Political Animal


August 01, 2011 8:00 AM Don’t call it a compromise

By Steve Benen

Perhaps this is just semantics, but I’ve seen several reports on the debt-ceiling framework describe it as a “compromise” between Republicans and Democrats. That’s far too generous a term. Is this a deal? Sure. Is it an agreement? Absolutely. Can it fairly be characterized as a “compromise”? Not at all.

Republicans threatened to crash the economy, on purpose, unless a series of radical demands were met. Democrats made an effort to lessen those demands and make them less painful than intended. The result, not surprisingly, is rather ugly, which is to be expected.

The debt-reduction framework isn’t a compromise; it’s a ransom. If one were to draw up two lists — one with all the concessions Democrats made, the other with the concessions the GOP made — the one-sided image would be striking. Of course, that’s what happens when one party has a gun to the head of its hostage — in this case, the nation and its economy — and the other party wants to prevent their rivals from pulling the trigger.

With 40 hours and some contentious votes left to go, what are we left with? The White House fact sheet is pretty detailed and worth reviewing, but here’s the long and the short of it:

According to officials in both parties, the deal would raise the debt limit in two stages. The first increase would total $900 billion, with the Treasury gaining access to $400 billion in additional borrowing authority immediately. The other $500 billion would come later this fall — unless two-thirds of the members of both chambers of Congress objected — permitting the Treas­ury to pay the bills through early next year.

The second increase would raise the debt limit by at least $1.2 trillion, also subject to a resolution of congressional disapproval. That process would place the entire burden for a debt-limit increase on the White House, because Congress is likely to vote to disapprove the request, forcing Obama to veto it. But the process virtually guarantees that the debt limit will rise, because Republicans lack the votes in the Senate to override Obama’s veto.

The agreement would also cut agency spending by roughly $900 billion over the next decade and create a new legislative committee to come up with at least $1.2 trillion in additional savings by the end of this year.

To clarify an important point, the debt ceiling increases that cover us through the end of next year will occur in phases, but there will only be one vote.

As for the bipartisan panel — some have been calling it a “Super Congress” — its members will be tasked with tackling tax and entitlement “reform,” with the goal of saving $1.2 trillion. Democrats will fight to ensure some of that total includes new revenue; Republicans will fight for the opposite.

If this commission fails to reach an agreement, a “trigger” kicks in: across-the-board cuts. The idea is to create an incentive for lawmakers on the bipartisan panel to succeed, since they won’t like the triggered consequences. In this case, half of the cuts would come from defense (presumably a goal Republicans would want to avoid), while the other half would come from domestic spending (which Dems would want to prevent).

If you’re looking for good news in this agreement, you’ll be looking for a long time. Overall, what we’re left with is bad news and less-bad news.

And what’s the less-bad news? There are a few noteworthy angles: (1) if the trigger kicks in, Medicaid and Social Security would be walled off and protected, and while the domestic cuts could affect Medicare, the cuts would be limited to Medicare providers, not beneficiaries; (2) triggered cuts for the 2012 fiscal year are practically non-existent, so it won’t hurt the economy in the short term; (3) a surprising amount of the overall deal targets the bloated Pentagon budget, which makes more painful domestic cuts less necessary; (4) there won’t be another debt-ceiling fight until 2013, giving the GOP one fewer hostages to grab for a while*.

And (5) if the deal passes, there will be no calamity this week, and everyone lives to fight another day.

Still, I know this gets repetitious, but I’m inclined to say it anyway: there’s nothing in this deal to promote economic growth and nothing to create jobs. We’re still stuck in the wrong conversation, focusing on a crisis that doesn’t exist, and ignoring the immediate crisis that confronts the nation. Indeed, all available evidence suggests the agreement will make the economy and job losses worse, not better. That Republicans wanted to take a huge step backwards, and Democrats negotiated to make it a more modest step backwards, is cold comfort.

The Senate is likely to vote on the deal as early as this afternoon, and passage appears likely. The House vote may come tonight, and the outcome in the lower chamber is very much in doubt.

* edited slightly for clarity

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.


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  • SadOldVet on August 01, 2011 8:05 AM:

    If the repukes accept The Obomination's surrender;

    Then we see who the repukes and dumbocraps appoint to the SuperCongress.

    If the repukes appoint teabaggers and the dumbocraps appoint Blue Dog DINOs;

    Then we know that the fix is in to start the process of eliminating the social safety net in our country.

  • Steve B on August 01, 2011 8:10 AM:

    I sort of believed he was honest and had integrity.

    Instead he lied and then rolled over for the people who will employ him after he loses in 2012. How can he not? Don't select Obama or we'll crash the economy. Sounds like a plan for a campaign. Just like the one he just rolled over for. They didn't beat him. He rolled over before they had a chance. The image in my mind is a dead animal cartoon. One the road, with tire tracks, exes for eyes, and all four leg straight up in the air. And people standing around saying, How could it have been so stupid.

  • Steve B (not Benen) on August 01, 2011 8:12 AM:

    The above comment is not by Steve Benen. My bad if my name misled anyone.

  • c u n d gulag on August 01, 2011 8:13 AM:

    About the nicest thinkg I could say is, P-U...

    The President and the Democratic Party just took the gun the Republicans were holding to the hostages heads, and started shooting themselves.

    I suppose the deal could have been worse.

    I don't know how.

    But I suppose that's possible.

  • lou on August 01, 2011 8:14 AM:

    The well of hostage taking ransom now has a bottomless aspect. The poor and the middle classes would be wise to not look there for their reflections but to their surrounding plots for future sites of "victory" survival gardens.

  • SteveT on August 01, 2011 8:19 AM:

    The House vote may come tonight, and the outcome in the lower chamber is very much in doubt.

    And that may be the one way to salvage something out of this complete capitulation. Not that there is any way that this doesn't suck, but it could keep it from sucking to the point of economic disaster.

    The House progressive caucus needs to do some hostage taking of their own and demand a veto over which Democrats get put on the Super Congress committee. Because I'm sure that Obama is planning to set up another Simpson-Bowles conservative wet dream.

  • tommybones on August 01, 2011 8:22 AM:

    Know hope! Not.

    Our country is now officially a banana republic.

  • david1234 on August 01, 2011 8:23 AM:

    Congress authorized the spending, and it authorized paying for the spending with platinum coins. I do not see how anybody is being held hostage. Why should we keep pretending otherwise?

  • David on August 01, 2011 8:24 AM:

    Unless I'm misunderstanding, there is no done deal. As of later today, the following seems an entirely scenario:

    1) Obama publicly approves of this deal;
    2) The Senate approves of this deal; (i.e. all the Democratic power centers approve)
    3) The House doesn't.

    So, we have one more "negotiation" (now at the very, very last minute) between the Obama/Senate deal and the House...

    Haven't we been through this one before?

  • Ted Frier on August 01, 2011 8:28 AM:

    A few random points:

    First, I don't like the way the package with its "triggers" once again portrays Democrats as either weak on defense or anti-military because apparently only Republicans on the Super-Congress will be motivated to cut a deal so as to avoid deep cuts in defense.

    Second, taxes didn't have to be in this deal specifically because that is already implied with the $4 trillion (maximum) expiration of the Bush tax cuts in 2012, provided nothing changes. That is why it was imperative for this deal to extend beyond the election in to 2013 so that tax cuts could not be held hostage to the debt ceiling the way it was for unemployment insurance.

    Third, because of #2 above, this deal is really not all that different from the Reid plan except for the menu of possible cuts and triggers. Reid was still more than $2 trillion in cuts, though a lot of it smoke and mirrors.

    And finally, I continue to believe that a major player in these negotiations was the "Invisible Hand" we never saw -- financial plutocrats. Yes, Republicans threatened to blow up the economy if the Democrats did not cave into their extortion. But Obama always had the Constitutional Option to counter that if he was willing to play it. Assuming he does not really believe that budget cuts are the way to go right now, the only reason I can see why he did not tell Republicans he was going to raise the debt limit no matter what they did was that Wall Street and the rating agencies were helping Republicans by telling the President they would still downgrade America's debt or pull back on lending if he tried to go it alone.

    That is Wall Streets MO. This is the same Oligarchy, for example, that is sitting on trillions in uninvested capital and, whether by design or not, playing the Republicans game by delaying the recovery from occuring. And now that the federal government as the consumer of last resort is out of the game, it is not clear when that recovery happens. Maybe it does not happen until the Oligarchy gets its way and a Republican is in the White House -- when suddenly the money will begin to flow again, which Republicans of course will credit to the superiority of their ideas, their conservative principles and the magic of supply side economics.

  • Bob M on August 01, 2011 8:28 AM:

    If the House doesn't approve it, then Obama gets to solve the problem himself.

  • bignose on August 01, 2011 8:28 AM:

    I can easily see a scenario where the House defeats this with TPer's and most of the Dems voting "No"

  • berttheclock on August 01, 2011 8:31 AM:

    Could we, please, find a Progressive Democrat to take over the leadership of our party? Perhaps one who only knows how to play checkers instead of three dimensional chess.

    SadOldVet, hang in there. The Obamabots can't handle the truth.

  • Live Free or Die on August 01, 2011 8:31 AM:

    The worst part about this deal is that most of Tea Party will not vote for this and will be able to go home and brag about liberals, meanwhile, will have to vote for this and go home. So liberals will have to sacrifice to protect teabagger incumbents.

  • ElegantFowl on August 01, 2011 8:32 AM:

    Restore divided government, elect a Democratic Congress in 2012.

  • DAY on August 01, 2011 8:34 AM:

    It is somewhat disheartening that almost everyone posting here over the last few days is way, WAY, smarter than the professional politicians who do this full time.

    I say that with a wee drop of sarcasm.

    Cutting 1.2 trillion over 10 years is 120 billion a year. Even taking defense off the table- and it is not-that task won't cause any ombudsman (" bipartisan panel") to break a sweat.

    Since medicare is off the table, the scooter chair fraudsters can continue business as usual. But not payments to Big Ag, Big Pharma, Big Oil.

    It will be fun to watch the Tea Party cut the cords to their astroturf masters.

  • bignose on August 01, 2011 8:34 AM:

    House Dems should vote "Present". Make the GOP pass this thing on their own.

  • Okie on August 01, 2011 8:36 AM:

    The "compromise" is that they didn't shoot the hostage.

  • Rick Taylor on August 01, 2011 8:36 AM:

    "Is this a deal? Sure. Is it an agreement? Absolutely. Can it fairly be characterized as a “compromise”? Not at all."

    Of course this is true, but how do we argue this when the President says, "Now, is this the deal I would have preferred? No. I believe that we could have made the tough choices required -- on entitlement reform and tax reform -- right now, rather than through a special congressional committee process. But this compromise does make a serious down payment on the deficit reduction we need, and gives each party a strong incentive to get a balanced plan done before the end of the year. "

  • sue on August 01, 2011 8:36 AM:

    But Obama always had the Constitutional Option to counter that if he was willing to play it. Assuming he does not really believe that budget cuts are the way to go right now, the only reason I can see why he did not tell Republicans he was going to raise the debt limit no matter what they did was that Wall Street and the rating agencies were helping Republicans by telling the President they would still downgrade America's debt or pull back on lending if he tried to go it alone.

    More likely he was getting feedback from the markets that we could encounter difficulty in selling a new bond issue if it was tainted by an overhanging cloud of a 14th amendment constitutional court fight. And if the bonds were not easily sold, there would be no new money to pay the bills with.

  • POed Lib on August 01, 2011 8:37 AM:

    When I made 100s of phone calls before Nov 2008, when I gave money, when I went to house parties, i was under an illusion that Obama shared some principles with me.

    I was wrong.

    Obama has no principles. He would sell his dead mother for a deal.

    Until I see 1 action from him supporting MY ideals, I am not lifting a finger to help him in 2012.

  • bdop4 on August 01, 2011 8:38 AM:

    "Still, I know this gets repetitious, but I’m inclined to say it anyway: there’s nothing in this deal to promote economic growth and nothing to create jobs. We’re still stuck in the wrong conversation, focusing on a crisis that doesn’t exist, and ignoring the crisis that’s real. Indeed, all available evidence suggests the agreement will make the economy and job losses worse, not better. That Republicans wanted to take a huge step backwards, and Democrats negotiated to make it a more modest step backwards is cold comfort."

    Steve, this can't be said enough, and it needs to be repeated constantly until 11/2012.

  • Live Free or Die on August 01, 2011 8:39 AM:

    If this passes, Pelosi should hold a press conference. She should say that because the teabaggers used this strategy and the media portrayed it as both sides, the teabaggers will pay no political price. If in the future the dems have only the House, this now is a legitimate tactic that we can use against a Republican president. We expect the same media treatment (both sides) if this happens.

  • SteveT on August 01, 2011 8:40 AM:

    Ted Frier said:
    . . . taxes didn't have to be in this deal specifically because that is already implied with the $4 trillion (maximum) expiration of the Bush tax cuts in 2012, provided nothing changes.

    But something has changed. The Republicans have discovered that hostage taking works. They can threaten to shut down the government just before the election unless the Democrats renew the Bush tax cuts again.

    Then whatever happens their campaign themes for the 2012 election -- which will be faithfully repeated by the corporate-controlled media and which will be all but unchallenged by spineless Democrats -- will be that (a) Democrats want to raise the taxes of the middle class, and (b) Democrats want to leave our soldiers stranded overseas without pay, food or ammunition.

    I don't see any scenario that won't result in another Republican sweep in 2012.

  • Anonymous on August 01, 2011 8:42 AM:

    @POed Lib:

    I agree with you. I will vote for him, but I will not lift a finger or send a penny to his campaign. He can go to Wall Street and ask them for their help.

  • Danny on August 01, 2011 8:43 AM:

    Well, the deal is obviously a stinker on from a progressive perspective. I was pretty confident all along that we'd get better than this, but feel compelled to admit I was to optimistic.

    Silver linings are pretty much no cuts in fiscal 2012, so the deal will be Keynesian neutral (so to speak) with regards to the Economy up to the 2012 elections. Obviously what happens after 2012 is of great importance to every american, but if the economy is still weak then and Obama loses reelection we can always take solace in the fact that Republicans will have to own their own stinking policies.

    The trigger part sounds slightly better than I was afraid at first. 50% defense and 50% domesting (including medicare providers) sounds like a fairly ok breakdown for us incentive-wise (meaning that republicans ought to be at least as anxious to get a deal as we are).

    The downside is the baseline that makes any change to the Bush tax cuts unlikely. But a raise in the capital gains tax is possible as part of a deal.

    Then, there's of course the possibility to let the Bush tax cuts expire, or using a veto threat as leverage to make some of them expire.

    In summary: this deal is clearly tilted towards republican preferred policy. In and of itself it is a letdown. We simply have to do better in the next battle.

    (But the third party crowd make zero sense to me. I consider Obama a solid center-left president so far. This is the first legislation he put his name to that I didnt feel was an overall progressive win. The only way forward is electing more progressive democrats to congress and getting our message out there.)

  • Seould on August 01, 2011 8:44 AM:

    @In this case, half of the cuts would come from defense (presumably a goal Republicans would want to avoid), while the other half would come from domestic spending (which Dems would want to prevent).

    There are many many flaws in the deal, but the one above is egregious. The Tea Party is not particularly interested in defense. Many of them want to bring the troops home much sooner than Obama has proposed. As far as I can see, this trigger is attached to a gun aimed directly at the Democrats' head. It is yet another cave.

    In the chat room I frequent, I have been vilified and attacked as a naive fool up one side and down the other for defending Obama for the last 2 1/2 years. Over the last couple of weeks I have crowed (a bit too soon) that he had the Tea Party on the ropes--the public saw them for the foaming-at-the-mouth radicals that they are. And then today.

    It is time Bill has some fake heart palpitations so Hillary can 'choose to spend time with her family' until next winter and announce her challenge about two weeks before the Iowa caucus. Yes, I know the dangers...I was around for McCarthy/Kennedy in '68, T. Kennedy in '80, and Nader in '00.

    I understand and fully support the need for compromise. I do not understand or support the need for abject surrender to blackmail.

  • Danny Gail McElrath on August 01, 2011 8:45 AM:

    I am still hoping for enough House Dems to hold fast. But if this does pass the House then you will know this is the day the soul of the Democratic Party finally died though the outer shell may keep on for a while. It had been growing sicker for many years, weakened by copius bleeding from continual self inflicted wounds. Instead of fighting to get better, this once strong entity, in a final act of cowardice, struck the final blow to itself and expired, leaving behind many bereaved mourners.

  • kevo on August 01, 2011 8:46 AM:

    The boundaries of civil discourse, political debate, and public policy efforts have been irreparably damaged!

    Why? Because though the hostage this time did survive, but limbs had to be severed, and now the hostage can't walk the walk, let alone talk the talk of Middle Class America! -Kevo

  • T2 on August 01, 2011 8:47 AM:

    If the result of this bill is that hordes of Dems again stay home on voting day, handing the TeaBags more seats, then they will have succeeded. For the sake of the nation, we can't give them that.

  • Anonymous on August 01, 2011 8:48 AM:


    You are completely wrong. This is anti-Keynesian. It will shrink the economy. Why should Republicans act any differently next time when the last two hostage situations they got every thing they wanted? All of a sudden they are going to act reasonably? This is a shit sandwich with maggots as the topping. Don't try to spin us. We are not idiot teabaggers.

  • Live Free or Die on August 01, 2011 8:51 AM:

    Michelle Steele actually said something intelligent when dems were complaining. He said that where are the liberal teabaggers? Why dont they primary people? If only one side does it, the other side loses.

  • Danny on August 01, 2011 8:55 AM:


    It is - if Steve's reporting is correct - Keynesian-neutral through fiscal 2012; meaning that there are "pretty much non-existant" cuts. That means that no money is added to the economy and pretty much no money are taken out. With regard to federal spending.

    Sure, in fiscal 2013 it will stop being Keynesian-neutral and start acting as a drag on the economy. By that point the economy will have either gained enough steam to be sustainable with the decrease in fed spending or it wont. My hope is that it will (for the sake of the country) and my solace if it wont is that there's either gonna be a Republican president owning their shitty policy or else a second term democratic president, not up for reelection...

  • Anonymous on August 01, 2011 8:56 AM:

    Actually, this is better than a compromise. According to the White House, this is a, "BIPARTISAN DEBT DEAL: A WIN FOR THE ECONOMY AND BUDGET DISCIPLINE The debt deal announced today is a victory for bipartisan compromise, for the economy and for the American people." It ensures, "that no one will be able to use the threat of the nation’s first default now, or in only a few months, for political gain"

    Break out the champagne!


  • berttheclock on August 01, 2011 8:59 AM:

    @Rick Turner, you write, "serious down payment on the deficit reduction we need" Baloney!

    You sound akin to those so-called advisers surrounding Obama following the 2010 elections. Instead of job creation, they talked him into speaking only of reducing the deficits. We need a vast amount of stimulus to create jobs. Should Obama spend the rest of his term only trying to reduce deficits, he will be back as a Community Organizer in Chicago, come late January 2013. He and those advisors let the Right set the agenda and forced him to attempt to play catchup.

  • TT on August 01, 2011 8:59 AM:

    Nothing would warm the heart more than to watch the Dems do this to President Romney--and listen to the giant guttural scream of outrage from the right about terrorism, ransom, hijacking, crashing the economy, and so on. The calls to use the 14th Amendment would be particularly rich (which, by the way, the GOP would almost certainly do).

    But who am I kidding? The Democrats won't do it. Being patriotic, responsible, and mindful of your fellow citizens does have its drawbacks.

  • RD Padouk on August 01, 2011 9:03 AM:

    There's a saying that to win you have to risk losing. And given that, in this case, to lose would have meant crashing the world economy, I am glad that the President wasn't willing to take the risk.

    So, given the premise that risking a default wasn't an acceptable strategy, what could the President have done to guarantee a better deal? Secret Ninja moves? Jedi mind tricks? Flexing a lot? This outcome was pre-ordained. The Republicans weren't going to budge on revenue no matter what. The only thing the President could realistically hope for is to minimize the damage.

    The thing to keep in mind, though, is that this isn't like buying a car when you and the dealer will never again meet. There are many legislative encounters to come. The President still has leverage when it comes to the Bush Tax Cuts, and the Republicans have emerged weaker as well. There's a lot of potential in what comes next.

    Finally, of course, if the things the Republicans have mandated are really so terrible, the public should notice and respond.

  • Anonymous on August 01, 2011 9:07 AM:


    I will take economists' facts over politicians' opinions any day.

  • Anonymous on August 01, 2011 9:11 AM:

    Republican president owning their shitty policy or else a second term democratic president, not up for reelection..."

    If Obama loses, watch the next Republican all of a sudden want to spend money, ala Bush. There will be all this infrastructure spending.

  • neil b on August 01, 2011 9:13 AM:

    Some points:
    1. The lame-stream media tend to confuse the logical concept of compromise (how to the middle the final result is) with the "fight" idea of compromise (how easily either side gave in, the amount of heat in the discussion, etc.) - IOW, the ethological appearances. So if one side fights hard to hold against losing it all, and ends up with only 20% of what it wanted, they are no more "compromising" than the other side.
    2. The LSM *says* it *likes* compromisers and decries the intransigents who block agreement, so to the extent they are honest - heh - they should just *love* Obama for this. They can't have that concept and consider him a "loser" at the same time.
    3. The LSM also confuse "debate" with "battle." Some of their predictably shallow hacks said, the Republicans "won the debate" by getting more of what they wanted. But winning a debate is supposed to mean the legitimate triumph of your argument, in the manner a debate referee would score as a "win." (Or even, impressed enough intelligent people to agree.) It is not to be confused with having enough power leverage to *get* what you want to happen.

    We are governed by crazy, stupid, compromised people, reported on by stupid, compromised people.

    POed Lib: I keep reminding people that Obama needed to get something *passed*. All these childish fantasies of playing brinkmanship until literally the last minute, the pretense there was an easy (albeit even if "possible") route by A14, etc, are indeed not what adults know they can accomplish. And POed Lib, if Obama loses to Bachmann (vote as you wish in a *primary*), then I know that *you* personally are one we can blame for that!

  • Ted Frier on August 01, 2011 9:14 AM:

    I am sure there is a psychological term for the behavior of a mainstream press and governing establishment that looks at a default crisis manufactured entirely by right wing Tea Party Republicans, but which then requires the votes of liberal Democrats to resolve because Tea Party radicals still won't agree on anything that doesn't give them 100% of what they wanted, and then blames liberal Democrats if they don't somehow keep America from defaulting. The Tea Party is crazy, the governing class says, it's up to the adults to solve the problem.

    Anyone who has younger siblings understands the dynamic: parents are always blaming you for the misbehavior of your younger brothers and sisters because "you are old enough to know better." Listening the commentary on NBC and CNN criticizing Democrats for not showing greater "leadership" in finding a "compromise" to resolve this fake crisis -- while at the same time completely taking the GOP's bad behavior for granted and without comment -- isn't too much different from a parent blaming their oldest child for failing to keep the young ones out of trouble.

  • martin on August 01, 2011 9:17 AM:

    Hope R.I.P.

  • Live Free or Die on August 01, 2011 9:18 AM:


    Also capitalist are saying the same thing.

    "Mohamed El-Erian, chief executive of the bond investment firm Pimco, warned that cuts would make a weak economy weaker. " This is a shit sandwich that will make unemployment worse. Please don't try to convince us other wise.

  • Rick Taylor on August 01, 2011 9:19 AM:

    "So, given the premise that risking a default wasn't an acceptable strategy, what could the President have done to guarantee a better deal? Secret Ninja moves? Jedi mind tricks? Flexing a lot?"

    Risking a default was always necessary, the only question is how far we'd take it. If avoiding a default at all costs was necessary, we would have agreed to cap cut and balance, and passed a constitutional amendment to balance the budget.

    Of course we were never going to agree to anything to avoid a default, that's why Republicans lost on their ultimate goal. The past months have been a process where they've measured how much they could extract, and got everything they could.

    If Democrats had agreed to less, if they'd turned down a commission with triggers that didn't involve revenue enhancement, would the Republicans have crashed the economy? Is it just a coincidence that the absolute maximum we were willing to concede was just barely enough to convince Republicans to relent? No of course not. We got played. Our strategy was to figure out what we could possibly compromise to get these people to agree, and their strategy was to extract everything they could.

  • j on August 01, 2011 9:19 AM:

    Am I right in thinking that this sets up Medicare, Social security and tax breaks for the wealthy as something to be debated in the next election - I wonder who wins that debate.
    Strange that Mitt Romney is hiding away trying not to come up with a view on the debt crisis - he is waiting to see the outcome before he knows what his views are.

  • Ted Frier on August 01, 2011 9:22 AM:

    One point in the Democrats favor to show the weak hand they always had to play so long as they were dealing with revolutionaries willing to bring down the world: When economists talk about the US dollar being the reserve currency that stabalizes world markets, or when banks are required to maintain a certain amount of "capital" in reserve, it's not dollars they keep in their vaults, but US Treasury Notes, which the world uses as "cash" because US T-bills literally are "good as gold." The value of those bills is what Republicans were willing to put at risk in order to get the reward of ideologically driven spending cuts. I am not sure how Democrats ever could have matched that once it was clear how far these radicals were willing to go. They were literally willing to put the world's entire currency system at risk, not just loans to the US, because Central Banks by T-bills to shore up their own currencies not just, in China's case, to give US consumers the loans to buy Chinese products.

  • RollaMO on August 01, 2011 9:26 AM:

    Each time I read "it only affects providers" reinforces how little most of the country understands about healthcare delivery. Hospitals and doctors already lose money or break even at best on Medicare (they lose big on Medicaid). For a typical hospital, Medicare/Medicaid make up 50-65% of their business. The only area they make margin is on insurance patients. Further cuts in reimbursement will lead to increased charges (and that means increased premiums for all of us with insurance, charges make no difference on fixed Medicare/Medicaid payments). It will also impact staffing levels, impacting quality and safety.

  • James M on August 01, 2011 9:34 AM:

    I've changed my mind.

    I argued on another site that a slow death was always preferrable to a quick one, but I am beginning to wonder. I think Ted Frier is right: the GOP was threatening Armageddon,and the Tea Partiers might even have preferred it. We may have stop imminent disaster, but what have we gained?

    This 'deal' is almost certain to tank the economy, and, as the Israelis (the 1 point I agree with them on) have learned through painful experience, negotiating with hostage takers only encourages more kidnappings. I am almost hoping the Dems in the House vote this down. Then the world, starting with John Q Public at home, will be able to experience first hand the pain the uniformed and reckless GOP caucus had caused.

  • June on August 01, 2011 9:41 AM:

    Haven't had time to read all 47 comments above me, so don't know if anyone's touched on this, but I disagree with this assessment from Benen:

    "Still, I know this gets repetitious, but I’m inclined to say it anyway: there’s nothing in this deal to promote economic growth and nothing to create jobs. "

    1) This bill was never about being a stimulus deal
    2) Yet, there is something very powerful in this deal to stimulate the economy, promote economic growth, and create jobs. It's being discounted by far too many pundits and talking heads, but it is there. What is it? Economic certainty. The economic certainty that Republicans can't pull this disgraceful nonsense again for at least a year-and-a-half or so. That counts for a lot when companies are looking at hiring; when institutional guys are looking for where they're going to invest for their company's customers' 401k's; whether the market is depressed or rallying - the market loves "certainty." So, I can't agree with Benen on this one; the economy was already showing signs of a stronger recovery before the Republicans deliberately sabotaged it; now that they've been pushed back, I really think the economy may be able to not only stay on its feet, but start to pick up and run a little. Of course, I'm sure the GOP is already huddling about how they can next "hurt people," so that would be my caveat on what I just said.

  • Neurologically disordered on August 01, 2011 9:41 AM:

    THERE WAS A COMPROMISE; It was between the Tea Party caucus (afraid of trillion dollar deficits) and the business lobby (that controls government) who doesn't care about this nations finances because they're about looting countries and exploiting workers.

  • KurtRex1453 on August 01, 2011 9:44 AM:

    Listen up folks, we can be depressed or get into action. If we make enough noise, people will notice.

    Here's my toon, expressing my feelings. It shows the middle class, poor, and elderly crushed by dancing white men representing mega corps, the über rich, and the ultra right: "Celebrations">http://twitgoo.com/2le3w1">"Celebrations Over the Debt Ceiling Deal"

    My point would also be that if we do not get out and make noise and start convincing people that that having the government run a large share of the economy is a good thing we will wind up with an oligarchy of the idle rich wasting their time while the poor starve, our infrastructure collapses, and our educational system become too expensive for anyone but the rich or those who wish to become indentured servants. Remember if you like Dickensian England, you will LOVE the world the Tea Party and the GOP has planned for YOU.

  • Sarafina on August 01, 2011 9:51 AM:

    "The above comment is not by Steve Benen. My bad if my name misled anyone."


    Jesus, how dumb are you?

  • deaniac83 on August 01, 2011 10:51 AM:

    Actually, not only is this a compromise, this goes in the Dem's favor. Here's how:


    There is NO cuts in Medicare benefits in the trigger. None. Doesn't exist. The Medicare "cuts" are to providers. Has Congress ever overridden legally required cuts to Medicare providers? Oh, right. It does that every year. It's called a Doc fix!

  • bdop4 on August 01, 2011 10:59 AM:

    This paragraph in the detailed statement speaks volumes:

    "The Enforcement Mechanism Complements the Forcing Event Already In Law – the Expiration of the Bush Tax Cuts – To Create Pressure for a Balanced Deal: The Bush tax cuts expire as of 1/1/2013, the same date that the spending sequester would go into effect. These two events together will force balanced deficit reduction. Absent a balanced deal, it would enable the President to use his veto pen to ensure nearly $1 trillion in additional deficit reduction by not extending the high-income tax cuts."

    This statement presupposes that provided there is a "balanced deal," Obama will extend the tax cuts - all of them.

    You cannot be serious about deficit reduction when your default position is that the Bush tax cuts will be extended.

  • Just a guy on August 01, 2011 11:35 AM:

    I will not vote for Obama again, but that doesn't matter since I live in Texas. But I implore all readers of this blog to remember that if the POTUS won't lead, the we need a Congress that will. More than ever, we need to get out the vote in '12. It's critical -- the tea-baggers and their ilk are plutocratic brownshirts.

  • Lockewasright on August 01, 2011 11:37 AM:

    I agree with Deaniac. Dems have been looking for defense cuts for ages. The spending cuts are pushed way out to give the economy time. None of the cuts will be to entitlement benefits. The debt ceiling fight will not happen again until after the election. The Bush tax cuts remain on the table while entitlement benefit cuts have been specifically taken off of the table. My guess is that most of the cuts will be the ones Joe Biden offered early on. They will be non-stimulative spending and smoke and mirrors. This is Boehner tossing the teahdists under the bus in favor of his Wall Street masters... again. Meanwhile, we can toss the "financially irresponsible democrat" argument right on top of the "soft on terror" argument in the stack of GOP talking points which have just vanished for the 2012 race.

  • E.Hatt-Swank on August 01, 2011 11:38 AM:

    Just wanted to second the comment by KurtRex1453 @9:44am.

    I'm very disappointed at how this is all playing out. I don't share the vitriol that many direct at Obama and "Obamabots" etc, but neither can I pretend that the WH's spin is anything but spin. Of course, there's still a chance that the deal will be rejected by the never-satisfied lunatics in the House, and perhaps Obama will be forced to fall back on the 14th amendment or something. Even if that happens, it won't be because Obama had some master strategy, of course.

    OK, so the hostage negotiators didn't live up to our expectations, and although we got the hostages out, the hostage-takers got away. Now what? We have to pursue them and take them down. Even if folks on the left are going to have a tough time being enthusiastic about Obama's re-election after all of this, that doesn't prevent us from turning our anger & frustration against those who created the situation in the first place. God knows the TeaBaggers have demonstrated that with nothing but negativity and anger, people can have an effect on election day. Surely we can all stop sniping at each other and get behind that, right?

  • TCinLA on August 01, 2011 11:55 AM:

    What part of this is not abject surrender? What part is not an unmitigated disaster.

    As Churchill described the Munich Agreement:

    the utmost my right hon. Friend the Prime Minister has been able to secure by all his immense exertions, by all the great efforts and mobilisation which took place in this country, and by all the anguish and strain through which we have passed in this country, the utmost he has been able to gain for Czechoslovakia in the matters which were in dispute has been that the German dictator, instead of snatching the victuals from the table, has been content to have them served to him course by course.

    The Chancellor of the Exchequer said it was the first time Herr Hitler had been made to retract - I think that was the word - in any degree. We really must not waste time after all this long Debate upon the difference between the positions reached at Berchtesgaden, at Godesberg and at Munich. They can be very simply epitomised, if the House will permit me to vary the metaphor. 1 Pound was demanded at the pistol's point. When it was given, 2 Pounds were demanded at the pistol's point. Finally, the dictator consented to take 1 Pound,17 and 6, and the rest in promises of goodwill for the future.

  • getplaning on August 01, 2011 1:02 PM:

    Two things. First, the stock market rally that was sparked by this "agreement" didn't even last thirty minutes.

    Second, the Republicans realize they can never dismantle the successful programs created by FDR and Democratic administrations, because they are so popular. They have to be dismantled by a Democratic president and agreed to by Democrats in Congress. The Republicans have done a masterful job of getting it done. This chapter in American politics will be considered a turning point in American history.

  • Carriemd on August 01, 2011 1:08 PM:

    @getplaning -- In fairness, the dip that cut the rally short was probably precipitated by a weak manufacturing report that dropped this morning.

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