08.01.2011 0

No deal better than a bad deal

Barack Obama and Harry Reid

Harry Reid and Barack Obama

By Rick Manning – When it takes about five minutes for President Obama and Senate Majority Leader Harry Reid (D-Nev.) to sign on to a new debt deal, perhaps Republicans should look for the trapdoors.

Based upon press reports, here are just four.

Contrary to what the deal states, it actually guarantees a tax increase. The “deal” sets the CBO economic assumptions up as the inviolable guideline that Congress must follow. The CBO has the expiration of the 2003 tax cuts cooked into the books effective 2013. So Congress will now be forced to allow taxes to rise, a guaranteed tax increase.

To make matters worse, the triggered cuts in defense spending unless there is an alternate agreement passed give 40 Democrats in the Senate absolute power over the rest of Congress. In order to prevent the level of defense cuts proscribed in the deal, Republicans will end up having to agree to additional tax increases. It is also highly likely that Medicare cuts will never occur, being replaced by additional taxes.

The deal doesn’t allow Medicaid to be cut — the same Medicaid that is now extended to couples who make $64,000 a year. Effectively, the “deal” would institutionalize the massive expansion of middle-class welfare under the Pelosi-Reid four-year reign of fiscal terror.

Finally, the deal doesn’t solve the problem because a credit downgrade becomes a certainty under it. If the rosy GDP growth assumptions of the CBO are realized (hint: They didn’t forecast a .4 percent growth rate in the first quarter of 2011), then our nation will only have a $21 trillion national debt in 2021, not counting the $4.5 trillion owed to the Social Security and Medicare trust funds. That is the best-case scenario under this debt “deal.”

Ironically, the Democrats won’t pay a political price for a bad deal, because their constituencies are protected for the time being.

However, the Republican Party will go the way of its predecessor, the Whigs, if they allow our nation’s fiscal solvency to be destroyed all in the name of getting a deal.

Hopefully, House Republicans will listen to Nancy Reagan on this one and just say no, because a little short-term pain is worthwhile if it stops the long-term pain that this “deal” is guaranteed to create.

Rick Manning is the Communications Director of Americans for Limited Government, you can follow him on twitter @rmanning957. This post was originally featured at The Hill’s Pundits Blog.

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