July 25, 2011
Easy way or hard way?
There is a simple way to look at the debt ceiling negotiations: we can do this the easy way, or we can do this the hard way. First, the Congressional Budget Office projects federal spending to be about $46 trillion over the next decade. What the House Republicans asked for is spending cuts to be the same as the increase in the debt ceiling, or about $2.4 T. That is, all the Republicans want is a 5.2% reduction in projected spending. Even that is not a true cut, but merely a mildly slower rate of increase. Without the Republican proposed "cut," federal spending would go up about 4.6% per year. With the "cut," spending would go up about 4.0% per year. That is the hell that would be life under Republican budgets: annual increases of only 4.0% instead of 4.6%. But if the debt ceiling is not raised, federal spending could only be as much as federal revenues. For the next couple of months that would mean cuts of about 44% in planned spending. For 2012, it would mean cuts of about 30%...(Read Full Post)