To begin with, let's go over exactly what is in the deal.
1. $2.4 trillion in cuts up front; mainly from reduced spending on the wars and decreased interest on the debt, the so-called "accounting gimmicks" the GOP hates so much.
2. A 12 member bi-partisan fiscal commission to determine another $1.5 trillion (approximately) of cuts.
3. Self executing extension of the debt ceiling through the end of 2012.
4. Triggers; automatic cuts, 50% to defense, 50% to other domestic programs including to medicare providers as a fraction of that pie, but Social Security is exempted totally.
5. House GOP gets another crack at a balanced budget amendment. (Good luck).
You can see full details about the deal, from a Republican perspective, from the Speaker's slides, which are available here:
Now, what do Obama, and you, gain from this:
First and foremost, you gain a long-term debt ceiling extension. For fiscal stability, our credit rating, and economic growth in the future, this had to happen, and it had to be in a bi-partisan way. I know many of you cowboys on Daily Kos wanted POTUS to go the constitutional route; I did too. But it's a bad idea because it would merely be trading a constitutional crisis from an economic crisis and, most critically, would not restore investors confidence in U.S. credit. This is a far better outcome.
Second, Obama was able to define the terms of the debate going forward. While he may not have been able to convince a majority of Republicans in congress that taxes have to be raised, he won in the court of public opinion. Americans get that we need to raise taxes, particularly on the wealthy and big business, in a way they never have before, and a majority favor it (including even a few Republicans). Imagine you are Obama's eventual opponent in the Presidential. You have to take a position on the commission's findings and the nation's choices going forward. You probably have to continue advocating for tax cuts and budget cuts. Meanwhile, Obama and the Democrats still have their social program talking points, because Obama did not meaningfully concede on those programs. The majority of Americans have made clear that they prefer the latter approach. It's a good position for a Democratic candidate to be in.
Third, the GOP has been shown up for what it is, an extremist party out of step with the majority of Americans. We all benefit from the comparison.
Fourth, this plan does contain revenue enhancements, just by another name. Here's why:
(a) the commission will realistically have to consider them, if it is going to have any credibility and reach a result that can pass both houses of Congress;
(b) the sequestration is itself a revenue enhancement. As a former military member, I can tell you from personal experience that the military industrial complex, from the bombers made by Boeing and Lockheed Martin to the Burger Kings on and around the bases is huge. It is as much an "entitlement" program for those associated with the military as Social Security and Medicare are to everyone else. If these cuts occur, a major GOP constituency will be in a world of hurt, but the funds will be freed up for other programs. Same with the Medicare cuts. Notice that they are cuts to providers, not beneficiaries. I know many people think this is not a meaningful difference, but it is, because Medicare is the providers' bread and butter, and there is a limit to the degree to which they can pass those savings along. Again, it's revenue that is mostly fattening up an industry, and cutting it means it can be used elsewhere more efficiently and;
(c) the expiration of the Bush tax cuts are themselves revenue enhancements, Obama gets the final vote on whether this occurs. It's not in the deal.
If you go to Redstate, you will see that they do not like this deal any more than you do, and for all of the reasons outlined above. They feel as though they have lost, and they are right. They wanted to instigate a default, and they did not do that. They wanted to cut Social Security, and they did not do that, they wanted another opportunity to fight this battle, and they did not get that. What they did get is that major GOP constituencies (defense and corporate health providers) have been put in jeopardy of major cuts, and from our perspective this is a good thing. What they also got is a damocles hanging over their head in the form of the soon to expire Bush tax cuts, which Obama can blackmail them with just as they did all of us with the debt ceiling.
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