Latest Deal will Extend Debt Ceiling Past 2012 Elections

The powerpoint that Speaker Boehner released yesterday evening will kick the can of debt further down the road and it assures President Obama and the other big spenders in Congress an easier path to re-election in 2012.  Let's look at this "Two Step Approach" in more depth.

First, the deal claims to cut government spending more than it increases the debt limit.  This is only true if you agree to equate seven months of debt increase to ten years of spending cuts.  Why not compare seven months to seven months, or ten years to ten years?  This political slight of hand is meant to make us feel good while Washington continues business as usual. 

Second, the agreement claims to control future spending by using the same control mechanism used in the 1997 Balanced Budget agreement.  Well, if this spending control mechanism was so good, why are we in an even bigger mess 14 years later?  It doesn't sound successful to me.  It will fail again because we can't control spending of a future Congress unless we pass a tough balanced budget amendment.

What about a balanced budget amendment (BBA)?  The current "compromise" requires Congress to vote up or down on a BBA between Oct 1 and Dec 31 of this year.  If a BBA is passed, Obama receives an automatic $1.5 trillion debt ceiling increase on top of the initial $900 billion which will put the debt issue well past the November 2012 elections.  This mechanism absolves Congress and the President from being held accountable for the debt increases or their spending decisions.  Since the language of the BBA is not specified, a weak BBA will likely emerge just to trigger this debt limit increase.

The "matching" spending cuts for the second debt ceiling increase will be tied to FY 2013-2021, again designed to postpone any belt-tightening past the 2012 elections so as to limit any political backlash.  Those cuts will be to our military and to medicare providers.  Why medicare providers?  My guess is that it has to do with preserving the funding that would otherwise have to be cut from Obamacare.  The defense cuts will placate Obama's base making him a formidable opponent come next November.  These cuts are more posturing but our fiscal trainwreck is not adequately addressed.

It looks like this deal will ultimately pass but the tea party can take great pride that this debt ceiling increase sparked a national debate about our debt and spending problems.  This would not have occurred were it not for the strength of our movement.  However we must realize too that we need to change business-as-usual in DC.  Our children are still subject to the crushing debt that political spending addicts keep piling on us.  Our remedy must be to elect principled men and women who share our values and will courageously shepherd our nation to financial discipline once again.