Over the weekend, we saw the details of the debt ceiling agreement reached by President Obama, Senate Majority Leader Harry Reid (D-Nevada) and House Speaker John Boehner (R-Ohio), and while it does avoid default, it may not avoid the downgrading of our AAA credit rating.
This bill will “cut” more spending than it will increase by raising the debt limit and on its face does not include any tax hikes. It will also “cap” spending and require a vote on a balanced budget amendment.
However, a closer look at this bill raises several concerns. First, the spending cuts are less in the beginning than in the latter years and, while there are caps, they can be changed by future Congresses.
The deal creates a “special” 12-member Congressional Committee to reduce the deficit by $1.4 trillion. If their recommendations are not enacted, then there will be across the board spending cuts, half of which come from defense spending and none from entitlement spending (the bill doesn’t reform social security at all). The Congressional Committee could and would likely still recommend an increase in taxes. Also, the Bush tax cuts that Obama extended expire at the end of this year, and there is a good chance that many of these won’t get extended.
This bill gives President Obama an immediate $400 billion debt ceiling increase, and he gets another $500 billion if Congress fails to pass a resolution of disapproval.
Finally, the bill does require a vote on a balanced budget amendment but unlike the earlier Boehner plan does not require that the amendment pass before the debt ceiling is increased.
The House passed this legislation on Monday by a vote of 269-161. The Senate passed it today by a vote of 74-26 and President Obama quickly signed it into law. Concerned Women for America will continue to follow the Committee’s recommendations and work with our friends on the Hill to pass a balanced budget amendment that ensures that Congress does not balance its budget on the backs of American families and businesses.