Do you remember where you were when last year's debt deal was sealed? Few people remember the exact date of the debt ceiling deal made last summer or where they were; I happen to know the date and where I was because it was August 2nd, which is my birthday. My husband says I get better with age – consensus is that the debt deal does not. Nothing much usually happens in August; there are no federal holidays, lots of people go away on their summer vacations, and generally things in Washington are very quiet. Well, last August 2nd, the nation's – and some say the world's – economy came to the brink and was saved (at least temporarily) due to the bipartisan deal on the debt ceiling, formally known as The Budget Control Act of 2011.
This measure was the result of months of debate, disagreement, dissent, and generally serves as a textbook illustration of the current dichotomy in political views. The deal was like most compromises – imperfect and both sides feel they got some wins and some losses. Members of Congress built in a fail-safe trigger – if the "supercommittee" (remember that?) couldn't come to agreement on what to cut and how much, then automatic across-the-board reductions in spending would go into effect beginning January 1, 2013. Now, five months away from that deadline most Members of Congress have buyer's remorse. The Act applies equal amounts of cuts to both defense and what those inside the Beltway call "non-defense discretionary programs," which in English means everything that is not defense, not interest on the debt, and not entitlement programs (e.g., Medicaid, Social Security) that were carved out or whose cuts (e.g., the Medicare) were capped under the deal. The Centers for Budget and Policy Priorities (CBPP) estimate the Budget Control Act will result in cuts of approximately $109 billion per year, or $984 billion through 2021, for both the defense and "non-defense discretionary".
Congress just achieved bipartisan agreement on a six-month deal on regular order annual appropriations to avert a government shutdown and get us past the election and push that debate into the next session of Congress – leaving the big ticket hot potato political and budgetary issues (read: problems) for the Lame Duck session. Somehow between the November 6th election and New Year's Eve Congress has to tackle the impending sequestration, expiring tax cuts, fixing the reimbursement for physicians who treat Medicare patients (aka, "the doc fix" or SGR), raising the debt ceiling, etc. There is not much bipartisan agreement on remedies to any of these issues but there is one thing both sides can agree upon now – no one should be buying airline tickets home for the holidays quite yet.
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