Thursday, October 13, 2011

Debt ceiling deal and the 2012 election

Right now Republicans and the media are all caught up in the question of "who else but Romney," the poutragers can only talk about OWS, and President Obama is refusing to take "no" for an answer on creating jobs.

But I suspect that the conversation will be changing soon because some deadlines from the debt ceiling deal are about to hit next month. And if things go as expected, it will all create some interesting fodder for the 2012 election year.

As a reminder, a Super Committee of Senators and Representatives from both parties was chosen to find $1.2 trillion in deficit reduction. And once again, while Democrats are insisting on a balanced approach of spending cuts and tax increases, Republicans have refused to consider any of the later. But the truth is, they haven't even gotten to that yet because the committee can't seem to agree on a baseline budget from which to start negotiations.

With only weeks left before the bipartisan panel hits the congressionally mandated deadline for reporting its recommendations, lawmakers have yet to resolve the thorny question of what kind of baseline to use to score a deal, according to sources familiar with the talks.

The question is critical, because without agreement on the benchmark, it will be virtually impossible to agree on a package that could be moved to the Senate and House for final approval. The baseline will be the measure that the supercommittee will use to judge whether it has reached its mandate of at least $1.2 trillion in savings, set by the deficit deal this summer. If the panel deadlocks, deep spending cuts to defense and non-defense programs would be triggered.

That first deadline hits on November 23rd (in six weeks) when the committee is expected to have voted on their plan. The second deadline comes on December 23rd, which is the deadline for both houses of Congress to have voted on the bill.

Perhaps some miracle will take place and those things will actually happen. But I suspect any reasonable person would doubt that possibility given our recent political dynamics. That means that the triggers outlined in the debt ceiling deal would be set to kick in as of January 2013 and the current Congress will have a year (2012) to decide what to do about that.

Keep in mind that the triggers cut HUGE amounts from defense and will also affect Medicare providers (Medicare beneficiaries are protected). Also protected are Social Security, Medicaid, unemployment insurance, programs for low-income families, and civilian and military retirement. In addition, President Obama has promised to let the Bush tax cuts expire as of January 2013 if no deal is reached.

One other thing that will be interesting to watch. If you remember, the deal also included a split in raising the debt ceiling amount. Sometime in Feb/March of 2012 it will have to be raised again. The deal allows President Obama to do that. When he does, Congress has 15 days to vote a "resolution of disapproval." But the President can veto it - requiring a 2/3 majority to override. I'm sure the tea partiers will require Republicans to do this and voters will once again see them involved in meaningless charades.

Then the big whopper. Sometime in Fall/Winter 2012 (just about the time of the election), the debt ceiling will need to be raised again. Hostage anyone? Or will the whole issue go quietly back into the night where its always been?

As I see it, 2012 will be all about facing the reality that Congress failed to come up with a deficit reduction plan and Republicans will be forced to try to pass legislation to stop cuts to defense and make a case for why the Bush tax cuts for the wealthy should be extended. And tea partiers will have two occasions to push Republicans into doing something silly again.

At some point in 2012, Republicans will have decided on a nominee for President and I suspect that person will have to take a position not only on the debt ceiling deal itself (which was approved by the Republican leadership in the House and Senate), but what s/he would do about the results.

So hang on to your hats folks. That's what I see coming down the pike in terms of issues for the 2012 election. Do you really suppose this is what Speaker Boehner meant when he said he got 98% of what he wanted?

2 comments:

  1. And to think that the "professional left" complained constantly that Obama "sold us out". It's amazing to watch his ability to think long term while the political class talks like 2nd graders when it comes to political gamesmanship.

    Remember Boehner proudly thumping his chest that he got "98%" of what he wanted out of the debt deal this summer? Does anyone now seriously still believe that Obama didn't outsmart those Republican punks in Congress, yet again?

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  2. adjouir - we'll have to wait and see how all of this plays out. But I believe Speaker Boehner bought himself one humongous headache in 2012 with his bow to the hostage shenanigans of the tea partiers. I'm also pretty confident that he'll go down in history as one of the most ineffective Speakers to ever have that job.

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