A Difficult Vote vs. Definite Default
In the dozen or so media interviews about the highly controversial bipartisan compromise to raise the nation’s debt ceiling, interviewers have been far more interested in the fact that I was the only New York City Democrat who voted yes than in what is actually in the bill. They seemed surprised by my comment that I do not base how I vote on how others are voting, but on whether or not a bill serves the interests of my district and is good for the country.
Even though 94 other House Democrats and 45 Senate Democrats agreed with me, while 95 House Democrats and 6 Senate Democrats did not, some commentators seemed surprised when I argued that the achievements of the Budget Control Act of 2011 outweigh its deficiencies.
Liberal critics of the bill contend that President Obama and the Democrats whose support supplied the margin for passage in the House “surrendered to hostage takers” (the House Republicans — many of them Tea Party Republicans — who tied raising the debt limit to cutting “trillions” in federal spending and refused to consider revenue increases under any circumstances). This argument works only if context and facts are left out.
Remember that the House vote occurred a scant 30 hours before the August 2nd deadline for raising the debt limit. The Senate voted the next day with about 10 hours to go. The President signed the bill into law with only 6 hours left.
If Congress had failed to act, the U.S. government for the first time would have defaulted on its debts. The results would have been catastrophic.
For example, the federal government’s August commitments exceeded $306 billion with only $174 billion in expected revenue. Without the legal authority to borrow the funds to make up the difference, although the federal government could have paid the interest on the national debt and covered its monthly Social Security, Medicare, and Medicaid commitments, it would have had nothing left to pay veterans’ benefits, vendors, contractors, or fund federal agencies.
Default would have jeopardized the “full faith and credit” of the U.S. government. Interest rates would have gone up for every level of government, every American with a credit card, car payment, mortgage or student loan, and for every business that relies on a line of credit to meet payroll and operating expenses. Pension plans would have been devastated.
There were no alternatives to the compromise bill that could pass both houses of Congress. Congress could either pass this bill or allow America to default.
Is it a perfect bill? Does it include everything I wanted and exclude everything I oppose? Like every bill to come up for a vote during my 13 years in Congress, the answer is no. But, did it raise the debt ceiling, avert default, protect key entitlements, and stop House Tea Party Republicans from repeating their hostage-taking performance during next year’s election? Yes.
In return for raising the debt ceiling by $2.4 trillion over the next 18 months, President Obama and a majority of congressional Democrats agreed to cut defense and non-defense federal discretionary spending by a similar amount over the next ten years. The bill outlined $900 billion in cuts. The remaining $1.5 trillion in cuts will occur through a joint House-Senate committee process.
True, the bill does not include revenue increases. Instead it empowers a Joint Select Committee on Deficit Reduction to put everything on the table in proposing additional cuts: entitlement programs; defense and non-defense discretionary spending; and revenue increases, including reforming the tax code, closing tax loopholes, and eliminating tax subsidies for corporations and special interests.
This 12-member committee consists of three members from each party from both the House and Senate. In my view together with an enforcement mechanism also contained in the legislation, this committee creates a dynamic that will pressure both sides of the aisle to grapple with America’s fiscal reality and very well may become a vehicle for the kind of “grand bargain” President Obama has been seeking. How?
The committee must recommend $1.5 trillion in additional cuts to the full Congress by November 23 of this year. Congress must hold an up or down vote on the recommendations by December 23 of this year.
If the committee fails to reach an agreement or if Congress rejects its recommendations, an enforcement mechanism triggers across-the-board defense and non-defense spending reductions beginning in 2013. Half of the cuts must come from domestic programs and half from defense.
Social Security and Medicare benefits, other low-income programs, and Pell grant funding, are largely protected. Unlike the debt ceiling vote, the second round takes place on a level playing field of equal representation of Democrats and Republicans outside of the regular appropriations process.
This unique process which President Obama and congressional Democratic leaders insisted upon checks the power of the most extreme faction of House Republicans and the House Republican majority. It also offsets the filibuster that Senate Republicans have blatantly used to obstruct the President’s agenda.
The joint select committee, the up or down vote, and enforcement mechanism could and should help Democrats and Republicans who are open to a balanced compromise succeed in reducing the deficits in our budget and our politics.
Congressman Gregory W. Meeks represents the Sixth Congressional District of New York and sits on the House Committee on Financial Services and the House Foreign Affairs Committee.