While the debt deal reached by Obama and Congressional leaders for the US federal budget/debt ceiling debacle has yet to pass through Congress (and given how some Tea Party members vowed to not raise the debt ceiling under any circumstances, nothing is final until it is, well, final), it does look like there should be enough support from Congress to hammer the deal through, considering time is about to run out.
This entire fiasco has proved that Congress is getting more dysfunctional by the day. In the last elections, under increasing scrutiny towards the rapidly increasing federal debt, Americans voted in idealogue Tea Party Republicans to manhandle the budget and reel in spending. It is amazing, many months later, how much power this minority of elected repreentative and grassroots movement holds in Washington.
In revisiting this mess, it's important to understand some things. As of today, the wars in Iraq and Afghanistan have cost the US government around $1.3 tillion.
The fabled Bush tax cuts that still exist to this day?
Run that through your head a bit; the Bush tax cuts, of which there isn't a single shred of evidence that they spurred economic growth, have cost the US more money than the Iraq and Afghanistan wars doubled.
The tax cuts ended up being one of the single most costly economic pieces of legislation in years, and a perfect example of the Republican "starve the beast" policy, in which Republicans seek to slash revenue to block federal spending and create budget crunches to stranglehold the social safety net. No, this is not a conspiracy, it was expressly advocated by George Bush and more recently, Sarah Palin.
Fast forward to 2011, and with most moderates kicked out of Congress, the debt ceiling deal was increasingly held hostage by right-wingers who pledged against a single dollar in increased taxes, and wanted to see massive cuts. The Tea Party demographic had already hurt the economy once before; by rallying against stimulus plans that, while they didn't keep unemployment under the rate that Obama and the Democrats shot for, did save jobs across the country and prevent the recession from being worse. Most economists who realized that government spending is often the best way out of an economic downturn (see the Great Depression for an example) said that the stimulus wasn't big enough.
But then what? How do we fund it? Our debt is admittedly very large. Why not put the Bust tax cuts on the table? Their biggest rate of deductions was for the upper class, so why not slash them a bit to get some revenue and allow for some more financial wiggling room?
But it wasn't an option. Republicans protested, and now, with the debt ceiling crisis occuring, the Tea Party representatives even rebelled against other conservatives, threatening to cause a debt default in the name of their ideology. Even conservative House Speaker John Boehner seemed frustrated at the inability to wrangle his own party under his guidance.
And what did we get out of all of this? A terrible deal. No tax increases, massive spending cuts, and a "compromise" that will anger all parties; social conservatives for cutting defense, social liberals for cutting programs, fiscal conservatives for not enough cuts, fiscal progressives for no new taxes. Discretionary spending, which things like education and job training fall under, will be at its lowest point in over 50 years. Financially struggling states will be under an even greater burden now, with expected increasing class sizes, and decreasing public security jobs and infrastructure work.
Obama deserves blame here for letting his foot off the gas. While nobody wants a default (well, except for maybe the Tea Party, of whom many claimed that Obama's concerns regarding default was merely fear-mongering), he let himself and the Dems get manhandled by the conservative bloc. Poll after poll had the public on Obama's side, with more anger directed at Republicans. US citizens supported a mixed bag of cuts and taxes.
The Republicans had the deck stacked against them. Anything but a deal with no taxes would have been seen as a loss. Tax increase? Loss. Default? Loss for both sides, but more blame on Republicans.
So what did Obama and the Dems do? Let them win. Blinked first. Gave in. Understanding how difficult it was to play with fire, the Tea Party bloc is still a minority in the House, and almost nonexistant in the Senate. Just like the Health Care legislation that Obama let the Republicans dictate, he let them control the field of battle here and spread their ideology. He doesn't have the spine to hold his own head in place.
Even more traditionally right-wing journals like the FT and Economist endorsed tax increases as vital for long term financial stability. Cuts alone won't get us in balance, there simply isn't enough tax revenue. Corporations like GE pay 0 dollars in income tax each year. These journals endorsed the 83:17 cuts to taxes ratio put forward by the Dems, saying it was farily close to what they, as traditionally fiscal conservative policy people, saw as optimal.
It will be interesting to see if this deal gets through the Senate and House. The Senate is probably a given, but the Tea Partiers in the House are the wild card. It's hard to imagine them passing up on a compromise heavily tilted in their favor, but with these folks, nothing is certain.
At least we got some minor (key word; minor) defense cuts, but Americans here got ripped off. The average man will suffer. The Republicans prove that they are truly the ones in power, even when they are not.
And Obama? You can forget those hopes and dreams... I just want some change. .