Wednesday, June 8, 2011
Policy and Debt Collide
After failing to pass a "clean" debt vote, Republican's in Congress are looking for a compromise. The Hill reported today that Senator Jon Kyl said "the GOP would look to a shorter-term increase in the debt ceiling if the talks fail to produce more than $2.5 trillion in cuts." The Treasury has been dipping into reserve funds to forestall the worst case scenario, but those funds will run out in July, and it looks like the GOP is still willing to play politics until the very last moment.
It left me with two questions. 1) What is Kyl thinking? $2.5 trillion worth in cuts?! In a time where most states are strapped for cash Republican's have decided that cutting social programs that millions of American's rely on is OK by them.
Plus, what is a "short term" increase? Congress has voted to raise the debt ceiling every year for the past decade. If the time period is any shorter than that, it means the Republican's aren't kicking the can down the road, they're crushing it.
If you're a politician, the rule of thumb you follow in any crisis is to do no harm. Well, many families are in a crisis right now, and by not raising the debt ceiling Congress will be doing them harm. All the positive "estimates" that economists made for 2011 will be wiped out because, as the U.S. is already broke, there won't be any room to make the investments it needs to execute programs that will help create jobs or make sure families are taken care of. As the majority of the debt is for paying programs such as Medicare and Social Security, asking for $2.5 trillion in cuts means these vital programs will be a part of it.
2) Can the Republican's do math? Even though the Congressional Budget Office has stated numerous times The Affordable Care Act will reduce future deficits, all the GOP talks about is how it will ruin America. But as it will help our fiscal situation, it also saves lives. The law forbids insurance companies from saying no to certain medical treatments, and giving parents the ability to keep their children insured under their plan until they are 26. It also includes tax credits for small businesses, and makes sure seniors can pay for their prescription drugs. I'm not making this up.
But politics has succumbed over policy once again. The Affordable Care Act is better known as Obamacare, and recent polls show 47 percent of American's do not want the debt ceiling raised. A Pew study also found the majority of people are not in favor of raising taxes or cutting benefits. But this is not because they are irrational people, it's because they don't have enough information. Our "leaders" in Congress are supposed to tell us what we need to know so we understand the actions they are taking. Instead, it has become a battle of words and trying to figure out which ones will position their party or candidate to win the next election. Instead of calling them out on it, the media focuses on it and polls the candidates that don't even try to have credibility.
If the emergency funds run out and the debt ceiling isn't raised, it means America will have to default on its loans, leading to an even worse economic down turn than the one we're still recovering from. President Obama has said his decision to vote against raising the debt ceiling while still in the Senate was a mistake; it's the Republican's turn to stop playing politics and deal with the matters at hand.