Re: Default is looming
The Reid bill has been defeated in both the House and the Senate. Now, the real negotiations can begin. Just so everyone understands what's happened overall:
Boehner's first bill gets voted down in the House; they don't send it to the Senate. Instead, Boehner goes to work revising his initial piece of legislation.
Boehnor's revised bill (2nd attempt) passes the House, but gets tabled in the Senate meaning the Senate merely refused to bring the bill to the floor for a formal "up or down vote". They just refused to do anything with it other than set it aside.
Meanwhile, the Senate sends the Reid bill to the House for a vote. It gets defeated.
All party leadership meet once again at the White House where one side shows alot more willingness to compromise than they had before. Base on what I've been reading and hearing in news cycles, both sides appear to agree in principle to the following:
- raise the debt limit to atleast $2.5 trillion
- cut spending by atleast $3 trillion over 10 yrs
- cap discretionary spending for 10-yrs
- no tax hikes thru 2012 (
Translation: Bush tax cuts will expire and the tax code will be revised)
- establish 12-member deficit commission whose recommendations will take hold unless Congress reforms entitlements and appropriates bills accordingly over the next 10-yrs
Summary: The tabling of Boenher's 2nd bill in the Senate and the defeat of Reid's bill in the House creates conditions for both sides to embrace the framework for a compromise along the lines as outlined above. The debt limit will get raised and Congress will work harder to keep spending under control, and in the near future will work on tax and entitlement reforms.
Nobody outside of Obama is calling for tax hikes. Even he argued against them not long ago. Never let a crises go to waste though.
Clearly, some of you still don't get it. There's no way this country can reduce the deficit without cutting spending AND increasing taxes or at the very least eliminating tax loopholes. It's going to take 10 years just to pay off $2-3 trillion in debt! How much longer do you think it will take to pay off the remaining $11 trillion without raising revenue? And mind you, this is only public and privately held debt (mostly on investors, both foreign and domestic; all those short-term bonds aren't held by China alone. Social Security is tied to long-term bonds, but domestic investors buy alot of short-term bonds which have to be paid). Really think it through, folks. Our debt problem is ALOT larger than most people think!