Today’s debt ceiling compromise has been reported as a Tea Party victory. You can tell because the more impotent the White House is, the more important they make the threat. The Obama campaign loves this plan because they can use cuts to Medicare as a rallying cry to put Democrats back in Washington. It might even make up for all the Medicare money stolen by Congress in Obamacare. The left hated this bill, the right hated some of the bill and a broad coalition voted for this bill. Believe me, that coalition got exactly what they wanted.
First, let’s look at the cuts. There are currently $900 billion in scheduled baseline cuts. That means $900 billion will be taken out of the budget for the next 10 years. Assuming the budget remains at $3.7 trillion, that would be $37 trillion in spending and another $7 trillion in debt service (at least). We’re talking about 2.5% of the total budget for the next decade. $350 billion of that will be in defense. None will be in Social Security and the only Medicare reductions will be to providers. Let’s see, $600 billion from the 81% of the budget that is not defense comes out to 1.6%.
Now, there’s the Super Congress. It’s like the Gang of Six on steroids. This is where the real problems will begin. They have the power to reduce the deficit by $1.5 trillion through any means necessary. They could start slashing from things like Medicare. They could also reform the tax code to reduce loopholes. They could go the other way and put in taxes to offset cuts. Still, no budget actions take effect until after the 2012 elections.
This is a victory for Republicans like John Boehner, not Michele Bachmann. It’s the same accounting that turned a $36 billion cut into $352 million taken out of the budget. He gets to look like he beat Obama. Fear of the Republican Congress spreads throughout the land. At the same time, Democrats put the enemy into sharp focus. Instead of painting all Republicans (which many voters identify with) with a broad brush, they can heap their abuse on the Tea Party. This vote was a vote for inertia and the way things are always done in Washington. It’s an amplified debt ceiling vote, where fools like half-term Senator Obama can bitch about government spending and vote against the ceiling increase because he got a hall pass from Nancy Pelosi that year.
The conspiracy isn’t that some group did something, it’s that nothing really changes no matter what they made you think.