Monday, August 1, 2011

A Good Bargain for America

I know that the compromise struck between President Obama and Congressional Republicans will make a number of people unhappy. Tea Party members will be livid that the cuts aren't deeper and faster and that tax cuts will be on the table for the joint select committee. Liberals are livid that there are no revenue increases in day 1. But, make no mistake about it, this is a very good deal for the country.

The details of the deal are as follows:
* $917B of defined cuts over the course of the next 10 years. Basically these cuts are the cuts agreed to early on in the Biden deficit discussion and impact both Defense and Domestic Discretionary spending.
* $1.2T in cuts to be identified by a bi-partisan select committee comprised of 6 Democrats and 6 Republicans. The committee must report back recommendations by Thanksgiving and Congress must act by December or draconian across-the-board spending cuts will be imposed across the budget, including both entitlements and defense.

Would I have liked to see an upfront end to the Bush Tax Cuts? Absolutely.

Do I think we could have gone deeper, faster with cuts in Defense and wasteful spending such as agricultural subsidies? Sure.

Do I wish that we'd just passed Erskine-Bowles instead of appointing YET ANOTHER committee to find out what we already know we need to do? Of course.

But this ensures a significant reduction in the deficit and provides the ammunition to force a real compromise that addresses both entitlements and tax reform. And, most importantly, it ensures default. Everything is on the table as it should be. I am the most optimistic that I've been that we will address the deficit in a responsible way that I have been in over a decade.

Let's hope the thing passes.

The Senate should not be an issue as there is broad support for the deal. The House is a slight question mark with the progressive caucus and the tea party caucus both in firm opposition for precisely opposite reasons, the progressives because the cuts are too deep for their liking and there is no immediate tax changes and tea party members because they don't feel the cuts go deep enough and don't touch entitlements immediately.

This is the best possible deal given the circumstances. President Obama, Senator Minority Leader Mitch McConnell and House Speaker John Boehner deserve credit for finding common ground, even though it took way too long.

House voting begins in about 30-40 minutes. I predict passage. I don't believe Speaker Boehner would be holding the vote if he didn't think he could get to 216. I would guesstimate that the bill will get in the neighborhood of 240 votes, with bi-partisan support, although with more GOP support than Democratic support. It should sail through the Senate with 70+ votes.

I'll keep you posted.

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