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Boehner Releases Revised Plan: To Cut $91.7 Billion Each Year For A Decade, Buys 4 Months Before Next Debt Ceiling Hike
The epic revision in the just revised Boehner plan is to cut a grand total of ... $91.7 billion per year for 10 years (back-end loaded of course: 2012 will see just $22 billion in cuts - can't have any real cuts too early or else). The spin is that this is sufficient because the $917 billion in cuts is more than the proposed $900 billion debt ceiling hike, so all shall be well. Of course that is only part one of the two-part debt ceiling hike process. The next step is a $1.8 trillion cut to "protect programs like Medicare and Social Security from bankruptcy." The problem is that Boehner continues along the path of a two-step debt hike, a formulation that Obama will never agree to, since it effectively guarantees him no-reelection chance, as the last thing the people will want is the same bickering as we are experiencing every day again some time in 2012, when the current $900 billion in incremental debt capacity runs out. And actually, with the US debt already $300 billion below trendline and with the government's two pension funds already plundered by a like amount (which means they have a net IOU position), it means that the Boehner plan really buys only $600 billion of dry powder. At a burn rate of $150 billion a month, this means the first step of the Boehner plan buys precisely 4 months before the debt ceiling has to be raised again! Oh yes, this plan also guarantees at least a one notch downgrade to the US debt, with more notches coming up before the end of the year when this whole farce is repeated.
BREAKING: Independent CBO Confirms Spending Cuts Exceed Debt Limit Hike in Revised GOP Plan; Bill Now Includes $22 Billion in Deficit Reduction in First Year
Posted by Speaker Boehner's Press Office on July 27, 2011
The Congressional Budget Office (CBO) has released its analysis of the revised Budget Control Act of 2011 today, and CBO’s analysis confirms that the spending cuts are greater than the debt hike – affirming that the House GOP bill meets the critical test House Republicans have said they will insist upon for any bill to raise the nation’s debt ceiling. Specifically, the CBO analysis confirms the Republican plan will:
- Cut and cap spending by $917 billion over 10 years – that’s more than the $900 billion debt hike;
- Cut $22 billion in spending for FY2012 and hold spending below FY2010 levels until FY2016;
- Continue reducing discretionary spending each year compared to President Obama’s budget (by $96 billion in 2012, $118 billion in 2013, $115 billion in 2014, $117 billion in 2015, and so on); and
- Require Congress to draft proposals that produce reductions of at least $1.8 trillion that help protect programs like Medicare and Social Security from bankruptcy.
Republicans adjusted their spending cut bill after a lower-than-expected score from CBO. This updated analysis confirms what others are saying: the Republican plan “changes the trajectory of spending” and “would keep the debt cutting process going.” Unlike Senator Reid’s gimmick-filled plan, the Republican proposal includes real spending cuts and reforms that will restrain future spending – and the spending cuts are larger than the debt limit increase.
This bill is far from perfect, but it’s a positive step forward that denies President the $2.4 trillion blank check that lets him continue his spending binge through the next election. Learn more about it here.
And here Paul Ryan explains how this grand plan will cut a whopping $22 billion in all of 2012.
The Budget Control Act has been updated to make certain that House Republicans fulfill their pledge to cut spending more than we increase the debt limit. Congressional Budget Office numbers confirm that the updated legislation adheres to this pledge: no new taxes; no blank check for the President; spending cuts greater than the size of the debt limit increase.
The bill has been revised to increase outlay savings, according to the Congressional Budget Office. The Budget Control Act caps budget authority each of the fiscal years from 2012 to 2021. Budget authority – the authority Congress provides to agencies to spend each year – is set at a fixed level for the next decade under the Budget Control Act. Budget authority eventually results in the actual spending of money, which are recorded as outlays. Outlays are recorded when agencies spend out the money they’ve been provided through budget authority.
The updated legislation makes no changes to the annual budget authority caps, but removes a limitation on outlay calculations that was included in the first version of the bill. This adjustment allows the Congressional Budget Office to provide a more accurate measure of the likely rate of spending. In their new analysis of the Budget Control Act, the CBO estimates that the bill will reduce the deficit by $22 billion in FY 2012, and by $917 billion between 2012 and 2021. Under the bill, the President is given authority to increase the debt, under certain conditions, by up to $900 billion. Based on CBO estimates, the spending savings exceed the amount of this debt increase.
The revised bill will also include a point of order against consideration of a measure that would violate the discretionary spending caps put in place by the bill, which in the Senate would require a three-fifths vote in the Senate to waive. In addition, three provisions from the original bill are modified to address technical timing issues with respect to resolutions of disapproval.
For a review of discretionary spending next year under the Budget Control Act, showing real cuts relative to FY2011, and spending cuts far closer to the House-passed budget as opposed to the President’s request to increase government spending:
And from the revised CBO score (link here), here is the only table that matters:
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This whole debate may seem like so much huff, puff and circumstance as both parties posture. I think there is a much deeper danger and I truly believe Mr. Obama wants a 'default' on August 2, and will do everything in his power to allow this to come to pass. Why? ... simply because who is responsible for making the ‘tough’ decisions when the government is taking in less than it is spending and what gets paid ... that's right ... Mr Obama. I believe that he wants to be able to create a sting of calamities for every constituency that is currently not in his camp and then blame it on the obstructionary GOP'ers. “I’m sorry but we just can’t print SS checks” … “I’m sorry but Medicare payments are not going out” … “I’m sorry but we have to shut down border operations” … yes folks, he gets to choose not the Congress. I feel that his choices will not be in the best interest of the United States of America.
If this president wants a default, you can bet your Woods Shitting Ass he is not the only one. Even if calamity is part of the plan.
I HOPE (hahahahaahhahhhahhaaa ha, eh hem.) you are not right though.
Wait….if deficit is running +$1Tril a year…how exactly is $91 Bil a year going to reduce the debt or noticeably impact the deficit? I'm missing some pixie dust application somewhere….
Both the Dems and republicans are big government statists. There is little difference between the two. The debt ceiling will be raised because that is all they know how to do....grow government and spend money. The real battle is between the big government status quo and the small government liberty guys like Ron Paul. http://www.freemarketfan.com/2011/07/debt-ceiling-dog-and-pony-show.html
NO MORE FUCKING PROMISES !!!
CUT THE FUCKING SPENDING N-O-W DAMNIT, T-H-I-S FISCAL YEAR!
50% ACROSS THE BOARD CUTS IN E-V-E-R-Y-T-H-I-N-G.
Is it just me or do US Politicians act/look like monkey's fucking a football????
These aren't actual spending cuts, they're just reductions in the rate of increase. So all the blustering and screaming about killing babies and old people is nothing but hyperbole.
Show me some cuts to ending budget levels (last time we had a budget) and I'll buy it as actual spending reductions, but until then the population is getting a load of BS.
Just say no to any increase in the debt ceiling.
Show me cuts to Wall Street. We'll be bailing them all out again shortly (BAC needs $50Bill) on top of the several billion daily flipped to PDs through QE lite. If we have QE3 we'll be flippin them $7-8 billion daily, maybe more this time. We'll be recapitalizing the IMF soon. TARP and others still not fully repaid. Net net, you lose, they win
Fantasy land bullshit from a bunch of thieves. Your party of pigshit is a fuckall joke on real people trying to live real lives. Rot in hell.
whats new, i think ross perot predicted all this 20 some years ago
We're a few days away from a 50% cut in government spending - and I have yet to hear anything, official or speculative, on what they'll actually fund and what they won't. I assume they'll have to cover interest. Will they stiff seniors or not? Food stamps? Medicare? Shut down all the departments?
Yeah, I'm watching Wall Street right now for the first time in ten years. In the opening scene--year 1985--the "boss" is talking about how the whole world is going to hell and blames it all on Nixon killing the gold standard. Here we are, only 26 years later having the exact same conversation. Progress?
Greed was good.....while it lasted
Beyond the "greed is good" speech, most of that movie--the financial Armageddon stuff--could just be transferred to the conversations we have on this site every day. It's amazing. Nothing has changed. No meltdown. No change in the talking points.
did tyler cover this?
http://thewarningsigns.blogspot.com/2011/07/1-billion-armageddon-trade-placed.html#more
It's all drama and gainsmanship...it does not matter. The US won't default, they are only focused on how to position themselves for re-election...in both parties. 99% are doing nothing to solve the real problem. They are all crooks, and don't care about the country or the people...only their well paying positions.
Neville Boehner.
All these guys own stock, have paper investments (not considered conflict of interest). They're also getting paid by WS, hedgies (Boehner and his hedge fund friends like Paulson) and other big money.
So what do you think they'll do?
Media circus just to hide the bipartisan effort to ease unca sam into the world of defaulted nation (yet again - after Nixopn's 1973 closure of gold window). Yes, there was never any other way out except default, the Greeks have proven it and unca sam has gladly lernt the lesson.This charade allows unca sam to default without blue or red taking responsibility. And wait, the Fed is needed too, next month it will announce the new measures to cap short term yields at zero or close while unca sam defaults the bonds and notes. Money on Pimco, Jim Rogers, too bad for the asian and arab money who bought this funny debt, kiss your trillions before they go up in smoke.
one-month at-the-money EUR/JPY volatilities @ 12.20%/13.20% from 12.00%/13.00% New York. Benchmark one-month at-the-money USD/JPY volatilities are indicated @ 9.70%/10.40% late New York.
EUR is sell, Europe is looking second to the US as a FUBAR trade.
Eye Europe open, it tanks, EUR tanks, chaos reigns: gold goes bid again
Swisse has gone crazy bid again, dark clouds everywhere
A msg from a california Dem:
------------------------------------------
Last week, Ed asked me if I would support a deal that included cuts to these three critical services - Social Security, Medicare, and Medicaid/MediCal - and my response was clear, "No and hell no."
If the Republicans want to have a debate on eviscerating retirement security and basic health coverage for seniors, we can have that debate later. Indeed, this year, House Republicans have already voted three times to destroy Medicare and Medicaid. But it is profoundly reckless and dangerous for Congressional Republicans to take the full faith and credit of the United States hostage to demand major changes harming every American who hopes to retire with dignity.
If the United States defaults on its already promised obligations, we could plunge back down to a deep recession, hundreds of thousands of jobs could be lost, hyperinflation could hit our supermarkets, and the dollar's standing as the international reserve currency of choice would be put into jeopardy. This is dead serious stuff that should be far above petty politics.
We need a jobs plan. We need to Make It In America again. We need to begin responsibly paying down the deficit, and we can start that by bringing our troops home from Afghanistan. But the last thing America needs is for one faction in Washington to use a routine vote to artificially manufacture a Republican-orchestrated financial crisis. This is madness under the guise of legislation, and I will not stand for it.
Please, watch the video. You can be confident I will continue to fight against the false and morally bankrupt choice between letting the United States default on its obligations and protecting American seniors. A functional country always pays its debts.
Thank you for listening,
Rep. John Garamendi
(D) California
Budget cuts are just a distraction aimed at keeping up the appearence of 'respectability' while they shovel another trillion into bailing Wall Street (directly and also via players like the PIIGS which get money via IMF so they don't default and crash the mega banks)
God forbid we should ever be twenty years without such a rebellion. The people cannot be all, and always, well informed. The part which is wrong will be discontented, in proportion to the importance of the facts they misconceive. If they remain quiet under such misconceptions, it is lethargy, the forerunner of death to the public liberty.... And what country can preserve its liberties, if its rulers are not warned from time to time, that this people preserve the spirit of resistance? Let them take arms. The remedy is to set them right as to the facts, pardon and pacify them. What signify a few lives lost in a century or two? The tree of liberty must be refreshed from time to time, with the blood of patriots and tyrants. It is its natural manure.
-Thomas Jefferson
It looks like we are all going to hell.
Dracula 1931 " There are far worse things awaiting man... Than death"
Allegedly, your situation--for you--would be concurrently improved if I had two hundred dollars in my back pocket right now.
And let me tell you something. You're suspect. Yeah, you. I don't know what your reputation is in this town, but after the shit you tried to pull today, you can bet I'll be looking into you. Now the business we have heretofore you can speak with my aforementioned attorney. Good day gentlemen and until that day comes, keep your ear to the grindstone.
http://www.independentaustralia.net/2011/politics/how-george-w-bush-hacked-and-stole-the-2004-presidential-election/
If congress members know there is no agreement, can't they make a ton of fiat? And if they know there is an agreement, can't they make a ton of fiat too?
And then by extension, sovereign funds ...
Hey, the EU guys can do the same! This swinging the boat from side to side is a money maker!
Shake your money maker!
91.7B over 10 years? Backloaded? To subsequent congresses that have no obligation to any "deal" agreed to today.
Speaker Boehner. Maniacal political manuvering.
The only serious people in the room are the ones who will vote against raising the debt ceiling, vote cutting spending, and drawing up a balanced budget for next year.
I'm not big on the Balanced Budget ammendment. The Constitution authorizes Congress to borrow money on the credit of the United States (Art. I, Sect. 8). There will come emergencies that call for prudently drawing on the nation's credit. Rather, the fault for many of our problems lie in fiat currency, the Fed Reserve, and fractional reserve banking.
We don't need a new Constitutional ammendment every time we get in a pickle. Chances are, we're in a pickle because we've ignored the Constitution as it is already written.
Yes, we allowed paper currency unredeemable in gold or silver, which is not allowed by the Constitution.
But it's a moot point. The Constitution was abandoned in 1920 when the federal government bankrupted and was taken into receivership by the Fed.
We sure make a lotta noise for a bunch of insignificant insects that are just gonna get squashed by this stupid, bloated, drunken, reeling behemoth when it stumbles and falls on us.
The behemoth can't hear us. Isn't even listening.
Boner wants to take 10 years to save $900 billion so they can spend $900 billion in 3 - 4 months.
Pure fucking bullshit.
America is so fucked. We have pure criminals running things.
These people aren't stupid. They're thieves. Pirates. Predators.
Words fail me. I can't find the words to describe how screwed America is.
By the way, you can say goodbye to your 401ks and IRAs and pensions. They're his-to-ry.
You ignored the warnings. Now it's too late. You're fucked.
The suspense now more than anything is what's killing me. Please Timmy, let August 2nd be the final nail in the coffin.
We've tolerated enough bullshit from the government/financial complex. Bring on the default fireworks. Let's watch the world burn.
Anyone here buying gold in their IRA through APMEX or Goldline? As the above poster says, in graphic language, 401s and IRAs may be inflated away...rotting on the vine as the saver thinks he is doing a good job when actually he is suffering a slow death as the dollar is devalued.
No moron, they're being CONFISCATED.
And they'll LOVE all that gold you have in it. They can't wait to get their hands on it.
Hmmm…well then maybe we should load up our IRA’s with TZOO so when they come to confiscate it, they will be shocked and dismayed with what they find :-)
I'm trying to figure out (back of envelpe calculation) how much of a savings impact, in the Reid plan, would not launching a land invasion of mainland China have. Anyone who wants to help me out, I would be grateful ;)
Those numbers are deranging. We're going to need potentiation signals to properly express this ever cumulative national mess.
Like 140 x 10^13 dolars.
I wonder how much real money exists under circulation...
Just for the sake of reference:
Imagine every adult in the country handing over whatever physical money they possess in their pockets. Assuming by average, that this can be 500 dolars (and we know people don't own that amount by average. . . ) that is:
200 million adult americans x US$ 500 = 100 billion
When compared to real dollars circulating in the economy at any given time, those trillions are a blatant absurd.
For each REAL, deliverable, physical dollar, how many black-hole-dollars do we have?
-- please feed my axe
When compared to real dollars circulating in the economy at any given time, those trillions are a blatant absurd.
It's not about dollars, it's about WEALTH, ASSETS.
They've borrowed 14 trillion worth of WEALTH, ASSETS from the American people ...and China, Japan, etc.
Actually it's more like 40 trillion when you include all the Wall Street bailouts.
Adjusted for inflation it's more like 200 trillion.
If they hadn't borrowed all that wealth over 90 some odd years, Americans would all be millionaires, billionaires even.
Yes, over the last 90 years the federal government has borrowed most of the wealth of America and spent it.
There's no possible way that wealth can ever be paid back. So it's actually stolen. Over the past 90 years the federal government has stolen most of the wealth of America and spent it.
And we're coming up on the next huge theft. Everybody's 401k, IRA, pension fund, etc.
It's the last huge theft. After that there's not much left to steal.
The final mop-up will be print money like there's no tomorrow, giving it to the government and Wall Street, debasing the currency to worthlessness.
And there won't be any tomorrow. America has been bled dry and collapses to third-world status at that point.
We should wait for a break above trend line and retest before a confirmed buy? What about moving averages, and momentum indicators?
The lunacy of those elected to Congress just continues to boggle my brain. The situation is beyond surreal now.
Sometimes no comment is necessary.
Just click the appropriate arrows...
.
Baseline Spending and automatic spending increases the problem?
"...if we just freeze everything and spend no more this year than we spent last year, the Congressional Budget Office would score that as a $9.5 Trillion dollar cut. That's how out of whack the baseline is. A $9.5 trillion cut! That is the cumulative total of automatic baseline increases for the next ten years. But if there's a simple budget freeze -- and of course there's not going to be -- then we could "cut" $9.5 trillion." --- unidentified US Congressman
$9.5 Trillion by just freezing spending is a big number. Of course, we know that also includes SS COLAs, etc., but it also includes automatic budget increases and pay raises. The striking thing is that the budget increases seem to reflect politicians and government automatically correcting for inflation for themselves by law, but obfuscate and dismiss the notion of confiscation and theft from average Americans through inflation.
Factoid: The debt ceiling was $8.2 Trillion in 2006 when the donkey party took over congress, and we are now discussing doubling it to $16.7 Trillion just 5 years later.
Where's Hugh Hendry when you need him.
Tell it like it is Hugh, with all the adjectives and adverbs.
You had the baby boomers; soon to be replaced by 'baby boehners': kids working in sweat shops to fund the debt load, european banks and their asian paymasters.
It was a heck of a ride usa.
Hello? knock-knock. Knocking on all wooden skulls! There is no debt! It was created out of thin air!
Anyone home?
Hello?
Ah fuckit. Hopeless.
Here's some music:
http://www.youtube.com/watch?v=Gpc5_3B5xdk
Mooooooooooooooooooooooo
They will all cave bitchez
A default or downgrade isn't catastrophic. It won't hurt any regular humans (because we're prepared), unless they manage to kick the can and shove a brick up the taxpayer's mid body cavity.
Some zombies and livestock may feel a bit uncomfortable, but they can always slurp up the party line from the TV to feel better.
Most importantly this junkie has to stop.
The first step is to admit you're a debt junkie. Yeah, the dealers in this neighborhood are shit, but that won't save the junkie.
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