBAMAMERICA.”
Robert Randle
776 Commerce St. #B-11
Tacoma, WA 98402
August 2, 2011
robertrandle51@yahoo.com
