Today, the House rejected the Senate’s debt limit plan which effectively ignores months of negotiations to call for higher taxes, eschews spending restraint and offers no redress for the country’s debt crisis. Rather than begin work on the House-passed solution, the Senate is expected to wait until Sunday to vote on its bill. Amongst other things, the Senate bill:
- Continues to excuse the Senate’s dereliction of its budgeting duty by “deeming” budget resolutions for the next two years. This locks in current projections on spending and revenue, increasing the hurdles for enacting positive tax reform.
- Establishes a Joint Committee tasked with reducing the deficit, rather than reporting real savings, as it would have been required to do under the House plan.
- By focusing on the deficit, rather than spending, the Committee is directed to undertake tax reform and explicitly encouraged to consider existing proposals, such as the bipartisan tax-hiking Gang of Six plan.
- The Committee’s proposal is not tied to another debt limit increase, greatly reducing its incentive to produce workable solutions that could net support in both chambers of Congress
- Grants the President the largest debt ceiling hike in history to continue his spending spree, uninhibited by a debt ceiling. The Senate bill increases the debt ceiling by $2.4 trillion, eliminating any ability to restrain the President’s spending agenda until after the next election.
- Eschews real spending restraint by including numerous loopholes that allow Congress to flout the statutory spending caps. The bill ordains that during "times of slow economic growth" spending limitations need not be recognized, regardless of the fact that that is when the country needs it most. It also continues the practice of designating spending as “emergency” spending to surpass limits.
- Fakes it to Make it: Reid attempts to take credit for $1.2 trillion in savings that are already slated to happen with the troop drawdowns in the Middle East. Thus, the number of cuts the bill actually enacts is less than $1 trillion.
- The bill rejects the basic principle of cutting more than it spends by giving the President $2.4 trillion in new borrowing authority in exchange for less than $1 trillion in real spending cuts