Nearing the August 2nd deadline that the President has suggested will very nearly be the end of the world (or at least, the global market) if officials don't come to an agreement on the debt ceiling, several proposals have been submitted to Congress for review. Here's a breakdown of the top contenders:
This seems to be Obama's favorite. It's simple, to the point, and vague. Step one is to make spending cuts and tax increases to yield a $500 billion reduction in the federal deficit. Which sounds fantastic, but the plan lacks specifics. Where will the cuts be made? How much will taxes be raised? Obviously, Congress needs to make spending cuts, but the debate over what to cut has been dragging on for months. (Years, really, but who's counting?) Step two is to impose spending caps on discretionary spending. Which portion of the discretionary spending they're referencing, no one knows. Step three promises to enact a law in the next six months that will lower the individual and corporate tax rates to 29 percent, as well as raise taxes overall by $3.4 trillion over the next 10 years. That would be quite a feat. What is interesting about this bill is that it doesn't even mention the debt limit; however, even President Obama is sure that the 'Gang of Six' intended the goal of this plan to ultimately be an increase in the debt limit. Bravo.
This plan doesn't even require sarcasm to show its flaws. Senate Republican Leader Mitch McConnell of Kentucky thinks Congress should let President Obama request a debt ceiling increase with different spending cuts in three different sets of votes. Advantages? Nobody can get blamed for the outcome except President Obama, as the Congress would need a two-thirds majority vote to disapprove the request. Disadvantages? The complete power of this vote decision would fall on the President and there is a chance the outcome would be a debt ceiling increase with no spending cuts. Some Republicans are actually supporting this route because it means a lot of them could vote against the increase even though the increase would go through, and then they can sit back and tell the Democrats, "I told you so." Or, at least, that's their back-up plan if things go wrong. Real mature. (Okay, maybe a little sarcasm.)
Out of all the plans out there, this comes closest to a compromise among both Republicans and Democrats. Simply put, this bill would require substantial cuts in spending, an enforceable spending cap, and an amendment to the Constitution to include "a balanced budget component, a super-majority requirement to raise taxes, and a limit on spending as a percentage of GDP." The bill stipulates that if, and only if, the Balanced Budget Amendment is passed, a $2.4 trillion debt limit increase (which is what Obama has requested) can be considered in Congress. This bill also caters to Democrats by specifying that the cuts are only to be made to "non-veterans, non-Medicare, non-Social Security mandatory spending."
Harry Reid's plan also pulls from offers made by both Democrats and Republicans. All of the aspects of Reid's plan are not clear yet, but it does include $2.7 trillion in cuts that more than makes up for the $2.4 trillion debt increase. It includes a cut to healthcare somewhere around $335 billion, but it is speculated that those cuts will not affect Medicaid or Medicare. One interesting facet of the otherwise mysterious Reid plan is Reid's idea to auction off rights to the airwaves, providing another $15 billion in revenue. The FCC is thrilled about this idea, saying they've been pushing Congress to do this so that they could focus on meeting demands of new technology. One more step forward in government control invading the daily lives of Americans.
There is no doubt that the decision will come down to the very last minute. After all, this really isn't about the debt ceiling; it's about politics. The Democrats have their perspective, the Republicans have a different perspective, and this is the ultimate battle to see whose perspective is the right one. Or maybe our leaders should sign up for kindergarten in the fall to learn conflict resolution, how to share, and how to compromise.