Here’s more evidence that the debt deal made last night by Obama and the Republicans is a farce.
The deal would immediately increase the US federal government’s debt limit by $2.2 trillion, while promising to cut $2 trillion in spending over the span of 10 years. But even those cuts are illusory as an AP story by Christopher Rugaber, “Small Spending Cuts to Have Little Economic Impact,” points out:
The first phase of a deal to raise the government’s borrowing limit would pose little threat to the economy in the short term because almost none of the spending cuts would occur before 2014.
Discretionary spending, which excludes Social Security, Medicare and Medicaid, would be cut by $21 billion in 2012 and $42 billion in 2013, according to an analysis by the Congressional Budget Office. That’s a small fraction of the nation’s $14 trillion economy.
[…] The first phase of cuts would reduce spending by $917 billion over 10 years. A congressional committee would decide on a second phase of cuts totaling $1.5 trillion.
Did you get that?
When we were told last night that the debt deal would cut federal spending by $2 trillion over a span of 10 years, it turns out the “10 years” time-span is for only $917 billion of that $2 trillion! Allow me to translate the Obama-GOP debt deal to you:
- America’s debt limit will immediately be increased by $2.2 trillion.
- Spending cuts will only be $917 billion over the next 10 years, presumably beginning with:
- $21 billion of cuts in 2012 (not 2011, but next year!)
- $42 billion in 2013
Given the fact that 2012 is an election year, the plain truth is that we can only count on $21 billion in spending cuts.
John Boehner’s original debt plan, which I had called a “voodoo” proposal, was to reduce federal non-defense non-discretionary spending by $24 billion — which amounts to less than 5% of the federal government’s total ($491 billion) non-security discretionary spending in FY 2010.
The Obama-GOP debt deal’s spending cut of $21 billion next year amounts to 4.27% of total non-security discretionary spending in FY 2010!