Its a deal!

It’s a deal…..

It’s a bad deal, but a deal none the less.  Here is a quick breakdown of what is in the bill. 

·         Debt Ceiling is raised through 2013

·         Over $900 Billion in cuts over the next 10 years

·         Only $22 Billion in cuts before 2013

·         $350 Billion of the $900 Billion in cuts come from Defense over the next 10 years

·         Zero cuts to Medicare, Medicaid, Social Security

·         Establishes “Super Congress” to find additional $1.5 Trillion in deficit reduction

o   “Super Congress” will consist of 6 Republicans and 6 Democrats

o   Increased revenues and entitlement reform ARE an option for deficit reduction

o   Congress MUST vote on recommendations of “Super Congress”

o   If the “Super Congress” can not agree to deficit reduction or congress does not pass the “Super Congress” recommendations “triggers” are in place to automatically kick in.

§  “Triggers” are automatic pre-agreed spending cuts which are designed to encourage a deal

·         “Triggers” are an automatic $1.2 Trillion in spending cuts

o   50% of 1.2 Trillion will cut Defense spending

o   50% of 1.2 Trillion will cut Domestic spending (Social Security, Unemployment, Medicare, Medicaid protected from cuts)

Well that’s the down and dirty of the debt deal. Unfortunately this agreement did not and will not really accomplish anything in long run.  Republicans kicked and screamed that they would only raise the debt ceiling if they got an equal/greater amount in spending cuts.  Well they got their spending cuts, but it’s over 10 years and the debt ceiling is only raised through 2013, so was that really worth all the drama?  Did the deficit get any significant reduction? No, and this is why no one is claiming victory in the debt deal; both sides understand that this deal stinks.  Congress didn’t really accomplish anything; they did the bare minimum to squeak by….as always.

Look it’s a bird, it’s a plane, no its…“Super Congress”….

This “Super Congress”, which reportedly will include 6 Republicans (3 from each House of Congress) and 6 Democrats (3 from each House of Congress) has ZERO chance of successfully reaching a bipartisan agreement for a few reasons.  One reason being, we have done this before with no results.  Remember the President has already appointed his debt commission, and what happened? Both parties ignored their findings and recommendations.  Then there was the “gang of six” a bipartisan group of congressman who put forth a deal which again failed; however this time the “gang of six” proposal was embraced by the White House but failed to get any traction with Republicans because of their RIDICULOUS tax pledge.  Which is another reason why the “Super Congress” is doomed to fail; unless Republicans are willing to increase revenues, and democrats are willing to alter entitlements, serious deficit reduction will remain out of reach.  However if you still need further proof of the inevitable failure of the “Super Congress”, keep watch of who gets appointed to serve on this committee.  Will members of the “gang of six”, who have already agreed to a compromise, have an outlined bipartisan plan and could really put the “Super Congress” down the right path, be appointed or will more partisan hard line members be selected? Do you think John Boehner will appoint House Republicans who are willing to compromise on taxes? Will Harry Reid appoint Senate Democrats that are willing to put entitlements on the table?  The appointments of who will be on this “Super Congress” will signal to the American people whether our political leadership is serious about finding a solution or if they just want to play politics till the 2012 elections. 

UPDATED: 8/5/2011

If you needed more proof that the debt deal was a bad one, the stock market took a nose dive losing 512 in one day, this was the 9th day in a row of falling stock market numbers.  The 512 point loss on Thursday in the markets wipes out all gains made in 2011.  It appears that the only numbers on the rise is Congress's DISAPPROVAL ratings.   

	Approve	Disapprove	Unsure
CNN/Opinion Research	14%	84%	2%

UPDATED: 8/8/2011

Markets responded to the S&P downgrade on Monday with even more massive sell offs, leading to a single day stock market drop of 632 points.  In the last two weeks markets have hit lows not seen since the economic collape in 2008.