As the deadline to resolve the debt ceiling problem moves closer (August 2nd to be exact), many plans have been developed to try and find a solution. The issue is, are any of them actually making any changes?
My most recent post was about the hybrid which is a joint proposal being proposed by Senate Minority Leader Mitch McConnell (R) and Senate Majority Leader Harry Reid (D). This plan would mean less cuts and no tax increase, the cuts are not specified and decisions do not have to be made until after the 2012 election. Today, an article was posted on CNN about the plan’s development. Currently, the plan will allow President Obama to raise the debt ceiling by $2.5 trillion without the raise actually being allowed by Congress. According to the fallback plan, Obama will be allowed to raise the debt ceiling but it will have to be approved in 3 segments (one $7 billion raise and two $9 billion raises). Obama would have to submit proposed cuts with each debt ceiling raise request, the loop-hole here is that Obama is able to veto Congress if they decide to not pass the increase. Along with each request, Obama will have to submit a list of proposed financial cuts. These cuts are only proposals and will not have to be enacted for the debt ceiling raise to be approved. This plan is now gaining some popularity among Congress members.
My main concern with this plan is that nothing is being solved, we still don’t know where the money is coming from to take care of our growing debt. Granted, we won’t be defaulting on our loans and debt but that seems to be the only perk. This seems to be just another example of politicians being politicians. Since no official tax raises or financial cuts will be made, no one risks upsetting their constituents…until 2012. Congress members have been arguing for months about where the money should come from; Republicans don’t want increased taxes and Democrats don’t want a ton of spending cuts. This plan doesn’t actually solve anything, it simply pushes back the time line until tough decisions and compromises need to be made. It’s time for Congress to step up and make a decision.
The blog article More Debt Talks... No Decision by Ashley Sorvillo on how there's no progress on the debt talks with the deadline nearing is similar to my own argument in many ways.
ReplyDeleteAshley Sorvillo's article provided me with some interesting information on how the debt talks are going as of late. The posting made by Ashley Sorvillo discuses on how with the debt talks stalling and time running out. President Obama would be able to raise the nations debt limit without the consent of Congress. This is some intriguing news to me and it concerns me a great deal as it does to Ashley Sorvillo.
Ashley Sorvillo's in her article says that for President Obama to be able to raise our national debt ceiling he would need to just submit a proposal of suggested cuts. Though that may lead to a plan later on the future it doesn't help with the situation we face now because like Ashley Sorvillo discussed we wouldn't know where the money will be coming from. The money may be coming from new taxes or cuts to federal programs we don't know; it may be just the government printing more money which would lead to a lower exchange rate between the other major currencies in the world.
Ashley Sorvillo suggests that this is just a delay tactic because we're running out of time now and both parties see no compromise in sight. I agree that it's true that its a delay tactic but a necessary one at that because if we fail to do a least something about our debt limit then we're going to be in worst trouble than we're in now.