So there is a deal to keep the government from shutting down; certainly, that is no surprise. Politicians are masters of the last minute deal when they have no choice but to act. There are a number of important points to be made about this entire episode.
1) The roughly 40 billion dollars of cuts for the current fiscal year is a much bigger deal than most people think. First of all, these are actual cuts, not just a slower growth rate that is called a "cut" in Washington parlance. These cuts lower the baseline budget and, using the ten year budget that is now common in Washington, will reduce spending over the next decade by about half a trillion dollars.
2) The Republicans in the House deserve major kudos for changing the nature of the debate in Washington. Instead of the usual kick the can down the road nonsense, the GOP demanded cuts, stuck to its guns and got the Democrats to succumb to major budget cuts. These are the same Democrats who just six weeks ago proposed a budget for 2012 that had large increases in spending. These are the same Democrats who began the discussion in February about the current budget year with an offer to give up increases for the year but not to have any cuts. So the GOP pushed the debate to significant spending cuts and defunding of certain programs.
3) President Obama has conducted himself ina rather shabby manner through this debate. First, Obama sat on the sidelines for months without engaging in the discussion. Only in the last few days has the president actually gotten involved. If the president had decided to play golf a few less times and instead to meet with the congressional leadership to discuss getting the current year's spending agreed to, we might well have seen a decision reached long ago. Indeed, without a true leader on the Democrat side, there was always some confusion as to exactly what their position was. Obama had a chance to lead and he did not do so. Second, the determination as to who still gets paid during the "shutdown" lies with the president. Obama used this power to put the men and women of the armed forces into the group that had to continue to work but who would not have gotten paid in the event of a shutdown. It is absolutely despicable that Obama used american military personnel as pawns in a political battle about spending. Third, Obama has made repeated speeches in which the words he read from the teleprompter made him sound as if he were above this discussion. The truth is that Obama's speech writer did not understand the simple fact that the president is an integral player in this drama. As part of the cast, he cannot decide to sit out all of the action.
4)The big spending battles are now about to begin. The cuts proposed by the GOP budget for 2012 are over ten times greater than those included in today's agreement for the remainder of 2011. It will be more than interesting to see how this battle plays out.
5) Finally, it should be noted that not only did the GOP do well, but the Democrats truly shot themselves in the foot in connection with the entire budget for 2011. The Democrats easily could have passed a budget last summer or fall at a point when they had huge majorities in both houses of Congress. The Dems chose not to do this so that they could hide their spending habits during last november's election. Everyone knows that the failure to pass a budget did not save any seats for the Democrats, and it gave the GOP a chance to change the spending trajectory once the GOP won control of the House. Further, since the Democrats never adopted a budget last year, the were barred from using reconciliation for taxing and spending matters. This meant that during the debate over extending the Bush tax rates last December, the Democrats needed 60 votes in the senate to pass a bill rather than the 50 that would have been necessary if reconciliation had been available. In truth, continuation of tax rates for those in the upper brackets and the social security payroll tax reduction for 2011 would probably never have been passed but for the Democrats' spineless decision to avoid passing a budget.
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