The Last Debt Ceiling Hurdle


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Meanwhile, the three main ratings agencies reminded the nation that even the most stringent results coming from the committee’s deliberations may not be enough. Moody’s Investors Services stated the country would “probably” retain its AAA credit rating for now, but that the outlook for the future was “negative.” Fitch Ratings said its AAA rating depended on debt reaching a ”more sustainable level,” while Standard & Poor’s reiterated its contention that $4 trillion must be cut from future budget deficits, or America’s rating will probably be lowered to AA. Guy LeBas, chief fixed income strategist at Janney Montgomery Scott, explained why. ”The details [of the deal] don’t look as pretty as the headlines,” he said. LeBas also noted that the agencies will be less than thrilled with the idea that most of the spending cuts won’t kick in until 2013.

Yet some analysts see a silver lining in a lowered credit rating, noting that the higher interest rates resulting from a downgrade to AA would make it more difficult to borrow money. Perhaps it would, at least for consumers. But it might also make interest payments on existing debt far more onerous.

As for the economy itself, yesterday’s news was hardly comforting. U.S. manufacturers had their weakest growth in two years, and MSNBC contended that we are already entering a double dip recession. One suspects millions of Americans don’t believe we ever recovered enough to make the distinction. Either way, good news, like jobs, is in short supply.

The Senate is expected to vote on the plan at noon today. While it is expected to pass, a certain level of bitterness exists in that congressional chamber as well. “I cannot in good conscience support this deal. Simply stated, it locks us into more debt, bigger government and most devastating of all, a weakened defense infrastructure at a time when we face growing threats,” said Lindsey Graham (R-SC).  South Carolina’s other senator was equally upset. “I’m not going to tell Americans that we’re doing everything when we’re not,” said Republican Jim DeMint. “We’re planning on adding another $10 trillion in debt.”

Certainly for politicians (especially those seeking re-election), to say they are unhappy with a deal that didn’t completely accrue to their side’s interests, provides far better cover than saying they had to concede on one point or another. Yet aside from the obvious political ambition that always necessitates framing any compromise in terms of “winners” and “losers,” there is a far bigger problem brewing in Washington, D.C. There are always underlying ideological limitations from which every compromise proceeds, but in the hyper-partisanship that currently dominates the nation’s capital, those limitations are becoming more and more constricting. Such constriction leads to frustration, frustration to invective.

On a day where that invective reached fever pitch, it was a pleasure to see Gabrielle Giffords in the House. One would like to think her appearance might give pause to both Joe Biden and Mike Doyle. Perhaps they might even take her statement ”that crossing the aisle for the good of the American people is more important than party politics” to heart. There is a monumental amount of work to do to get this country back on track, and there will be many moments of ideological passion along the way. But passion needn’t be accompanied by puerility.

Democrats and Republicans don’t have to get along. But they can behave like grownups. That alone would be a relief to millions of Americans.

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  • JohnC

    Great article…

  • davarino

    Good luck with congressmen acting like grownups. If that were possible it would have happened a long time ago. Grownups make hard choices and get the job done for the good of a principal (ie. United States), not the players and the next door neighbor and self. The voters also have to decide if they want children to continue leading them or if they want adults.

    Its amazing to me how the dems believe this is the wrong time to cut spending. When is a good time to cut spending. When times are good they will argue against spending cuts because there is lots of money to throw around. So when is a good time to cut spending? When the government goes broke? Then nobody gets anything.

  • StephenD

    I just am sick and tired of the same old lame arguments of class warfare. How the "wealthiest and Corporate Jet owners should have to pay their fair share."
    Who is against fairness? Fairness is a measurable issue. If the "Millionaire" pays 22% of his income and we on the other end pay 22% of ours, how is that not fair? The facts are that 49% of Americans don't pay anything into the system. Listen, a flat consumer based tax is the only way to go. Otherwise, I would suggest that only if you pay taxes should you have a say in how taxes are spent ~ which is only fair. Therefore, the voter base for the big spenders would dry up. How soon would they be ready and willing to cut spending then?

  • tagalog

    I wish it were actually true that our legislators in Congress thought of the voters (or a bloc of them) as terrorists. Then they'd be apprehensive about the voters. As things now stand, they know the right wing is full of hot air, a paper tiger, who can easily be circumvented.

    Does anyone agree with me that it's about a 99.9% likelihood that when the time comes to pull those "triggers" the Democrats will refuse to make the spending cuts? Why wouldn't they? Half of the reduction in spending will come from the Defense Department, their favorite bugaboo. That means a guaranteed end to the Afghan and Iraq wars. Of course they'll refuse to agree to cuts in spending, and they know that when the time comes to pull that trigger the Republicans won't have the courage to make cuts in entitlement programs, where the cuts need to be made.

    So the Dems get the biggest increase in the debt ceiling in history, an end to the wars we're fighting, no cuts in entitlement programs, and Obama free from economic flak for the next year and a half. The Repubs get the same old set of empty promises to cut spending some time in the future. The Dems even get to isolate the no tax hike issue, something that is controversial among the general public.

  • alexander

    Foreign aid did NOT stopped…Do we have too much money?

  • alexander

    Foreign aid did NOT stop…Do we have too much money?

  • Steve Chavez

    Tea Party VS. the Communist Party.

    The Democrat Party is so far to the left that they are now equals to the Communist Party USA!

    PLEASE GO TO CPUSA.ORG AND PWW.ORG, or People's World, and you will see that their articles written by hard-core and die-hard Communists are the same as the Democrat talking points. The only issue is, who is following who. I believe, it is the COMMUNIST PARTY USA LEADING THE DEMOCRAT PARTY!

    The Left is demonizing their main enemy and threat to their stranglehold on America: The Tea Party. If repeated enough, the gullible and naive listen to them which worked when Obama's Slogan Department repeated his slogans in a brainwashing technique, ala a CULT!

    Please go to CPUSA.ORG and link onto their Communist Youth League and especially People's World and you will see the reasons the Democrat Party and the Communist Party are really one in the same!

  • LindaRivera

    An inferior health care plan that no one wants and CANNOT afford to pay. The threat to jail and/or fine those who don't purchase the government enforced plan.

    Massive spending as if there is no tomorrow. Fighting wars we have no money for. Massive borrowing. The Massive giving away of Billions of dollars every year to other countries, including the oil-wealthy Middle East, Hamas-controlled Gaza and the Palestinian Authority organization who fill their war chests, build mansions and laugh all the way to the bank with free infidel money. Whilst in America, homeless shelters are filled to capacity; tent cities have sprung up all over the U.S. filled with desperate, jobless, homeless, NEGLECTED Americans.

    Massive debt. The massive printing of paper money out of thin air to DELIBERATELY create out-of-control inflation. There is no question that the total DESTRUCTION of America's economy is planned. The results will be horrifying. In the once wealthy and great nation of America, millions of Americans will become destitute, hungry and homeless with no money or resources to help them.

  • LindaRivera

    Organic, non-gmo avocado, fruit and nut trees and berries must be planted in all of our nation’s cities’ and towns’ parks to help the many millions of Americans who will soon be in a desperate struggle to survive.

    Watch it. And weep for our great nation and people:

    FALL Of The Republic – The Presidency Of Barack H Obama – The Full Movie HQ http://www.youtube.com/watch?v=F8LPNRI_6T8&fe

  • LindaRivera

    SCARY……

    Is this REALLY our AMERICA??????

    Know the TRUTH about the Government Health Care Bill H.R.3200 – Key Points http://www.youtube.com/watch?v=HcBaSP31Be8

    • Fred Dawes

      It has not been the real America for 70 years ask who really was the winner of ww2? it is not what you think.

  • Texasron

    The congress is planning to recess because they "WORKED SO HARD" these last few weeks. Well, they need to stay in Washington and find where they can reduce spending. They do not need a recess, they need to solve the country's job problem!

    • Fred Dawes

      You may add the job problem can be helped by just removing any and all talk about it that will happen soon! obama will just tell us each day the we have 100 percent employment and all the evil people have been put in camps for Reeducation and HELP For the real future to come.

  • http://mypage.direct.ca/l/lbouchar/ SeaMystic

    The core clause that is creating the Nat’l Debt Crisis around the World including the U.S., is in a clause of the Bank of England since 1694, and part of International finance, this has now come to roost.

    Check: http://mypage.direct.ca/l/lbouchar/

    Particularly chapter 2 & 3. Titled, “Guardians of Democracy, a Mystical View.”

    The Nat’l Debt was created as a Debt in Perpetuity, ever expanding through the noted Principle of Issuance with Compound Interest, for Government needs, through selected Bank.

    The Sword of Damocles, may be avoided this time, but it is inevitable, unless the enslaving clause is changed.

    Humanities present Enslavement , is not through Chains, but Compound Interest, with intent.

  • mrbean

    The only difference between a common street thug and the present liberals in congress is that the street thug does not pretend to be moral while he is looting your wealth by force nor does he have the gall to claim the he is doing it for your benefit.

    • Fred Dawes

      You can see

  • Fred Dawes

    Its all about you and you will become a state tax slave, and each of our political leaders are nothing but tools for the banking system to be used against us all.

  • Ellman

    You cannot ask Socialists and Conservatives to 'get along'. Ideologically they are at completely opposite philosophical positions, one advocating 'cradle-to-grave' dependency and the other 'individual freedom, property rights, and free enterprise'. However, I wish Conservatives would be better at articulating and supporting their positions better. As for the socialists they will continue to cite 'racism', 'bigotry', Tea Party 'terrorism', 'hatred', etc. They cannot articulate their philosophical foundation because most Americans still don't accept Marxism as the answer to our problems. In fact, we look at Europe and say 'Why would we want that mess over here?'

  • TheBigFig

    Anytime the muslim lawn jockey opens his mouth its a lie!z

  • steven l

    Lets ideology on both sides knock each other off.
    I suggest that the Republicans slash 2 Tri. $ of democrats budget and in exchange the Democrats do the same, No questions asks and 4 Tri. will be eliminated from the 14 Tri. over a 10 years period.
    Both side cheat for much more than that anyway.

  • ObamaYoMoma

    If defense ends up getting cut, which is what is probably going to happen since Republican and Dhimmicrats will cancel each other out in the committee, I’ll never vote for another Republican for the rest of my life.

    This deal is the biggest joke. It’s phony baloney smoke and mirrors. The RINO/Neo-Con/Blue Blood/Establishment Republicans, i.e. the Left, cut the legs out from under the tea partiers. Hence, they are as much an enemie as BHO.

  • tagalog

    I guess the Republicans aren't as good as the Democrats are at never letting a good crisis go to waste, and then turning it into a propaganda victory.

    • Jim_C

      But they are still far better at controlling the terms of debate. The debt ceiling? Pretty hard to get jazzed about then when it was raised 798 times during the last administration to no peeps of outrage–yet it was front and center all this time as if A. people really gave a sht about it, B. It "might not be raised!" Anyone who knew anything knew it would be.

      And if you think democrats are happy about this deal, I invite you to check any liberal-leaning website. They are every bit as disgusted.

      • tagalog

        Those disgusted Democrats, assuming they exist, just haven't grasped yet what a strategic victory they won with this debt ceiling deal.

  • TexExpatriate

    The only surpise to me here was that Paul Ryan, a sensible and genuine American, voted for this bad, traitorous bill. The rest of those who voted for it are spineless quislings. Every thinking person knew that default was never in the cards. I'm proud to say my Congressman, Todd Rokita, voted against it.