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Obama Floats the Inevitable -- Debt Deal With All Cuts, No Revenues

July 21, 2011 - by Donny Shaw

If this NYT report is accurate, then congressional Democrats, led by the Obama Administration, are lined up for another epic cave in. The Republicans, on the other hand, are looking poised to score yet another big victory. First, the Bush tax cuts extension, then the 2011 spending bill cuts, and now a debt-ceiling deal that would reduce the deficit entirely through cuts to social spending.

The Obama administration has informed Democratic Congressional leaders that President Obama and SpeakerJohn A. Boehner were starting to close in on a major budget deal that would enact substantial spending cuts and seek future revenues through a tax overhaul, Congressional officials said Thursday.

With the government staring at a potential default in less than two weeks, the officials said the administration on Wednesday night notified top members of Congress that an agreement between the president and Mr. Boehner could be imminent. The Congressional leaders, whose help Mr. Obama would need to bring a compromise forward, were told that the new revenue tied to the looming agreement to increase the debt limit by Aug. 2 would be produced in 2012 through a tax code rewrite that would lower individual and corporate rates, close loopholes, end tax breaks and make other adjustments to produce revenue gains.

Officials knowledgeable about the conversations between the administration and Congressional leaders said the details of the potential package remained unknown but they presumed it would include cuts and adjustments in most federal programs, including Medicare.

So, debt ceiling goes up in exchange for trillions of spending cuts ($3.5 trillion according to Swampland) and lip service on tax revenues in the future. Because, you know, raising taxes and closing loopholes is going to get way easier after this. Right. As an aide who spoke with TPM on this said, the deal is “all cuts,” “maybe some revenues in the future.” 

Of course the White House and Boehner’s office are denying that any such deal exists. But this is just too believable to dismiss. With both the McConnell-Reid plan and the bipartisan Senate plan basically dead for their own reasons, how else could this play out? We know that a deal needs to be struck now in order for legislation to be drawn up and passed before August 2. It’s crunch time, which means it’s time for the Democrats to roll over. Just another sign here that if there is a progressive movement in the U.S., the Democrats in Washington, D.C. are not feeling it.

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  • rczar 07/21/2011 6:39pm

    It is about time that this President AND this Congress start listening to the people who are footing the bills!

    Leadership has been lacking in both places, especially at the helm where no budgets and no written proposals to compromise have been offered.

    For more on this lack of leadership check: “Administration Sleeps…”
    at: Sleepless and Tired

  • b58 07/25/2011 9:05am

    I think we have a POTUS that is totally mentally unstable. He think we can raise the debt limit and keep spending to get this country out of it’s mess. I am old enough that it never worked for me to keep spending when I was broke and out of money. He even thinks raising taxes and keep spending will lower the debt. If congress and SCOTUS don’t repeal Obamacare this country will really be in trouble as far as the debt goes. It is time to pass the CUT CAP AND BALANCE bill with or without Obama, Reid, and Pelosi. The speaker of the house is willing to cut the waste, fraud, and duplicate spending and balance the budget and lower the tax base to put people back to work. It is not hard to see that the POTUS is trying to take this country down a dead end road to nowhere. I have faith that the house will pass the cut cap and balance bill and stop the scare on SS and medicare and our homeland security.

  • Naame 07/25/2011 5:04pm

    If the House wanted to listen to the majority of the American people it would never have come to this proposal. Most Americans want to see a combination of revenue increases and spending cuts.

  • concernedvoter99 07/26/2011 2:58pm

    Why do I keep hearing tax increases called revenue increases. The government is not a private business and shouldn’t have “revenue”. If they want to run like a private business they need to bring in a large team of accountants to audit them and cut all of the wasteful spending that has been occurring for the last 20 years.

    How much of the governments “revenue” goes to foreign aid? Could we tell these countries we are broke and quit sending them money?

    How do government jobs truly stimulate the economy. All its doing is recirculating tax dollars on predominantly temporary jobs. We need to loosen regulations and red tape on the private sector to create long lasting jobs and tax dollars that haven’t already passed through the government.

    Both Speaker Boehner and the President seamed to be just scratching the surface of the problem and more concerned with the upcoming election than the skyrocketing debt, poor economy, and high unemployment.

  • fakk2 07/26/2011 3:57pm

    Hey Luminous,

    Remember how we were discussing whether or not a pedestrian is at fault for crossing a street outside the crosswalk? Evidently Georgia agrees with me. I don’t like the situation surrounding this accident, but I can see why they make crosswalks.

  • Spam Comment

  • richarddelta 01/22/2012 5:28pm

    All cuts no revenues, great title… Great info.
    Best Generator

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