Ending a perilous stalemate, President Barack Obama and congressional leaders announced a historic agreement Sunday night (07) on emergency legislation to avert the nation’s first-ever financial default.
On August 1, the House approved a compromise deal to raise the debt limit in a 269-161 vote. The bill, which was brokered Sunday night in last-minute negotiations between the White House and congressional leaders, passed with the support of 174 Republicans and 95 Democrats.
Among Connecticut’s all-Democratic contingent, Reps. Joe Courtney and Jim Himes, who represent the 2nd and 4th districts respectively, both voted yes. Rep. John Larson, Rosa DeLauro and Chris Murphy, who represent the 1st, 3rd and 5th districts, all voted no. On the following day, the Senate also passed the bill, clearing the way for President Obama to sign it into law.
The final vote was 74-26, including Connecticut Senators Joe Lieberman and Richard Blumenthal. Nineteen Republicans, six Democrats and independent Bernie Sanders of Vermont opposed the measure, which cuts $2.1 trillion in federal spending while increasing the amount the government can borrow to pay its bills.
A deeply frustrated Obama, while praising Congress for finally passing the compromise bill, demanded legislators immediately turn their attention to fixing the economy and creating jobs.
“We’ve got to do everything in our power to grow this economy and put America back to work,” he said in a press conference held shortly after the Senate voted to pass the measure.
Obama also said he was not giving up on his insistence that Congress allow taxes to be raised on big corporations, through an end to loopholes, and the richest Americans once both houses return from their summer recess in early September. The measure that now becomes law relies wholly on cutting spending as a tool for lowering the U.S. deficit.
“We can’t balance the budget on the backs of the people who’ve borne the brunt of this recession,” the president said. The Deal
The deal to raise the debt ceiling reached by President Obama and congressional leaders averted the immediate crisis. It will keep the country out of default and reduce deficits by at least $2.1 trillion over a decade.
Below is a summary of the major provisions of the debt ceiling deal:
-It allows the debt ceiling to increase by as much as $2.4 trillion dollars in total. Included is an immediate increase of $400 billion dollars. President Obama would be permitted to request another $500 billion increase in the coming months, which Congress could vote to disallow by a veto proof two-thirds margin. A further increase of between $1.2 trillion and $1.5 trillion would be available after a special committee identifies matching levels of additional spending cuts.
-It calls for cuts of more than $900 billion in spending over ten years from programs, agencies and day-to-day spending.
It would include security-related and non-security-related cuts. According to the Congressional Budget Office, “discretionary” spending would be decreased by $21 billion in 2012 and $42 billion in 2013.
-It creates a 12-person House and Senate special committee to identify further spending cuts. The committee must complete its work by Thanksgiving – November 23 – and Congress must hold an up or down vote on the committee recommendations by December 23. The committee could overhaul the tax code or find savings in benefit programs like Medicaid, Medicare or Social Security. Congress would not be able to modify the committee’s recommendation. Another $1.5 trillion in cuts would be achieved one of two ways. If the committee can’t agree on an additional debt-redu-ction package, then automatic spending cuts will be triggered, split evenly between defense and domestic programs. Regarding three programs that Democrats have long wanted to protect, the triggered cuts would not impact Social Security or Medicaid; as for Medicare, any triggered cuts would hit providers, not beneficiaries.
The automatic cuts are intended to serve as an “enforcement mechanism,” a sword hanging over the committee’s head spurring them on to an agreement and to winning full congressional approval.
-It requires that the House of Representatives and the Senate vote on a Balanced Budget Amendment to the Constitution, although its passage is not guaranteed.
Pell Grants and student loan programs. Pell Grants will receive a $17 billion increase for lowincome college students, which will be financed by the elimination of subsidized student loans for most graduate students.
-It does not include any immediate revenue additions or tax increases. Nation Disapproves A CNN/ORC International poll released in the first week of August revealed the nation’s displeasure with congressional leaders. Eighty-four percent of the nation disapproved of the way Congress is handling its job in the poll; only 14 percent approved.
But the country is split over how the president is handling his responsibilities in the White House.
Forty-eight percent said they approve of how President Barack Obama is handling his job and 47 percent disapprove in a CBS News/New York Times survey. The poll indicates that it’s difficult for everyone to be pleased with the debt-ceiling deal. The country is split over the outcome, since 46 percent approve of the agreement and 45 percent disapprove.
Looking to the future, congressional members may be spending some time at home making amends: 75 percent of the country feels that most members of Congress do not deserve to be re-elected and 15 percent say they do.
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