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    Two-step program

    Two-step program

    Here’s the analysis by James Pethokoukoukis (via @irishspy):

    Now is not time to let the perfect be the enemy of the good. Neither the Reid budget plan nor the Boehner budget plan packs the fiscal wallop of Cut, Cap and Balance. But significant progress on cutting debt can still be made before the Aug. 2 (or is it Aug. 8 or 10 or …) debt ceiling deadline. And by that measure, the Boehner plan is not only far better than the Reid plan, it is a pretty darn good plan in and of itself. While both plans would cut some $1.2 trillion in discretionary spending over a decade, Reid would then close up shop until 2013. The only other major cuts would be to future defense spending that no one really expects to happen….

    Boehner, on the other hand, would keep the debt cutting process going and more likely result in substantive spending cuts of $3 trillion, nearly three times the Reid plan. (And if you tack on the Reid defense cuts, you suddenly have a $4 trillion plan, including interest savings. The raters would like that.) I don’t think spending hawks should fear the Boehner debt commission if it has real teeth and doesn’t create a trigger for higher taxes.

    What thinks you?

    I think there is upside in keeping the issue alive for the next year, in the framework where the only thing on the table is budget cuts.  I’d call it a single or a double, but not a strike out, with another appearance at the plate in about six months.

    Update: Via The Hill:

    In the closed-door meeting Tuesday, Cantor praised Boehner’s leadership and acknowledged that “the debt limit vote sucks.” But he told lawmakers that they had only three choices: allow the country to default on Aug. 2, pass a Senate bill that Boehner has denounced as “full of gimmicks” and a “blank check” for President Obama or support the GOP leadership and “call the president’s bluff.”

    Cantor “said to stop grumbling and whining and to come together as conservatives and rally behind the speaker and call the president’s bluff,” the Republican with knowledge of his remarks said.


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    Viator | July 26, 2011 at 11:16 am

    Senator Rand Paul was commenting this morning and pointed out that all these cuts are using a baseline that called for $9 trillion in increases over the next ten years. It is sometimes difficult to remember for us plain speaking folks that Washington, DC = Orwell. So whatever Boehner’s cuts add up to they are cuts on a $9 trillion dollar increase. If they equal $3 trillion, then they have cut an increase of $9 trillion to an increase of $6 trillion.

    Of course, the Democrat plan is far, far worse. But do not think these so called cut are cuts within the meaning of the English language.

      JayDick in reply to Viator. | July 26, 2011 at 1:21 pm

      You are correct. Most of the public does not realize that a cut is not a cut in Washington lingo but rather a reduction in the planned increase. Got that everyone? There will be a quiz on Friday.

      Aarradin in reply to Viator. | July 26, 2011 at 6:58 pm

      Fox interviewed Sen Paul and Gov Kasich (R) of Ohio back to back. By comparison, Kasich sounded like a Democrat. I was shocked at his ignorance on the issue and also shocked by his fearmongering.

    That’s one of the main reasons why the markets aren’t selling off. This isn’t D-Day on debt and most American corporations have already adapted their business models to build in reckless government policy.

    Neither deal will prevent a downgrade of US sovereign debt rating to AA and the chances of default are almost nil… for now.

    IMHO, both deals are bad deals but “the markets” are showing no signs of caring which deal goes through since neither the issues hampering capital investment in America and neither will create jobs. Kicking the can down the road is what markets have come to expect from our entrenched criminal class of elected weasels.

    One more thing, Reid’s plan is a complete cop-out by both parties since it takes the most important issue out of play next year. At least Boehner’s plan continues the torture as both parties try to gain political advantage over the crisis. We need to torture these guys until Boehner isn’t the only one crying in DC.

    Viator | July 26, 2011 at 11:49 am

    I am pretty sure I Rand Paul say +$9 trillion baseline as I was driving, but here he uses +$10 trillion as the baseline budget. In any case, as you are following the lies, spin and obfuscation in Washington remember any cuts are taken from an increase. $9 trillion or $10 trillion increase over ten years, take your pick.

    Here is what really ticks me off about Cantor’s statement:

    “they had only three choices: allow the country to default on Aug. 2,…”

    That is an outright lie which what makes this kabuki so exasperating. The Republicans are telling the same lies as the Dems and getting away with it.

    Also, Boehner refers to calming the “roiling” markets. What “roiling” markets? Only in “big tent DC” is there any roiling.

    The debt downgrade is a done deal. Get used to it. The biggest damage from this will fall on those AAA states that rely on transfer payments from the feds to balance their budgets. The “markets” down care about bloated governments taking a hit.

    If I were a congressman, I wouldn’t vote for either plan. Let’s call BOTH parties’ bluff on the phony default argument. We want a solution. SOLUTION.

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