After Debt-Ceiling Deal, a Sense of Futility Grows in Congress

30 Oct 2015 | Author: | No comments yet »

After Debt-Ceiling Deal, a Sense of Futility Grows in Congress.

WASHINGTON—Congress ended an 11th-hour showdown when the Senate passed a bill Friday that raises the debt ceiling for the last time during Barack Obama’s presidency. President Barack Obama on Friday morning welcomed a two-year budget deal passed by the Senate in the pre-dawn hours in hopes of breaking a ‘cycle of shutdowns and manufactured crises that have hurt the U.S. economy. The brinkmanship has grown so routine that budget analysts and some lawmakers say it’s time to consider changes to the debt limit that do a better job of enforcing budget discipline without using the threat that the nation won’t pay its bills on time. At about 3 a.m, senators voted 64-35 for the measure that will spare the nation the specter of a catastrophic debt default and partial government shutdown. So far, that threat has provided poor leverage because many believe the consequences of missing payments could sharply raise borrowing costs, making the nation’s finances bleaker.

Democrats teamed with Republican defense hawks to overcome opposition from conservatives which included two GOP senators running for president — Rand Paul of Kentucky and Ted Cruz of Texas. While it’s true that the main drivers of federal spending–Social Security and Medicare–are entitlement programs whose costs rise automatically without annual Congressional approval, they are still programs that were approved by Congress.

Independent analysts said the Treasury could have run out of cash at some point the following week, a development that would have triggered havoc across financial markets and damaged the nation’s economic reputation globally. The deal increases government spending by $80 billion, split equally on domestic and defense programs and ends months of turmoil among GOP members of both chambers. It allows the federal debt limit to be extended until March 2017, after Obama leaves office, and for Republicans it removes a major distraction that could have impeded their re-election campaigns next fall.

He urged lawmakers to work on other needed spending measures in the future ‘without getting sidetracked by ideological provisions that have no place in America’s budget process.’ Paul, in fact, gave an hour-long speech that delayed the final vote to around 3 a.m., arguing that Congress is ‘bad with money.’ He also railed against increases in defense dollars supported by Republicans and domestic programs supported by Democrats. Cruz, for his part, said the Republican majorities in both the House and Senate had given Obama a ‘diamond-encrusted, glow-in-the-dark Amex card’ for government spending. Besides settling the federal budget for the 2016 and 2017 fiscal years, the agreement removes the threat of an unprecedented national default just days from now.

The deal would also avert a looming shortfall in the Social Security disability trust fund that threatened to slash benefits, and head off an unprecedented increase in Medicare premiums for outpatient care for about 15 million beneficiaries. That deal ended a debt-limit standoff at the last minute, but the damage included Standard & Poor’s downgrading the nation’s credit rating for the first time ever. Obama and Democratic allies like House Minority Leader Nancy Pelosi of California were big winners in the talks, but GOP leaders cleared away political land mines confronting the party on the eve of 2016 campaigns to win back the White House and maintain its grip on the Senate.

The cuts include curbs on Medicare payments for outpatient services provided by certain hospitals and an extension of a 2-percentage-point cut in Medicare payments to doctors through the end of a 10-year budget. There’s also a drawdown from the Strategic Petroleum Reserve, and savings reaped from a Justice Department fund for crime victims that involves assets seized from criminals.

Various proposals this year have outlined fixes to avoid paralyzing standoffs, including one published recently by the Government Accountability Office. By 1939, it had delegated nearly full authority to the Treasury to issue debt by setting an overall cap. “It was a convenience for Congress,” said Tony Fratto, a Treasury and White House official in George W.

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