Debt ceiling: Good going, guys
By Jeanne Sahadi @CNNMoney July 27, 2011: 1:06 PM ET
NEW YORK (CNNMoney) -- With all the Washington dysfunction over the debt ceiling, it's easy to forget the reality of the debt problems everyone says they want to fix.
Here's what's at stake: An entitlement system that Americans rely on but that promises more than it can afford; a tax code that is complex, inefficient and perceived to be unfair; and a projected growth trajectory for debt that is unsustainable and threatens the country's economic future.
How unsustainable? By 2025, spending on Medicare, Medicaid, Social Security and interest on the debt is projected to suck up virtually all federal tax revenue, with interest costs alone accounting for nearly half. By 2040, there would only be enough in federal tax revenue to pay for interest and most of Social Security.
So what have all the political fireworks in Washington accomplished so far? Not much.
It's likely the debt ceiling will be increased, although when and by how much is still very much up in the air.
It's also expected that any debt ceiling bill will cut spending. But the deficit savings will fall short of the balanced, bipartisan grand bargain that serious fiscal experts say is necessary to start reining in the country's debt over time.
Any grand bargain package would have to include increased revenue and lower entitlement spending, they say. The current bills under consideration include neither.
The kicker: All of the political grandstanding on the debt ceiling in the name of debt reduction has left the country's AAA credit rating vulnerable to a downgrade.
Way to go, Congress.
How did it come to this? There are a lot of factors, but here are just two:
While President Obama now embraces the idea of a grand bargain, he waited months to publicly embrace the framework set out by his own bipartisan debt commission. Nor did he use his bully pulpit early enough to get a rational conversation about debt reduction going.
House Speaker John Boehner, meanwhile, was negotiating a big debt-reduction plan with the president. But his party has also walked away from negotiations three times. And the most conservative and intransigent members of his party -- who broker no compromise on taxes -- have dominated the conversation.
Still, perhaps not all is lost.
Read the rest: http://money.cnn.com/2011/07/27/news...ss_igoogle_cnn
Audit Notes: The Debt Ceiling Blame
By Ryan Chittum
Columbia Journalism Review
Frustrated with the debt-ceiling coverage, which is far too even-handed, I wrote this last night on Twitter:
it’s very simple: if one party would pay our bills, while the other won’t (without) meeting its demands, then the latter is to blame for any mess.
This phenomenon has upset Paul Krugman too, sending him into full-on Shrill mode, in which he calls it “The Cult That Is Destroying America” and “the clearest, starkest situation one can imagine short of civil war.”
But look past the hyperbole and it’s hard to argue with what he’s saying.
Think about what’s happening right now. We have a crisis in which the right is making insane demands, while the president and Democrats in Congress are bending over backward to be accommodating — offering plans that are all spending cuts and no taxes, plans that are far to the right of public opinion.
So what do most news reports say? They portray it as a situation in which both sides are equally partisan, equally intransigent — because news reports always do that. And we have influential pundits calling out for a new centrist party, a new centrist president, to get us away from the evils of partisanship.
If you’re not reporting that the Republicans are ultimately to blame for the crisis here, then you’re not reporting the truth. The Democrats would vote to up the debt ceiling—which pays for bills we’ve already accrued (mostly under Republican presidents)—in a straight-up vote. Republicans want to attach stark conditions to the vote and risk defaulting on our obligations. Even beyond that, the Democrats have made trillions of dollars in concessions to the Republicans, and it still hasn’t been enough.
This doesn’t absolve Democrats from blame for playing politics with the debt ceiling, as Harry Reid did back in December. But doing that eight months out, on the mistaken calculation that any reasonable Congress would dutifully pass the increase and share the political blame, is orders of magnitude different than doing it days out, much less giving off the real possibility that you’ll actually call the other side’s bluff and let us default.
The lopsided blame here is not partisan. It’s not right or left. It’s the truth. Report it.
(snip)
http://www.cjr.org/the_audit/debt_ce...och_videos.php
