COMMENTARY | After a long series of back-and-forth, on-again off-again debt ceiling debates, a deal may have been reached by Republicans and Democrats. Details are still very sketchy, but are starting to come to light. On the verge of an unprecedented default, congressional leaders are pushing hard to get the new deal through the House and the Senate. President Obama has also been making his case on TV, Twitter, and in a video message to Democrats. The bottom line for leaders is that this deal must pass now, because time is running out.
So, what's in the new deal? For a start, no balanced budget amendment, according to The Associated Press. Also, no tax increases. The Republicans and Democrats had to put aside these two major sticking points in order to strike a deal. Neither side is incredibly happy with the compromise plan, but then again that's what usually happens in a compromise.
It includes a two-step increase in the debt ceiling that will last through 2012, avoiding a much larger debate in the middle of an election year. That was a key sticking point for the president, and he was able to get that included in the deal. It also protects Pell Grants and other "vital investments" to help the economy grow. It is still up in the air if it does enough to protect the economy.
There are still people who will not support the bill. Presidential candidate Michele Bachmann has said that someone has to say no. She is the head of the Tea Party Caucus, so it comes as no surprise that she has said no to the deal. The Tea Party has been seemingly unaware, or possibly uncaring, of the dangers of a U.S. default. Some progressives say the deal does more damage than good. Both sides have dissenters, but leaders are hoping to get enough support to finally move past the debt ceiling. Vice President Joe Biden has said it is time to move on to jobs. The suffering economy seemed to have taken a back seat to political antics, but it is hard to say if the economy will be helped from this newest agreement.
Don't expect this deal to turn around a sagging economy. Actually, you can expect the opposite. Economists predict that the cuts from the federal government are likely to cause higher unemployment than we would have seen without the cuts, reports The New York Times. This comes after employment slowed due to state and local government cuts. While things like Pell Grants were protected, it is hard to say what the cuts will do to the economy.
As the House considers the bill now and the Senate is supposed to vote tomorrow, one can only hope that the debt ceiling crisis is over. If this plan does not pass, we may see a last-minute use of the 14th Amendment by the president. One can only hope the U.S. Congress will finally get something done.
Andrew Taylor, "Debt and spending deal picks up momentum in Senate", AP via Yahoo! News.
"Press Briefing by Press Secretary Jay Carney, 8/1/2011", White House
Binyamin Appelbaum and Catherine Rampell, "Economists warn cuts to federal spending ill-timed", NYT on MSNBC.com
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