« Brad DeLong: America’s Locust Years | Main | links for 2011-07-30 »

Saturday, July 30, 2011

A Spending-Only Trigger?

The negotiations over the debt ceiling and the deficit appear to be stuck on the issue of triggers. Specifically:

Look closely at the Reid and Boehner bills. The first round of cuts are pretty much the same. The joint congressional committee charged with recommending further deficit reduction is pretty much the same. The difference is that Boehner’s bill forces them to act. He ties a future increase in the debt-ceiling to the successful passage of their proposal. Reid’s bill has no such trigger. ...
Most think the likely compromise is a trigger that would impose automatic, across-the-board cuts in spending if the committee fails in its mission. But Senate Democratic leadership isn’t so sure. They worry that a spending-cuts only trigger is heads, Republicans win; tails, Democrats lose. ...
The White House proposed a balanced trigger in April: It would have automatically raised taxes and cut spending if America wasn’t on a path to balanced budgets by 2014. ...

But at this point there's no way to be sure that the White House will hold firm on their insistence that any trigger be balanced:

But privately, they’re less concerned about a spending-only trigger, which was seriously considered during their negotiations with Boehner.

If the Democrats want any claim whatsoever that this deal was not completely one-sided, there has to be at least has some weight on the other side of the scale. That is, tax increases must to be part of the agreement. (Using the word balance when the weight on the scale is so uneven, perhaps even piled entirely on one side, doesn't seem correct. The final deal won't be balanced in any case).

It's pretty discouraging to see Democrats trying to sell such a large defeat as a victory (we only lost half the farm!).

[I'm about to head to the land of no internet connections for awhile today, and it will be good to get away from the frustrating news for a few hours.]

    Posted by on Saturday, July 30, 2011 at 09:45 AM in Budget Deficit, Economics, Politics, Taxes | Permalink  Comments (40)


    Feed You can follow this conversation by subscribing to the comment feed for this post.