Sunday, July 31, 2011

Summary of New U.S. Deal on Debt Negotiations as we know them now.

Here are the highlights as I understand them:

  1. Raise debt ceiling provisions through to end of 2012 as required, but most subject to deliberations of the congressional committee on spending cuts.
  2. Cut deficit immediately by $917 Billion.
  3. Cut deficit over next 10 years by a total of $18 Trillion by means to be proposed by the bipartisan congressional committee.
  4. This Committee must use current law(s) which includes expiration of all Bush tax cuts in 2013 for rich and a 50% reduction in the $1,000 child credit, and no adjustment to the Alternative Minimum Tax.
  5. If this Committee fails to agree on spending cuts by Thanksgiving for up to $1.5 Trillion, then $1.2 Trillion cuts will trigger automatically -- 1/2 to come from cuts in defense spending, and the rest primarily from non-defense discretionary spending, and some of it from entitlement program spending.
  6. Any cuts to Medicare that may be triggered will only impact the Providers and not the public who use the program.
  7. There is no tax reform mandatory in the deal, or for the Committee to consider.
  8. There is no net new revenue that will be considered.
  9. It is agreed that B.O. will veto an extension of the Bush tax cuts (see above) for those families earning more than $250,000 a year unless there is elimination of current tax subsidies.
The deal as it stands above is very similar to Boehner's last plan he put forward and the House passed.  Clearly, even CNN is admitting that the Republicans got almost all they wanted and the Democrats got very little of anything they wanted except that the ceiling was raised to prevent default.

Still needs to pass the House and the Senate.  As I write this, we have no idea of where Pelosi, who has supposedly agreed to this, really stands.



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