Freedom First Society

Issue:  S. 365 Budget Control Act of 2011.  Question: On the Motion  Concur in the House Amendment to S. 365 (3/5 required).

Result:  Motion agreed to 74 to 26. Became Public Law 112-25 (signed by the President 8-2-11).  Republicans scored.

Bill Summary:

  • Raises the national debt ceiling in steps by $2.1 trillion (or more depending on the work of the Joint Committee on Deficit Reduction — see next) with an initial $400 billion increase.   Subsequent steps are subject to congressional disapproval (both chambers must disapprove to block an increase, and the president can veto the disapproval).
  • Cuts spending by an equivalent amount over 1 decade, with $917 billion immediate. Sets up a 12-member House-Senate committee to come up the necessary additional cuts by November 23, 2011 (congressional approval required by December 23) under threat of a sequester producing $1.2 trillion in across-the-board cuts in discretionary spending.
  • Requires both chambers to vote on a balanced-budget amendment by year-end.
  • Makes changes to the Pell Grant and Student Loan program.

Analysis:  This measure was driven by federal deficit spending running up against the authorized debt ceiling. This last minute agreement to avoid default, worked out between congressional leaders and the White House, culminated weeks of political posturing. The Republican leadership demanded budget cuts to offset any increase in the debt ceiling.   Liberals argued for smaller cuts and tax increases on higher incomes.

This White House-endorsed “compromise” met with resistance from both sides of the aisle. Republicans supported it 174 to 66, whereas Democrats were split, 95 to 95.

The cuts were not nearly as dramatic as liberals suggested and nowhere near enough to contain the federal monster.   South Carolina Representative Mark Mulvaney, one of the Republicans who voted no, stated, “At the end of the day, Washington’s spending still has us sprinting toward a fiscal cliff. And this bill barely slows us down.”

Apparently, Standard and Poor agreed. Four days later, S&P lowered its long-term credit rating for U.S. debt from AAA to AA+.   An S&P press release accompanying its decision stated:

“The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.”

         The title of the measure, the offsetting budget cuts, and the liberal howls undoubtedly misled many Americans into thinking that this was a serious step toward balancing the federal budget.   However, the spending reduction was to be spread over a decade, whereas the debt ceiling increase was designed to satisfy the federal appetite past the next election.

Unfortunately, the arguments of the opposition still centered on the need to get government to live within its means, not to live within the Constitution.   The latter is the real road to prosperity and freedom.

While no one should look forward to the government defaulting on its obligations, the periodic votes on raising the debt ceiling remain one of the best ways for representatives and senators to say, “enough is enough.”

We will comment on the balanced-budget amendment part of this measure when we consider the votes on those proposals later in the year.

We have assigned (good vote) to the Nays and (bad vote) to the Yeas. (P = voted present; ? = not voting; blank = not listed on roll call.)

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