Avoiding Depression Over The Debt Ceiling Deal

Yes, the news is pretty bad, but we all expected that once we started negotiating with terrorists the outcome would not be the greatest. I’m avoiding depression by remembering that things really could have turned out far worse. In other words, the Republicans could have won even more if they were  prepared to negotiate seriously before the last minute as opposed to having their own hostage situation with the Tea Party people.

There’s no point in writing about all the negatives. Many people have already done that. I figure it is worth linking to a couple of the stories which do find some positives in this. For example, Jay Newton-Small has five things for liberals to like:

The 2012 budget: At one point in the negotiations, the 2012 budget was to be slashed by $36 billion. The final number of cuts: just $7 billion. And just to ensure we don’t have another bruising government shutdown fight over cuts in September, the deal deems and passes the 2012 budget. Yes, that’s right, the old Gephardt Rule or Slaughter Solution, is back. What’s deem and pass? It’s a legislative trick that essentially means that Congress will consider the budget passed without ever actually having to vote on it.

The trigger: This is counterintuitive, but the trigger is actually pretty good for Democrats. For all that MoveOn thinks that it would force benefit cuts to Medicare, Medicaid and Social Security, it actually wouldn’t trigger benefit cuts to any entitlements. The only cuts it would force would be a 2% or more haircut for Medicare providers. And House Minority Leader Nancy Pelosi, along with most Democrats, has never opposed provider cuts. Not only that, most progressives actually want the Pentagon cuts. So if the committee deadlocks and the trigger is pulled, Democrats won’t be miserable.

The commission: Again, for all the liberal carping about a “Super Congress,” the commission of 12 members — three from each party in each chamber — set up to find the second phase of $1.5 trillion in cuts by Thanksgiving is actually rigged to force some revenue increases. Yes, the Bush tax cuts are off the table. But there are plenty of loopholes, subsidies and other corporate welfare programs that are on the table. And with such a strong trigger, it’s hard to imagine at least one Republican not voting to kill corporate jet subsidies over slashing $500 billion from the defense budget – even if the revenues aren’t offset. The question is: who are Republicans more afraid of, Grover Norquist or the joint chiefs? Democrats’ money is on the joint chiefs.

The immediate cuts: It may seem like a lot, but the $917 billion in the first phase of cuts were carefully negotiated by Vice President Joe Biden and his group. They include $350 billion in Pentagon cuts – a win for liberals. They don’t touch entitlement benefits, another win. And they set top line numbers for the next decade of budgets that aren’t draconian. It still cuts where liberals might prefer to spend, but most of the savings are backloaded to avoid extreme austerity in next few years of fragile economic recovery.  Just $7 billion would be cut in 2012, and only $3 billion in 2013. And of that combined $10 billion, half would come from the Pentagon. On top of that, the discretionary spending caps on budgets in future Congresses are subject to revision by those bodies.

The debt ceiling: Raising the debt ceiling through 2013 will not be contingent on the second round of cuts. There will merely be a vote of disapproval. This avoids another messy fight in January and another round of painful forced cuts.

Nate Silver has more on the good parts in the fine print of the deal.

I have my doubts as to whether the commission will accomplish anything worthwhile.  GOP leaders will choose members hey are sure will not go for any tax hikes and want to limit spending cuts to areas  where we would least want to see cuts. This means we will probably to to the trigger. Cutting defense spending wouldn’t be all bad. As a physician, I am not thrilled by the trigger of a 2% cut in Medicare, but I still need to check out the details. Worst case scenario is an across the board cut in the fee schedule for all Medicare services.  In the past, percentage increases or decreases in Medicare have been a total for the program, with some services changing by more or less than the overall percentage. As long as they have some leeway legally, I bet that they would prefer to cut more than 2 percent in some areas in order to avoid a cut in primary care services (sparing me from the cuts). I’m also not going to worry about a possible 2 percent cut when cuts of more than ten times this are scheduled under  the sustainable growth formula. If Congress can overrule the sustainable growth formula every year, they can also intervene to alter the effects of the triggers.