The Shutdown in New Jersey

The following is from Congressman Rush Holt's newsletter:

About 31,000 New Jerseyans work for the federal government. Many of these public servants have been furloughed; the remainder are continuing to perform their duties but will not be paid until Congress funds the government. As a result, Moody’s Analytics estimates that a three-to-four week shutdown would cut economic growth nationwide by more than half in the fourth quarter.

Due to the shutdown, the Children’s Home Society – which administers the Women, Infants, and Children (WIC) program in Mercer County – could not write any food or milk vouchers last week, impacting several thousand women and their families. The state of New Jersey has since stepped forward to support WIC temporarily, but if the shutdown continues, more children could lose access to basic nutrition.


At Rutgers Cooperative Extension, 60 staff members are about to be laid off due to funding shortfalls related to the shutdown. New small business loans, including those for New Jersey’s nearly 200,000 small businesses, are being halted. New student loans for New Jersey’s 440,000 college students are not being disbursed. New applications for Social Security, veterans’ benefits, visas, and passports are not being processed.

These problems will only grow worse if this shutdown is allowed to continue. And if the debt ceiling crisis is not resolved, the increased cost to the government could easily be in the tens of billions of dollars each year.

For Generations

Today Republicans in the House are stalling and filling time while they find the courage to admit they have made a big mistake, substantively and politically, in shutting the federal government and to bring to the floor a resolution to resume funding. So, they are using time to bring up a version of the farm bill that would leave more Americans hungry by reducing SNAP benefits (previously known as food stamps).

According to the Lancet Medical Journal published this past week, “SNAP is in jeopardy, which means American children’s health is in jeopardy.” More than 70 percent of SNAP benefits go to households with children. The program, dating from the 1960s, has been shown to have less waste, fraud, and erroneous awards than other government programs.

The Lancet article continues, “Many studies have shown positive associations between receipt of SNAP and... a lower risk of anemia, obesity, poor health, hospital admission for failure to thrive, and reports of child abuse and neglect. Children aged 5 - 9 years of SNAP-participating families had better academic outcomes and less obesity than had children of non-participating families... Between 1961 and 1975, the programme was implemented county by county, thus, allowing for comparison across counties that differed only by SNAP availability. In SNAP-available counties there was… a significant increase... in mean birthweight [an important measure associated with infant health] for both black and white Americans compared with those counties where SNAP was not available. Children of low-income women in SNAP-available counties were less likely to have metabolic syndrome [ill health such as diabetes] in adulthood, and women who had received food stamps during early childhood were more likely to be economically self-sufficient.”

This seems to me to be a very important point: the societal benefits of food stamps extend far beyond the temporary reduction of hunger pangs, and the benefits last for years, even into the next generation.

Sincerely,

Rush Holt

President Obama's Weekly Address 10/12/13: Let’s Get Back to the Work of the American People

WASHINGTON, DC— In this week’s address, President Obama discussed his meetings with members of Congress of both parties and the ongoing effort to reopen the government and remove the danger of default from our economy. The President urged Congress to pass a budget, put people back to work, and end this shutdown. In his message, the President also called for paying our bills, and preventing an economic shutdown.

President Obama's Weekly Address 10/5/13: End the Government Shutdown

WASHINGTON, DC— In this week’s address, President Obama said that Republicans in the House of Representatives chose to shut down the government over a health care law they don’t like. He urged the Congress to pass a budget that funds our government, with no partisan strings attached. The President made clear he will work with anyone of either party on ways to grow this economy, create new jobs, and get our fiscal house in order for the long haul – but not under the shadow of these threats to our economy.

President Obama's Weekly Address 9/21/12: Congress Must Act Now to Pass a Budget and Raise the Debt Ceiling

WASHINGTON, DC— In his weekly address, President Obama said that the economy is making progress five years after the worst recession since the Great Depression, but to avoid another crisis, Congress must meet two deadlines in the coming weeks: pass a budget by the end of the month to keep the government open, and raise the debt ceiling so America can pay its bills. Congress should vote to do these now, so that we can keep creating new jobs and expanding opportunity for the middle class.

The Fiscal Cliff: Good Deal or Bad?

As they say, "you know you have a good deal when nobody is happy with it", and that is exactly what we have this morning with the passing of the fiscal cliff deal's winners and losers.

I'm glad that this nonsense with the fiscal cliff is over (for now) but am disappointed that more wasn't done to address revenues and spending cuts, which have been kicked down the road until the end of February as a result.

By backing off his campaign pledge to extend the Bush Tax cuts for only those making less than $250K a year and raising the limit to $400K for individuals ($450K for joint filers), President Obama made a huge concession that nearly cut in half the projected revenue that he campaigned on and the american people overwhelmingly supported. As for entitlement programs such as Medicare, Medicaid and Social Security, I don't believe that they are adding to or  driving the deficit, per say, as much as conservatives say they are.  As in the past, these programs can be tweaked without much pain to ensure that they are solvent and are around for a very long time.

It is the recession that was brought on by unsustainable defense spending, driven by a military industrial complex and the chicken hawk members of congress, who wasted hundreds of billions of dollars fighting two, largely unpaid for wars in Iraq and Afghanistan for the past 10 years, that are the real culprit that has lead us to the (perceived) debt crisis of the past few years. Can you imagine where we would be at today if the war in Iraq never happened?

Now everyone will be looking towards March 1st and the big showdown that the President and Congress will have over spending and entitlement cuts and the raising of the debt ceiling.





 

America Thanks The Tea Party? [video]

Actor, voice over artist and Tea Party gadfly, D.C. Douglas, released another video on Friday nght thanking the Tea Party for its contributions to the debt ceiling debate. Immediately upon it's release, his video took on even greater meaning.

Though this video's release occured at roughly the same time that Standard & Poor's credit downgrade for the US became official - it was mere coincidence. Twitterverse, however, picked up on the video's sentiment and began forwarding it to friends as way of expressing their less-than-warm-n-fuzzy feelings reagrding the Tea Party's hand in the credit downgrade.

Apparently this was not without some merit. In S & P's statement, they write "[T]he downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned..."

In essence, Congressman John Boehner chose to move into the far right Tea Party's territory rather than into the Republican mainstream. So, in effect, it seems even more fitting that America should Thank the Tea Party!

Rush Holt; The Debt Ceiling Downer

For the moment we have put the debt crisis behind us. That is small comfort as the economy at large, the job situation, the housing market, and the financial markets continue to suffer. The Tea Party in Congress and its enablers should never have been allowed to threaten America’s good name in order to advance their view of a diminished government and trickle-down economics. They should never have been allowed to force a closed-door, hurried revision of our entire economy. And they certainly should never have been able to get away with a deal that increases inequities in our society and our economy. You, like most Americans, may have watched in dismay—or even in disgust—as Washington fumbled the self-imposed crisis.

Putting aside the distasteful process and the worrisome prospect that government by hostage-taking will continue, this week I had to face the immediate questions: Was the resulting deal going to help the economy? Would it create jobs? Would it reduce the crippling inequities in our economy and society? Would it bring down the deficit, as was the ostensible goal? On all counts my answer was “No,” and I voted against the resolution on the House floor.

I am pleased that we as a country are paying our debts, but I lament the damage done to the institutions of government and the good name of the United States as the most reliable, most creditworthy entity in the entire financial world. I lament especially the damage done to our view of ourselves. The negotiations were based on Tea Party premises: that our deficit is the principal concern facing us, that America is a pitiful debtor nation, that we must lower our sights, that we must end the quest to free our people from want and inequalities, that we cannot afford any longer to be the nation conceived in liberty and dedicated to the proposition that all are created equal. Are we no longer the America of the 1940’s that paid for millions of GI’s to go to college and buy homes, while rebuilding ourselves and Europe, when we were faced with a national debt much greater than today?

The deal this week may have the beneficial effect of showing that in the long run the United States intends to bring expenditures more in line with revenues. In the short term, though, the deal is a downer. It not only avoids dealing with today’s principal needs—job creation and economic growth—it actually will cost jobs and preclude any economic stimulation. At a time when clearly the economy is shaky, it is a mistake to declare, as the deal effectively does, that the federal government will have no direct hand in getting the economy moving. To meet next year’s target of spending reductions will require cuts equivalent to the budgets of all the following government operations combined: the EPA, the National Park Service, the Small Business Administration, FEMA emergency and firefighter grants, and the Women-Infants-and-Children food grants. In subsequent years, the cuts would be even ten times larger. Why should we rally to the cry, “No, We Can’t?” Have we forgotten that barely a decade ago we paid down the deficit with strong economic growth, job creation, and budgetary discipline without resorting to gimmicks, triggers, or Balanced Budget Amendments?

I would have liked to vote on a plan that protected the major functions granted to Congress under the Constitution rather than turning them over to an undemocratic, isolated committee of twelve. I would have liked to vote on a plan that would have accelerated withdrawal from Iraq and Afghanistan, saving lives and dollars, and that would have produced savings in our healthcare costs and dealt with the looming loss of 30 percent of doctors’ reimbursement under Medicare. Instead, the plan that was presented was negotiated on the turf of the Tea Party, which seems to think that it is anti-capitalist to ask those individuals and companies doing well in this economy to bear some of the load, even though the one or two percent of people with the highest income have seen their income grow by about 25 percent while everyone else has seen an effective decline and America’s largest corporations have reaped immense profits by using loopholes and offshore tax havens to avoid paying taxes.

Nevertheless, I am making it my job to beat back the pessimistic view in Washington that gave rise to this deal. We must not let this deal be the chart of our country’s future course. It is based on false premises that fail to recognize the inherent fairness that is characteristic of our people, the ingenuity and entrepreneurial energy that have sparked our economy for generations, and the unshakable American meliorism that says we can and must make life better for each succeeding generation. I think that now, more than ever, we must have a realistic view of our situation so that we can strongly defend equality and build a community that reinforces the opportunities for each individual.


Sincerely,

RUSH HOLT
Member of Congress

Senator Menendez Votes Against Debt Deal

August 2, 2011

WASHINGTON – US Senator Robert Menendez (D-NJ) today voted against the debt deal because it lowers the deficit on the backs of working class Americans, demands no sacrifices from those who can best afford it, and could jeopardize our economy’s fragile recovery.


“I cannot in good conscience support a plan where soldiers, seniors, students, and working families must endure trillions in cuts, but oil companies, billionaires, and corporate jet owners are not asked to pay their fair share” said Senator Menendez. “I supported the Reid plan and previous efforts to reduce the deficit because I believe it’s important to stem our nation’s rising debt, but I believe that we must do so in a balanced way that calls for shared sacrifice, just as the American people have demanded. Such an unbalanced approach is not only unfair, but it could also jeopardize our already fragile economy.”


Senator Menendez took to the Senate floor yesterday to explain his opposition to the plan.

Lautenberg Stands Up for Everyday Families, Opposes Unfair Budget Deal

Tuesday, August 02, 2011

WASHINGTON, D.C. – U.S. Sen. Frank R. Lautenberg (D-NJ) issued the following statement after voting against a deficit reduction deal that will cut trillions in funding for critical domestic programs:

“This legislation was a shakedown, not a compromise. Tea Party Republicans held our country hostage until their ideological demands were met, with little regard for what it will mean for the average American family. Our debt ceiling had to be raised – as was done 18 times under President Reagan and seven times under President George W. Bush – but it shouldn’t be done in a way that diminishes access to education and health care, a cleaner environment, or homeland security. Our country’s financial future must include a balanced approach of shared sacrifice; taking trillions from programs that help our children, seniors, and middle class, while asking for nothing more from the wealthy or corporations raking in record profits, is not the picture of a fair and democratic society. We must continue to work to reduce our deficits, but countries, like buildings, cannot be built from the top down without injuring the hope and morale of their people and destabilizing the strength of their foundations.”

Holt Statement Opposing Budget Control Act

Monday, 01 August 2011

(Washington, D.C.) – U.S. Rep. Rush Holt (NJ-12) today voted against S. 365, the Budget Control Act of 2011. He released the following statement after his vote:

“The default debate is, at its heart, a debate between two visions for America. One side envisions rebuilding our country, investing in jobs and education and infrastructure, and rising from the Great Recession as a stronger and more resilient nation. The other side accepts a pessimistic vision of a weakened America with a shrunken government – a nation hampered by deep cuts to the safety net and hobbled by a refusal to invest in our future.

“I have no doubt that, in a fair debate, a hopeful vision for America would win out. But the default debate has not been held on fair terms. The Tea Party and their enablers have held America hostage. They have insisted that, unless Congress enacted their radical, ideological agenda, they would force an unprecedented default on America’s obligations and thus trigger an economic collapse.

“From the beginning of this debate, I rejected the notion that America’s creditworthiness should be used as a bargaining chip. Yet I was willing to support a balanced, fair deal if that was what was required to prevent a default. Unfortunately, today’s deal is not balanced. It is not fair. Most of all, it is not right.

“The House has voted for vast cuts in government services that ordinary Americans depend on: student loans, unemployment insurance, food safety inspections, highway safety programs, and more. These cuts will force layoffs among teachers, public safety officers, construction workers, and more. These laid-off workers will, in turn, be forced to pare back their spending at their local grocery stores, drug stores, and small businesses, forcing still more layoffs – a vicious circle that threatens to destabilize our fragile economy. We saw in last week’s economic reports that job growth has been choked back by cuts in state and local governments. This deal does not help the situation. It hurts the economy.

“The deal lays the groundwork for another $1.5 trillion in cuts to come, to be negotiated behind closed doors by an unelected super-committee. Given that the first round of cuts will have decimated discretionary programs, these later cuts will very likely focus on Social Security and Medicare. The citizens who will be hurt most are those who have the least voice in our democracy. After all, when a handful of politicians gather in the proverbial smoke-filled room, the interests of ordinary Americans are nearly always left out.

“Yet although most Americans will sacrifice greatly, the most privileged among us will be immune. Favored corporate interests, millionaires, and billionaires will continue to receive special tax breaks as far as the eye can see. That is not the sort of fair, balanced deal that Americans asked for and expected.

“As poor as this deal is on its merits, I am even more troubled by the precedent it sets. The Tea Party and their enablers have, by taking the American economy hostage, transformed a routine budgetary authorization into the most dramatic reshaping of government in decades. Today’s deal establishes that government-by-hostage-negotiation is a legitimate, effective way to achieve one’s political ends. I am frightened by what this means for the future of our democracy.”

APP Editorial: Obama's stature compromised

The editorial below is from today's Asbury Park Press, needless to say I am in full agreement!

President Barack Obama has revealed himself to be a man unwilling to fight for the principles in which he has said he believed.

The protracted debt ceiling/deficit reduction battle reveals, more starkly than ever, this president’s inability to stand firm. The United States may avoid a default, but the battle will end not with a bang, but with a whimper. Sadly, this is now the defining moment of Obama’s presidency.

How many times during the last six months has Obama capitulated to the 80 unreasoning Tea Party members of the House of Representatives and their right-wing echo chamber on talk radio and cable TV?

First, he allowed the debt ceiling talks to be linked to deficit reduction, then he abandoned even the idea of revenue increases. He gave away the store and alienated his base, and still the radical fringe frames the debate, now by demanding more cuts and an unnecessary constitutional amendment requiring a balanced budget, which would hamstring the government in the wake of major events. He could have stood up at any time, holding the 14th Amendment option in his pocket as a last resort. Now he just waits like the rest of us to see what happens next.

The president gave in and gave in, and he has lost whatever good will the great middle had for his attempt to be the rational one in the argument. Americans cannot respect a president who runs up the white flag of surrender.

And this obscene sausage-making is only the latest in a long line of appeasements: on health care, on Guantanamo Bay, on civilian trials for terror suspects.

We teach our children the fine art of compromise, but if you compromise away your values, you’ve lost something you cannot get back by barter.

We don’t want to elect some “philosopher-king” out of Plato. We want a leader with fire in his belly, who at least puts up an honest struggle based on core principles, who, in the words of Theodore Roosevelt, “spends himself in a worthy cause ... and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

So many thought that Barack Obama might be just that man. It looks as if we were wrong.

Jon Stewart: Dealageddon! - A Compromise Without Revenues

The debt ceiling debate ends in a budget deal that raises the debt limit and includes trillions in spending cuts but has no revenue increases.

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Dealageddon! - A Compromise Without Revenues
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Local Residents To Protest Outside Of Runyon's Office Tuesday; Debt Deal Fails To Protect Middle Class

Emergency Protest Tuesday, 12 noon at

600 Mule Rd #6,

Toms River, NJ 08757

Tuesday, August 2, 2011

- As Washington moves to pass a bill that will raise the nation's debt ceiling but fails to protect the middle class, local residents will gather Tuesday at12 noon at Representative Jon Runyon’s office to protest the Republican Party’s attempt to squeeze the majority of Americans—and the American Dream—to maintain billions in tax giveaways for millionaires, billionaires, and our nation’s most profitable corporations.

The debt deal, currently moving in Washington, will force deep cuts to important programs that protect the middle class, but asks nothing of big corporations and millionaires. And though it does not require cuts to Medicare, Social Security and Medicaid benefits, it opens the door for these down the road via an unaccountable congressional committee.

"What we have seen the last few days in Washington is exactly why people in our community, and all over the nation, are saying enough is enough," said Marilyn Michaels, a local MoveOn member. Representative Runyon and the other Republicans in Washington held our whole economy hostage simply to advance their ideological agenda. We are now stuck with a deal that protects millionaires and billionaires but fails to help everyday Americans like us. It is time for Congressman Runyon to stand up for the American Dream and protect the middle class."

The protest will take part on Tuesday at 12 noon at 600 Mule Rd #6, Toms River, NJ.

The rallies this week are being organized by the new American Dream Movement. Last Tuesday, 800 similar rallies were held across the country. The American Dream Movement is a growing movement inspired by protests in Wisconsin and fueled by the brutal right-wing attacks on the middle class and the poor. MoveOn.org, along with countless organizations, have joined the American Dream Movement to fight to ensure that Americans have the opportunity to find a decent job, afford to go to college, and secure a future for our children and our communities.

Get the Facts on the Debt Deal

I personally don't like this debt limit compromise and I commend both Middletown area Congressmen Rush Holt and Frank Pallone for having the conviction to vote against it. This deal will do little to restore fiscal sanity back in Washington while hurting many in the middle-class.

The principals of "shared sacrifice" do not exist in this deal and it will be the average joe that suffers in the coming months and years because of it.

The facts sheet below is posted over at Whitehouse.gov:

Bipartisan Debt Deal: A Win for the Economy and Budget Discipline

• Removes the cloud of uncertainty over our economy at this critical time, by ensuring that no one will be able to use the threat of the nation’s first default now, or in only a few months, for political gain;
• Locks in a down payment on significant deficit reduction, with savings from both domestic and Pentagon spending, and is designed to protect crucial investments like aid for college students;
• Establishes a bipartisan process to seek a balanced approach to larger deficit reduction through entitlement and tax reform;
• Deploys an enforcement mechanism that gives all sides an incentive to reach bipartisan compromise on historic deficit reduction, while protecting Social Security, Medicare beneficiaries and low-income programs;
• Stays true to the President’s commitment to shared sacrifice by preventing the middle class, seniors and those who are most vulnerable from shouldering the burden of deficit reduction. The President did not agree to any entitlement reforms outside of the context of a bipartisan committee process where tax reform will be on the table and the President will insist on shared sacrifice from the most well-off and those with the most indefensible tax breaks.

Mechanics of the Debt Deal

• Immediately enacted 10-year discretionary spending caps generating nearly $1 trillion in deficit reduction; balanced between defense and non-defense spending.
• President authorized to increase the debt limit by at least $2.1 trillion, eliminating the need for further increases until 2013.
• Bipartisan committee process tasked with identifying an additional $1.5 trillion in deficit reduction, including from entitlement and tax reform. Committee is required to report legislation by November 23, 2011, which receives fast-track protections. Congress is required to vote on Committee recommendations by December 23, 2011.
• Enforcement mechanism established to force all parties – Republican and Democrat – to agree to balanced deficit reduction. If Committee fails, enforcement mechanism will trigger spending reductions beginning in 2013 – split 50/50 between domestic and defense spending. Enforcement protects Social Security, Medicare beneficiaries, and low-income programs from any cuts.

1. REMOVING UNCERTAINTY TO SUPPORT THE AMERICAN ECONOMY

• Deal Removes Cloud of Uncertainty Until 2013, Eliminating Key Headwind on the Economy: Independent analysts, economists, and ratings agencies have all made clear that a short-term debt limit increase would create unacceptable economic uncertainty by risking default again within only a matter of months and as S&P stated, increase the chance of a downgrade. By ensuring a debt limit increase of at least $2.1 trillion, this deal removes the specter of default, providing important certainty to our economy at a fragile moment.
• Mechanism to Ensure Further Deficit Reduction is Designed to Phase-In Beginning in 2013 to Avoid Harming the Recovery: The deal includes a mechanism to ensure additional deficit reduction, consistent with the economic recovery. The enforcement mechanism would not be made effective until 2013, avoiding any immediate contraction that could harm the recovery. And savings from the down payment will be enacted over 10 years, consistent with supporting the economic recovery.

2. A DOWNPAYMENT ON DEFICIT REDUCTION BY LOCKING IN HISTORIC SPENDING DISCIPLINE – BALANCED BETWEEN DOMESTIC AND PENTAGON SPENDING

• More than $900 Billion in Savings over 10 Years By Capping Discretionary Spending: The deal includes caps on discretionary spending that will produce more than $900 billion in savings over the next 10 years compared to the CBO March baseline, even as it protects core investments from deep and economically damaging cuts.
• Includes Savings of $350 Billion from the Base Defense Budget – the First Defense Cut Since the 1990s: The deal puts us on track to cut $350 billion from the defense budget over 10 years. These reductions will be implemented based on the outcome of a review of our missions, roles, and capabilities that will reflect the President’s commitment to protecting our national security.
• Reduces Domestic Discretionary Spending to the Lowest Level Since Eisenhower: These discretionary caps will put us on track to reduce non-defense discretionary spending to its lowest level since Dwight Eisenhower was President.
• Includes Funding to Protect the President’s Historic Investment in Pell Grants: Since taking office, the President has increased the maximum Pell award by $819 to a maximum award $5,550, helping over 9 million students pay for college tuition bills. The deal provides specific protection in the discretionary budget to ensure that the there will be sufficient funding for the President’s historic investment in Pell Grants without undermining other critical investments.

3. ESTABLISHING A BIPARTISAN PROCESS TO ACHIEVE $1.5 TRILLION IN ADDITIONAL BALANCED DEFICIT REDUCTION BY THE END OF 2011

• The Deal Locks in a Process to Enact $1.5 Trillion in Additional Deficit Reduction Through a Bipartisan, Bicameral Congressional Committee: The deal creates a bipartisan, bicameral Congressional Committee that is charged with enacting $1.5 trillion in additional deficit reduction by the end of the year. This Committee will work without the looming specter of default, ensuring time to carefully consider essential reforms without the disruption and brinksmanship of the past few months.
• This Committee is Empowered Beyond Previous Bipartisan Attempts at Deficit Reduction: Any recommendation of the Committee would be given fast-track privilege in the House and Senate, assuring it of an up or down vote and preventing some from using procedural gimmicks to block action.
• To Meet This Target, the Committee Will Consider Responsible Entitlement and Tax Reform. This means putting all the priorities of both parties on the table – including both entitlement reform and revenue-raising tax reform.

4. A STRONG ENFORCEMENT MECHANISM TO MAKE ALL SIDES COME TOGETHER

• The Deal Includes An Automatic Sequester to Ensure That At Least $1.2 Trillion in Deficit Reduction Is Achieved By 2013 Beyond the Discretionary Caps: The deal includes an automatic sequester on certain spending programs to ensure that—between the Committee and the trigger—we at least put in place an additional $1.2 trillion in deficit reduction by 2013.
• Consistent With Past Practice, Sequester Would Be Divided Equally Between Defense and Non-Defense Programs and Exempt Social Security, Medicaid, and Low-Income Programs: Consistent with the bipartisan precedents established in the 1980s and 1990s, the sequester would be divided equally between defense and non-defense program, and it would exempt Social Security, Medicaid, unemployment insurance, programs for low-income families, and civilian and military retirement. Likewise, any cuts to Medicare would be capped and limited to the provider side.
• Sequester Would Provide a Strong Incentive for Both Sides to Come to the Table: If the fiscal committee took no action, the deal would automatically add nearly $500 billion in defense cuts on top of cuts already made, and, at the same time, it would cut critical programs like infrastructure or education. That outcome would be unacceptable to many Republicans and Democrats alike – creating pressure for a bipartisan agreement without requiring the threat of a default with unthinkable consequences for our economy.

5. A BALANCED DEAL CONSISTENT WITH THE PRESIDENT’S COMMITMENT TO SHARED SACRIFICE

• The Deal Sets the Stage for Balanced Deficit Reduction, Consistent with the President’s Values: The deal is designed to achieve balanced deficit reduction, consistent with the values the President articulated in his April Fiscal Framework. The discretionary savings are spread between both domestic and defense spending. And the President will demand that the Committee pursue a balanced deficit reduction package, where any entitlement reforms are coupled with revenue-raising tax reform that asks for the most fortunate Americans to sacrifice.
• The Enforcement Mechanism Complements the Forcing Event Already In Law – the Expiration of the Bush Tax Cuts – To Create Pressure for a Balanced Deal: The Bush tax cuts expire as of 1/1/2013, the same date that the spending sequester would go into effect. These two events together will force balanced deficit reduction. Absent a balanced deal, it would enable the President to use his veto pen to ensure nearly $1 trillion in additional deficit reduction by not extending the high-income tax cuts.
• In Securing this Bipartisan Deal, the President Rejected Proposals that Would Have Placed the Sole Burden of Deficit Reduction on Low-Income or Middle-Class Families: The President stood firmly against proposals that would have placed the sole burden of deficit reduction on lower-income and middle-class families. This includes not only proposals in the House Republican Budget that would have undermined the core commitments of Medicare to our seniors and forced tens of millions of low-income Americans to go without health insurance, but also enforcement mechanisms that would have forced automatic cuts to low-income programs. The enforcement mechanism in the deal exempts Social Security, Medicaid, Medicare benefits, unemployment insurance, programs for low-income families, and civilian and military retirement.

President Obama's Weekly Address 7/30/11: Acting Responsibly on Behalf of the American People

WASHINGTON—In this week’s address, President Obama urged both Republicans and Democrats to take action to avoid defaulting for the first time in our nation’s history. While the two parties are not far apart in their goals, they must resolve their differences quickly so that the United States can continue paying its Social Security checks, veterans’ benefits, and contracts with thousands of American businesses. The time has come to stop endangering the Triple A bond rating of the United States, put aside partisan politics, and behave responsibly to ensure a balanced approach to reducing our nation’s deficit.

Cut, Cap and Balance: The Wrong Approach to Deficit Reduction

The following was posted this morning at the White House blog by Jason Furman, Principal Deputy Director of the National Economic Council.

The blog post in response to all the rhetoric being thrown around by the ultra conservative right-wingers and TEA praters, who have taken control of the Republican Party and are risking our country's economic future and well being over the debate about raising the national debt limit.

These people are pushing for a proposal called "Cut, Cap and Balance" which is legislation that would cut $111 billion out of the budget immediately, cap spending to a percent of the Gross Domestic Product, and send a Balanced Budget Amendment to the states in return for increasing the $14.294 trillion debt ceiling.

On so many levels this proposal is wrong and could lead to a worsening of the economy and handicap future Congresses and Presidents ability to deal with a fiscal and economic crisis.

"Cut, Cap and Balance" is not the answer to our current troubles in this country, fixing the economy and putting people back to work is with sound fiscal policy that has proven in the past to work.

Democrats and Republicans agree that getting our fiscal house in order is one of the critical challenges facing America. To address it we are going to have to make tough choices, bringing to the table a commitment to examine every area of the budget and every loophole in the tax code without presumptively taking any of the options off the table. But it is critical that we not bring down our deficits and debt at the expense of economic growth, innovation and job creation, or place the greatest burden on older Americans and the most vulnerable. That is precisely what the House’s Cut, Cap and Balance plan would do – a proposal that White House Press Secretary Jay Carney described as “duck, dodge and dismantle.”

The House plan fails to achieve a balanced plan to reduce the deficit, which is precisely the approach that has worked successfully in America in the past and has recently been recommended by a number of different fiscal commissions.

Let’s start with the “cut” and “cap” portions of the bill. These sections require spending cuts in 2012 and caps over the next decade identical to those in the House Budget Committee Chairman Paul Ryan’s plan., By House Republicans’ own design, achieving those spending levels would require cuts that would be harmful to the economic recovery in the short-term while also damaging our long-term competitiveness and placing a higher burden on seniors and the most vulnerable. To give a few examples:

• The bill would abruptly cut more than $100 billion in spending in the first year alone, a step that Congressional Budget Office Director Doug Elmendorf stated would “affect our projections for GDP growth over the next two years.”
• The House Budget Resolution plan would cut clean energy investments by 70 percent, infrastructure investments by a third, and education and training by 25 percent – cutting 320,000 children from Head Start and reducing aid for families trying to put their kids through college by hundreds, or even thousands of dollars.
• It would cut Medicaid by one-third over the decade, and by nearly 50% by 2030. This could, according to the Kaiser Family Foundation, result in 36 million people losing Medicaid coverage, including people with disabilities and seniors in nursing homes. And that comes on top of the 17 million who would lose coverage due to repealing subsidies in the Affordable Care Act.
• And it would cut programs for the most vulnerable – for example, by food stamp benefits for a family of four by $1,760 per year or cut 8 million households from the program.
• Finally, the House Budget Resolution proposed to convert Medicare to a voucher program, increasing costs for Medicare beneficiaries by $6,400 a year beginning in 2021 – with those higher costs increasing over time.

But “Cut, Cap and Balance” doesn’t stop there. It also includes a requirement that to secure an increase in the debt limit necessary to avoid default – and a devastating impact on families and businesses – Congress must pass a constitutional amendment requiring a balanced budget. Moreover, it is an extreme version of a constitutional amendment that would cap government spending and require a two-thirds supermajority to cut tax loopholes or take other steps on revenue. The President has frequently made clear why he thinks a Balanced Budget Amendment is a misguided effort to absolve leaders in Washington of their responsibility for making tough choices. But it is important to understand what this requirement means when added on top of the cuts in the House Budget Resolution.

To start with, consider that at the end of the next decade, the House plan would still be $400 billion a year short of achieving a balanced budget. Unless Republicans are willing to entertain $3 to $4 trillion in additional revenues over the next decade, that means $400 billion a year would need to be cut beyond the House Budget Resolution.

And when you’ve already made such deep cuts to discretionary spending, Medicaid and other programs, it becomes difficult to imagine any credible ways to achieve those spending levels without including Social Security in the reductions and making substantially deeper reductions in Medicare.

So if the required spending cut were across the board, it would mean all programs, including Social Security and Medicare, would be cut by 10 percent by the end of the decade on top of the House Budget Resolution.If defense spending alone were exempted, it would mean that all other programs (again including Social Security and Medicare) would be cut by about 12 percent by the end of the decade on top of the House Budget Resolution. It would be possible to avoid cuts of this magnitude, but that would require dramatically deeper reductions than the one-third cut in Medicaid and infrastructure currently proposed in the House Budget Resolution.

We obviously don’t agree with this approach. The President has proposed a comprehensive approach that ensures we live within our means and reduces the deficit by $4 trillion, while supporting economic growth and long-term job creation, protecting critical investments, and meeting the commitments made to provide economic security to Americans no matter their circumstances. We want to make significant cuts to government spending, including additional savings that come from further strengthening critical programs like Medicare, while protecting the recovery, strengthening the middle class and making the investments that will promote economic growth so folks feel confident in their futures and their children’s futures.

Representatives from both parties will continue to talk about reaching the largest deal possible. The President is pushing everyone to come to the table, put politics aside, work through our differences and prove to the American people that we can still do big and difficult, but necessary things.