Elements in the Debt Ceiling Agreement

Here is an outline of the debt ceiling agreement announced by President Obama tonight. 

A White House fact sheet distributed to reporters shortly after the president spoke laid down the specific elements of Sunday night's deal to raise the debt ceiling:

·        The president will be authorized to increase the debt limit by at least $2.1 trillion, eliminating the need for another increase until 2013.

·        The first tranche of cuts will come in at nearly $1 trillion. That includes savings of $350 billion from the Base Defense Budget, which will be trimmed based off a review of overall U.S. national security policy.

·        A bipartisan committee with enhanced procedural authority will be responsible for pinpointing $1.5 trillion in deficit reduction from both entitlements and tax reform, as well as other spending programs.

·        The committee will have to report out legislation by November 23, 2011.

·        Congress will be required to vote on Committee recommendations by December 23, 2011.

·        The trigger mechanism -- should the committee's recommendations not be acted upon -- will be mandatory spending cuts. Those cuts, which will begin in January 2013, will be split 50/50 between domestic and defense spending. Social Security and Medicare beneficiaries and "low-income programs" would be exempted from those cuts.

The fact sheet goes on to note that there is another enforcement mechanism that the president possesses.

"The Bush tax cuts expire as of 1/1/2013, the same date that the spending sequester [the trigger mechanism] would go into effect," the fact sheet reads. "These two events together will force balanced deficit reduction. Absent a balanced deal, it would enable the President to use his veto pen to ensure nearly $1 trillion in additional deficit reduction by not extending the high-income tax cuts."

-- Sam Stein, The Huffington Post

28th Amendment Email a Distraction

Since the congressional debate about health care reform in 2009, the following proposed amendment to the Constitution has circulated around the internet, nearly always with the suggestion that if you send this on to twenty friends and they do likewise that very soon it will be in every citizen’s hands and that our Senators and Representatives’ elite status days will be numbered because a 28^th amendment to the Constitution will be passed. If I’m not mistaken, the original proposal started making the rounds as a way to punish legislators who supported the health care reform that became legislation.

The email is being circulated now as the “Congressional Reform Act of 2011.”  I’ve received it several times in the past couple of weeks. Apart from the idea of it making us feel better in the midst of the current debt ceiling debacle, there are several reasons not to take it seriously. Here is the one I received today:

  

Congressional Reform Act of 2011 

1. Term Limits. 12 years only, one of the possible options below.

A. Two Six-year Senate terms

B. Six Two-year House terms

C. One Six-year Senate term and three Two-Year House terms

2. No Tenure / No Pension.

A Congressman collects a salary while in office and receives no pay when they are out of office. 

3. Congress (past, present & future) participates in Social Security. 

All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security system, and Congress participates with the American people. 

4. Congress can purchase their own retirement plan, just as all Americans do. 

5. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%. 

6. Congress loses their current health care system and participates in the same health care system as the American people.

7. Congress must equally abide by all laws they impose on the American people.

8. All contracts with past and present Congressmen are void effective 1/1/12. 

Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work. 

The American people did not make this contract with Congressmen. Congressmen made all these contracts for themselves. 

I suspect that this email is circulating now out of the frustration all of us feel about Congress’ inaction on solving the debt ceiling crisis.  Believe me, I am also frustrated and fear for what may happen to the nation, but I believe that circulating this email is a not helpful way to deal with our frustrations, and in fact is a distraction from the crisis we face.

Why?  First, I want no part of punishing all of Congress because of the debt ceiling debacle. We have this crisis because Republicans have found a way to force spending cuts in government that they could not get passed in the House or Senate. The debt ceiling crisis is a way to impose not only their economic but also their social agenda. As I have written elsewhere, the Democrats have many “sins” for which they will have to answer, but the debt ceiling crisis is not one of them. They have been insisting that the pain of cuts be shared. That's what I want them to do.

Second, and you who know me will understand, this email fails the identity test. There is no name or organization attached to the email. If the author(s) don’t have enough confidence in what they wrote to say who they are, what they write doesn’t deserve my attention.  (I apply this rule to ALL circular emails.)

Third, not only is this simply and “idea piece” and not proposed legislation that we can seriously consider, it is flawed by numerous mistakes of fact pointed out in this Snopes link, and, in my mind, others of poor judgment, sufficient to overshadow the couple of good ideas in it. 

On the issue of term limits, we may be able to mandate limited terms for members of Congress, but not congressional staffs and lobbyists. I know the power of incumbency, but it seems to me that to have limited terms for our elected representatives simply makes them more dependent than they already are on those who don't have them.

I'm not sure I know what number eight means. Does it mean that retired legislators cannot serve as lobbyists. Does it mean they can't serve in the judicial or executive branches? 

I like the idea of Congress not being able to give themselves pay raises. Having them tied to increases in Social Security wouldn't be a bad idea.Please check out the Snopes link to see the inaccuracies in this email. Then, consider sending it back to the people who forwarded it to you.  

Now, it's back to waiting to see what happens in Washington.  

-  Milo

Debt Ceiling Debacle - Death Watch?

Connie was on the other side of the room when I said I was going to post a note on "Debt Watch." She didn't quite hear and said "Death Watch"? Not hearing what I did say, she nonetheless may have it right. 

We are six days away from uncharted economic waters that most Republican and Democratic legislators, as well as most economists, agree that we must not test. Forget Michele Bachmann and other "Know Nothings"! I need not list sources for the broad consensus that a genuine crisis lies ahead if the debt ceiling is not raised and serious steps are not taken to reduce the national debt. 

Tonight, I was reminded of what I learned once in high school Civics: money bills must start in the House. (Article 1, Sec. 7) Speaker Boehner is having a difficult (impossible?) time getting a bill that will pass the House and go on to the Senate, where with any such bill's draconian cuts in programs and services is doomed to fail. I understand that if the House passed a bill, the Senate could amend it and it would go to a conference committee. (Please correct me if I've got this wrong.) 

The bottom line is that we are moving perilously close to default. I doubt that the friend in financial management who told me a week ago that this whole controversy was "much ado about nothing," would say the same thing tonight.

In the great scheme of things, there are many "sins" for which the Democrats have to answer, but in my view this debacle is not one of them. The Democratic leadership has insisted that there be no cuts without the wealthiest sharing the pain. The Republicans, cowering from the threats of their Tea Party members, refuse to ask the wealthy do anything but continue to enjoy their tax breaks and loopholes. 

I have written my Representative and Speaker Boehner, who insisted that he was the Speaker for all Americans. I have also made calls.

Last night, when I asked what more we should do, one friend suggested I take a vacation (he was probably weary of hearing from me about this). Another friend suggested it was time to leave it to God. My response was: 

"I have a suspicion that God might say, 'You got yourselves into this mess. You'd better work your tails off to get out of it.'"

 To that end, tomorrow I will begin another round of letters and phone calls.

 What will you do?

- Milo