The debt-ceiling deal: Winners and losers

[AntZ]

The debt-ceiling deal: Winners and losers

By Chris Cillizza,



The debt ceiling fight is over. The White House and congressional leaders have settled on a deal to raise the nation’s debt ceiling, enact immediate spending cuts and, our favorite part, create a super-commission designed to trim the federal budget further by the end of the year.

The political stakes for this fight were massive — and it produced a number of winners and losers. Our take on the best and the worst is below.

Winners

Mitch McConnell: The Kentucky Republican was like the Mariano Rivera of the debt deal. He waited until the game was in its final moments, came onto the field and helped close things down (in a good way). McConnell was also a voice of reason and frankness for Republicans, making clear that default would be a huge political loser for the party. In the end, he got a deal the way he wanted one — with him at the center of negotiations.

Tea party: There were major questions coming into the 112th Congress about who would blink first — the largely establishment-aligned leaders of the new Republican House majority or the tea-party-aligned freshman members. We got our answer to that question late Thursday as House Speaker John Boehner was forced not only to postpone his compromise bill but ultimately to add conservative sweeteners to get the 217 votes he needed. (He got 218.) The tea party — inside and outside Congress — will almost certainly be emboldened by the result of this fight.

President Obama: The president needed a deal of some sort to prove that he was capable of making the government work — even if it took until the eleventh (and a half) hour to strike the compromise. Liberals are likely to be deeply unhappy about the nature of the deal, which includes no increases in taxes or revenue. But remember that Obama’s target constituency in 2012 is not his base but rather independent and moderate voters. And those fence-sitters love compromise in almost any form.

Congressional Budget Office: The CBO is largely the redoubt of fiscal policy nerds — and we say that with the greatest respect. But for the past week of negotiations, the CBO was a central player — particularly when Boehner’s proposal came in under its proposed savings. Now that a deal appears to be done, the CBO will return to its relative anonymity (until the next budget fight).

Grover Norquist: With no revenue increases in the final deal, Norquist, the head of Americans for Tax Reform, appears to have held the line. His pledge — signed by hundreds of House members — not to raise taxes or revenue remains intact, as does his reputation as a “do not cross” member of the GOP establishment.

David Wu : Has a member of Congress forced to resign amid a sex scandal ever drawn less media attention? Somewhere, Anthony Weiner is grimacing.

Losers

Congress: Coming into this debt-ceiling showdown, Congress was about as popular as poison ivy. One can only imagine just how much further that discontent has spread after this high-profile demonstration of brinkmanship and intransigence. Lawmakers — bless their hearts — seem entirely unaware of just how bad they looked during this fight and will almost certainly spend the next few weeks (or months) congratulating themselves on their tremendous magnanimity.

Gang of Six : The group was supposed to put lie to the idea that true bipartisanship — in which both sides give somewhat equally — was dead. But the gang was never able to deliver its plans, amid departures and re-arrivals (Sen. Tom Coburn of Oklahoma, we’re looking at you). And after a brief renaissance late in the game when Obama praised the group, it faded again — eclipsed by plans pushed by leaders in both parties.

Commissions: It seems as though the answer to every in*trac*table problem in Washington is to form a commission. Social Security insolvency on the horizon? Commission! Education failing our kids? Commission(s)! (There have been at least four.) Heck, we have already had a commission to deal with the debt problem. The likely formation of a super-commission to figure out what can and should be cut out of the federal budget may not be doomed to failure, but it has a lot of bad commission history to overcome.

Liberals: As the basic framework of the deal emerged, liberals began voicing their discontent about a bargain that left their side wanting more. With no revenue in the initial phase of the legislation and Medicare cuts on the table in the second phase, there’s not much for the ideological left to celebrate.


http://www.washingtonpost.com/politics/the-debt-ceiling-deal-winners-and-losers/2011/07/31/gIQAHl7FmI_story.html

[Acid Trip]

Losers: The American public

This compromise is a pile of horseshit. Any meaningful reduction needed to be in the arena of AT LEAST 4 trillion over 10 years. They only agreed to 2 trillion in cuts over 10 years and at the same time are increasing the debt limit by 2.8 trillion. Does anyone but me see how fucking retarded this is?

I'd be encouraged by the next election cycle but we'll see all the same mother fuckers in DC that have been there for 30 years.

[FBD]

I dont understand how any of it is a win for Obama, other than the winning of postponing the rest of this debate out past the presidential election.

People keep giving him the benefit of the doubt time after time, its getting pretty goddam old. He's sitting there threatening seniors and our military and then people have the utter gall to say republicans are holding the process hostage? :roll: That's about as believable as him "inheriting", most of which he voted for as a senator. Well, the stuff he managed to take a stand on and not vote Present, that is.

At least he got through yet another situation without having to actually come up with a plan! [-(


Sorry liberal progressives, we dont have the funds for your grandiose giveaways.

[Teh One Who Knocks]

Losers: The American public

This compromise is a pile of horseshit. Any meaningful reduction needed to be in the arena of AT LEAST 4 trillion over 10 years. They only agreed to 2 trillion in cuts over 10 years and at the same time are increasing the debt limit by 2.8 trillion. Does anyone but me see how fucking retarded this is?

I'd be encouraged by the next election cycle but we'll see all the same mother fuckers in DC that have been there for 30 years.

You honestly think, and I'm not being facetious here I really want to know your opinion, that the country possibly going into default and losing our AAA credit rating and causing interest rates to rise across the board would have been a better outcome?

Granted, this compromise isn't the best, but it's the best that could be done since congress decided to play a game of brinksmanship with our country's finances and there was no time left. Everyone in both chambers of congress, plus the head honcho in the White House, are all to blame for pushing this mess right to the very edge.

[FBD]

Lance that's a bunch of bullshit - Who had supermajorities in both houses on congress, with the most radically left wing president ever? Who could have passed any sort of spending bill they wanted with no help from the other side? Who shirked that responsibility for years?

If anyone is to blame for the brinksmanship, its Obama and the democrats. Republicans took a whole shitload of the House for the very reason that the people who won those seats were promising fiscal responsibility!

How again is brinksmanship their fault when if the previous session had merely done their due diligence, there would have been no talks of all of this???


I'm not being facetious here, I'd really like to know how you came up with that one.

-Democrats shirk responsibility and dont pass a budget,
-republicans win seats promising to hold back spending,
-they keep their campaign promises (for the most part)

and that equates to Republicans being at fault for the democrats not bothering to figure in their constitutional responsibilities in with their...ah, daily work?

I know shit dont always add up when you're talking politics, but sheesh. :razz:

[Acid Trip]

You honestly think, and I'm not being facetious here I really want to know your opinion, that the country possibly going into default and losing our AAA credit rating and causing interest rates to rise across the board would have been a better outcome?

Granted, this compromise isn't the best, but it's the best that could be done since congress decided to play a game of brinksmanship with our country's finances and there was no time left. Everyone in both chambers of congress, plus the head honcho in the White House, are all to blame for pushing this mess right to the very edge.

We are going to lose our AAA credit rating and get higher rates regardless of this new plan. The rating agencies told DC they needed AT LEAST 4 trillion over 10 years in deficit reduction. We barely got half of that number so the ratings drop WILL happen. If the US isn't downgraded then it will show, beyond a shadow of a doubt, that the ratings agencies are in bed with the US government.

Do I think we should default? Yes and no. The only way to stop over spending politicians is to take away the checkbook or change the rules by which they use it. No because millions of people would be harmed by a default. Do we take our lumps now or later? I'd prefer now over later. The longer we put off the pain the harder it will be. 14.3 trillion this year but 20 trillion several years from now. Hummm.....do I want to worry about 14 trillion or 20? I'll take 14.

[Teh One Who Knocks]

Lance that's a bunch of bullshit - Who had supermajorities in both houses on congress, with the most radically left wing president ever? Who could have passed any sort of spending bill they wanted with no help from the other side? Who shirked that responsibility for years?

If anyone is to blame for the brinksmanship, its Obama and the democrats. Republicans took a whole shitload of the House for the very reason that the people who won those seats were promising fiscal responsibility!

How again is brinksmanship their fault when if the previous session had merely done their due diligence, there would have been no talks of all of this???


I'm not being facetious here, I'd really like to know how you came up with that one.

-Democrats shirk responsibility and dont pass a budget,
-republicans win seats promising to hold back spending,
-they keep their campaign promises (for the most part)

and that equates to Republicans being at fault for the democrats not bothering to figure in their constitutional responsibilities in with their...ah, daily work?

I know shit dont always add up when you're talking politics, but sheesh. :razz:

Just wow dude.....

[Teh One Who Knocks]

We are going to lose our AAA credit rating and get higher rates regardless of this new plan. The rating agencies told DC they needed AT LEAST 4 trillion over 10 years in deficit reduction. We barely got half of that number so the ratings drop WILL happen. If the US isn't downgraded then it will show, beyond a shadow of a doubt, that the ratings agencies are in bed with the US government.

Do I think we should default? Yes and no. The only way to stop over spending politicians is to take away the checkbook or change the rules by which they use it. No because millions of people would be harmed by a default. Do we take our lumps now or later? I'd prefer now over later. The longer we put off the pain the harder it will be. 14.3 trillion this year but 20 trillion several years from now. Hummm.....do I want to worry about 14 trillion or 20? I'll take 14.

I agree with all you said, but for me at this point and time, I'd rather they err on the side of caution and not let the country go into default, especially with as piss-poor as our economy is right now. I mean, at least there are spending cuts involved in the deal, Obama and the democrats originally wanted just a clean bill with nothing else added just raise the debt ceiling.

[Acid Trip]

I agree with all you said, but for me at this point and time, I'd rather they err on the side of caution and not let the country go into default, especially with as piss-poor as our economy is right now. I mean, at least there are spending cuts involved in the deal, Obama and the democrats originally wanted just a clean bill with nothing else added just raise the debt ceiling.

I'd rather they just do their fucking jobs and make a decision already!

We had a debt commission, it came back with a some really good ideas, and then it was shelved because it amounted to political suicide. So then we have the entire Congress trying to create a plan and it failed too (the current plan is not a solution, it's merely a promise to revisit the problem). So now were going to try another commission (now called a super commission) to solve a problem nobody has had the political will to fix the first couple times?

Insanity = Doing the same thing over and over again and expecting a different result. Hello insanity, we have arrived!

[Teh One Who Knocks]

I'd rather they just do their fucking jobs and make a decision already!

Keep that dream alive ;)


We had a debt commission, it came back with a some really good ideas, and then it was shelved because it amounted to political suicide. So then we have the entire Congress trying to create a plan and it failed too (the current plan is not a solution, it's merely a promise to revisit the problem). So now were going to try another commission (now called a super commission) to solve a problem nobody has had the political will to fix the first couple times?

Insanity = Doing the same thing over and over again and expecting a different result. Hello insanity, we have arrived!

I liked the findings of the debt commission, it wasn't perfect, but it was going to set the country down the right path and reign in this ridiculous spending, not to mention that it had bipartisan support. Too bad the person that created the commission completely dismissed every idea they came up with :rolleyes:

[Muddy]

I don't get it all...

[Deepsepia]

The debt-ceiling deal: Winners and losers


Mostly agree, but:



Losers

Commissions: It seems as though the answer to every in*trac*table problem in Washington is to form a commission. Social Security insolvency on the horizon? Commission! Education failing our kids? Commission(s)! (There have been at least four.) Heck, we have already had a commission to deal with the debt problem. The likely formation of a super-commission to figure out what can and should be cut out of the federal budget may not be doomed to failure, but it has a lot of bad commission history to overcome.

. . . notice the power that this deal gives to the "bipartisan commission".

This goes back to what Congress wasn't willing to do with either Simpson -Bowles or Rivlin-Domenici -- give them real power.

Now you have a deal which gives a bipartisan commission real power . . . I think that's a big deal, and I assume that the commission's starting point will be the commission reports we've already had

[FBD]

Just wow dude.....

yup, that's what I've been saying. granted its like a NA member trying to convince a crack addict they need to put down the pipe...

how's it when an admin has to choose between political suicide and financial suicide?

*looks around*

yup, financial suicide it is.

[Teh One Who Knocks]

yup, that's what I've been saying. granted its like a NA member trying to convince a crack addict they need to put down the pipe...

how's it when an admin has to choose between political suicide and financial suicide?

*looks around*

yup, financial suicide it is.

No, you missed the point of my post...just wow that you can only see things with your blinders on, I don't agree with any of the tripe you posted in that diatribe.

[FBD]

:lol: yeah, that wasnt obvious! :razz:

lemme put it another way...

wait, let Marco put it another way...



http://www.youtube.com/watch?v=_68GjR6V6zI&feature=player_embedded

[Acid Trip]

Keep that dream alive ;)



I liked the findings of the debt commission, it wasn't perfect, but it was going to set the country down the right path and reign in this ridiculous spending, not to mention that it had bipartisan support. Too bad the person that created the commission completely dismissed every idea they came up with :rolleyes:

I liked the first debt commissions plan because it hurt everyone equally. Shared sacrifice is the only way I see us getting out of this.

SS, Medicare, Medicaid will need the benefits cut or the age level increased (bad for seniors). We have to fix the tax code and that will get just about everyone (lower rates but higher overall taxes paid in due to removal of deductions). The military has to be cut at LEAST 25-30% (bad for the military-industrial complex).

That would be a good start but there would still be a long way to go.

[Teh One Who Knocks]

I liked the first debt commissions plan because it hurt everyone equally. Shared sacrifice is the only way I see us getting out of this.

SS, Medicare, Medicaid will need the benefits cut or the age level increased (bad for seniors). We have to fix the tax code and that will get just about everyone (lower rates but higher overall taxes paid in due to removal of deductions). The military has to be cut at LEAST 25-30% (bad for the military-industrial complex).

That would be a good start but there would still be a long way to go.

Agree 100%

[Deepsepia]

I liked the first debt commissions plan because it hurt everyone equally. Shared sacrifice is the only way I see us getting out of this.

SS, Medicare, Medicaid will need the benefits cut or the age level increased (bad for seniors). We have to fix the tax code and that will get just about everyone (lower rates but higher overall taxes paid in due to removal of deductions). The military has to be cut at LEAST 25-30% (bad for the military-industrial complex).

That would be a good start but there would still be a long way to go.

If you look at the two commissions, the people who lead them were serious people: Alice Rivlin, Pete Domenici, Alan Simpson, Erskine Bowles.

There wasn't a lot of grandstanding about pet issues-- everyone's favorite thing is going to have to go into the pot.

The problem with both commission was there was no [obvious] penalty for ignoring them.

I say "obvious", because I think Obama would have been vastly better served by taking those reports last January (remember Simpson-Bowles was his own commission) and saying "OK, it kinda sucks, but this is what we're going to do"

Now where we are is with a debt commission chartered by legislation, and with automatic penalties if they can't reach agreement, or if they reach agreement and are ignored.

So I read it as: "a commission with real power".

Congress has done this kind of thing before for politically unpleasant issues -- military base closing comes to mind.

[FBD]

good points, deep. I also thought that Obama would have served himself better if he took the findings of his own commission, but if you recall, didnt he submit his own budget that got shot down 97-0 AFTER that budget commission? (iirc)

if so, its just another display of political naivete, simply doing whatever he thinks will get him the most at any given time.

I wonder who made the call to have all the democrats get up and call the republicans terrorists...hell one of them made the analogy that the tea party strapped a bomb to the capitol and they think they're somehow immune to it!

..."now look, these are people who wont even call REAL TERRORISTS terrorists"...

[Godfather]

You can't spend like the 21st century if you tax like the 1950's

[Teh One Who Knocks]

You can't spend like the 21st century if you tax like the 1950's

If we were taxing like the 1950's, we'd have to seriously raise the rates ;)

http://i.imgur.com/cmnmg.jpg

[Muddy]

If we were taxing like the 1950's, we'd have to seriously raise the rates ;)

http://i.imgur.com/cmnmg.jpg


What are these rates? In 1980 it says 59% for people over 100k... No way.. Whats it say for 2011 I'll tell you if its accurate or not.

[Teh One Who Knocks]

Those are what the rates were back in the day

http://en.wikipedia.org/wiki/Income_tax_in_the_United_States

[Muddy]

So the rate for 100k now would be 28%... Im not sure I trust those early tables...

[Teh One Who Knocks]

So the rate for 100k now would be 28%... Im not sure I trust those early tables...

http://www.taxfoundation.org/files/fed_individual_rate_history-20110323.pdf

;)

[Muddy]

So for example...

If you made $200,000 in 1945 they would take 94% of your money? That leaves you with $12,000 to live on...

While someone making $50,000 @ a .78 was left with $11,000 to live on..?

That can't be right..

[Teh One Who Knocks]

There were no doubt deductions available back then to lower your adjusted gross income, but that's what it was like back then

[Muddy]

The deductions probably were the killer we arent seeing...

[KevinD]

Just on a lark, I looked at what I pay now (percentage wise, no deductions) Married filing jointly at $100,000 (rough estimate, as my yearly income can dramatically change). For 2011, I'm at 25%
Using this online calculator to figure for inflation,

http://data.bls.gov/cgi-bin/cpicalc.pl

I checked what my married filing jointly rate would be in 1968. Hmmm, still 25%

Looking over the data there on the tax rates, it seems pretty evident that taxes initially went up to fund the wars, but never really came back down to pre-world war rates. Imagine that..give a pol money for a supposedly short time, and he will always find a way to keep taking it.

[Arkady Renko]

So the rate for 100k now would be 28%... Im not sure I trust those early tables...

If I understand them correctly, the rates apply gradually so they are only applied for the part of the income that exceeds the respective threshold.


Looking over the data there on the tax rates, it seems pretty evident that taxes initially went up to fund the wars, but never really came back down to pre-world war rates. Imagine that..give a pol money for a supposedly short time, and he will always find a way to keep taking it.

that's the way of the (politicians') world. the same applies for deficits, that are really just supposed to be encurred when extraordinary circumstances like a war, a depression or some other dramatic event warrant them. But since politicians' power or at least their perceived power increases proportionally to how much money they can distribute, they're prone to take in as much as possible rather than leaving it to the taxpayers because they can't claim that they should be reelected for giving people this or that handout, subvention, etc.

[FBD]

That's why this "compromise" is a joke, just like we knew we'd get with Obama in office and Reid controlling the senate and even filibustering his own bill!

By that measuring stick, simply freezing spending would be "saving 400+billion"...

I cant believe "savings" means "dont spend at such a high rate, just lower it a bit....a tiny bit..."

And then a bunch if left to commission, where the democrats have already tipped their hand and said they'll be looking for tax increases.

How's about some spending cuts, assho's? Ya know, REAL ones?

[Acid Trip]

So for example...

If you made $200,000 in 1945 they would take 94% of your money? That leaves you with $12,000 to live on...

While someone making $50,000 @ a .78 was left with $11,000 to live on..?

That can't be right..

That's now not how taxes work. They were taxed at 94% for every dollar OVER 250k. The first 250k was taxed at the listed rates. How long have you guys been paying taxes without knowing how tax brackets work? :-k

[Muddy]

That's now not how taxes work. They were taxed at 94% for every dollar OVER 250k. The first 250k was taxed at the listed rates. How long have you guys been paying taxes without knowing how tax brackets work? :-k


My accountant knows how they work just fine... :tup:

[KevinD]

That's now not how taxes work. They were taxed at 94% for every dollar OVER 250k. The first 250k was taxed at the listed rates. How long have you guys been paying taxes without knowing how tax brackets work? :-k

Let's have a look at the data involved in MG's statement:

1945 tax rates:
93% $150,000 to $200,000
94% $200,000 to infinity

BUT at the bottom is a note:


Note: Tax rates include normal tax of 3 percent plus applicable surtax. The maximum effective tax rate on net income was 90 percent. Last law to change rates was the Internal Revenue
Code of 1945.

This tells me that in 1945 I would have been charged a maximum of 90% if I made $200,000.

Furthermore, if I made anywhere between $150,000 and $200,000, I would have still been taxed at 90%. Without the maximum rate being specified, from $150,000 to $200,000, I would have been taxed at 93%. From $200,000 up, I would have been taxed at 94%. So say I made $199,999...tax rate would be 93%. $200,001 = 94%