UPDATE: Senate Votes Down Reid Bill, Awaits Obama/McConnell Spending-Cut-Only Debt Limit Bill Sen. Mitch McConnell was on CNN's State of The Union this morning to proclaim that there's a deal which is roughly 3 trillion dollars in cuts on the
July 31, 2011

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UPDATE: Senate Votes Down Reid Bill, Awaits Obama/McConnell Spending-Cut-Only Debt Limit Bill

Sen. Mitch McConnell was on CNN's State of The Union this morning to proclaim that there's a deal which is roughly 3 trillion dollars in cuts on the table and he says will avert a disaster. Part of the process with be this crappy Supper Cat food commission that will include a trigger so that if the both sides don't come together then automatic cuts will appear.

A first step would include about $1 trillion in spending cuts while raising the debt ceiling about the same amount. The proposal also would set up a special committee of Democratic and Republican legislators from both chambers of Congress to recommend additional deficit reduction steps -- including tax reform as well as reforms to popular entitlement programs such as Medicare and Social Security.

The committee's recommendations would be put to a vote by Congress, without any amendments, by the end of the year. If Congress fails to pass the package, a so-called "trigger" mechanism would enact automatic spending cuts. Either way -- with the package passed by Congress or the trigger of automatic cuts -- a second increase in the debt ceiling would occur, but with an accompanying congressional vote of disapproval.

In addition, the agreement would require both chambers of Congress to vote on a balanced budget amendment to the U.S. Constitution. Such an amendment would require two-thirds majorities in both chambers to pass, followed by ratification by 38 states -- a process likely to take years.

McConnell was preening on the air that we tax too much already in America and have a spending problem so this new deal will satisfy the American people. He means it will satisfy the Tea Party hostage takers and everyone that's a Republican of course. All polling shows Americans DO NOT want Social Security, Medicare and Medicaid touched.

TPM outlines more of the deal here:

As noted here, the issue under contention was the design of a so-called "trigger," -- a penalty written into the bill meant to encourage Congress to pass further bipartisan deficit reduction legislation, authored by a new Special Committee, later this year. Here's what they've reportedly come up with, pending approval from Congressional Democrats and Republicans. From ABC News, the key detail: "The special committee must make recommendations by late November (before Congress' Thanksgiving recess). If Congress does not approve those cuts by December 23, automatic across-the-board cuts go into effect, including cuts to Defense and Medicare. This 'trigger' is designed to force action on the deficit reduction committee's recommendations by making the alternative painful to both Democrats and Republicans."

The Medicare cuts would supposedly fall on Medicare providers, not beneficiaries. The trigger would also include a vote on a Balanced Budget Amendment -- but no requirement that it be sent off to the states.

One source briefed on the negotiations confirms that the ABC story is correct "on the key points." A similar piece in National Journal suggests the Special Committee would not be allowed to reduce the deficit by raising new net tax revenue. The source disputes that notion, as does the ABC report.

Chuck Schumer steps in after Mitch had finished to try and reassure Democrats that there must be incentives put into the trigger.Throwing grandma under the bus for some cuts in defense spending is equitable in what way exactly?

CNN, Sen. Chuck Schumer (D-NY) said the final trigger must include incentives that don't simply allow Republicans to draw a line in the sand over revenues. "What is the sword over the Republican?" Schumer asked.

Well it has to be equal -- the one thing we are certain of, it has to be of equal sharpness and strength. The preference would be some kind of revenues, on wealthy people, on tax loopholes that would be in that. But another alternative, possible, being discussed, no agreement has been reached, would be defense cuts of equal sharpness and magnitude to domestic cuts.

In the past, when the trigger has had significant defense cuts, it's brought the parties to the table and they've come up with a balanced agreement that had both revenues and cuts.

Doesn't that make you feel better?

Daivd Plouffe was on all morning too and tells me that progressives should be happy about all these cuts. I need to hear him scold me like I need a migraine.

Think Progress:

Moreover, the deal includes zero revenue increases and no call for comprehensive tax reform, and achieving these things through the new bipartisan deficit commission will be almost impossible as Republicans are sure to reject it. Still, White House economic adviser Gene Sperling said today on State of the Union that the White House “fine” with the idea that the bill will be “only spending cuts.” He added that Obama won’t seek new revenues before the 2012 election anyway, and will in fact be pushing for a payroll tax cut.

As ThinkProgress’ Matt Yglesias notes, the fallout from this deal may extend far beyond the plan itself:

[A]t this point the biggest damage is to the overall system of government. Obama has successfully transformed massive debt ceiling hostage taking from an act of breathtakingly irresponsible brinksmanship into a proven effective negotiating tactic. Suppose he gets re-elected in 2012. What’s he going to do when this issue recurs in 2013? Every time the president’s party has fewer than 60 votes in the Senate, we may face a recurrence of this crisis.

Nothing is done yet so until the details of a deal are released I can't say for sure this will be the deal, but all the talk today has been infuriating.

Digby writes:

For me this isn't a shocking disappointment. I have felt that this whole process was a disaster from the beginning and it really doesn't matter to me if the Democrats eke out a couple of concessions about defense cuts or close a few loopholes "in return" for these cuts. That isn't "shared sacrifice," it's asking the poorest, oldest and sickest among us to give up a piece of their meager security in exchange for the wealthy giving up some tip money and the defense industry giving up a couple of points of profit. It's stripping the nation of necessary educational, safety and environmental protections while the wealthy greedily absorb more and more of the nation's wealth and the corporations and financial industry gamble with the rest.

The idea that they are even talking about this at a time of nearly 10% official unemployment with the economy looking like it's going back into recession (if it ever left) makes this debate surreal and bizarre. To cut the safety net and shred discretionary spending in massive numbers at a time like this is mind boggling. That it's happening under a Democratic President and a Democratic Senate is profoundly depressing.

This Super Congress idea is frightening as well.

Last weekend, HuffPost reported on the extraordinary powers being delegated to the emerging Super Congress, but beltway media largely reacted by dismissing it as just another Washington commission. On Sunday, Senate Minority Leader Mitch McConnell (R-Ky.) sought to disabuse anyone listening of that notion.

And as I've said before, will we ever see the Bush Tax cuts gone? That would cut almost 4 trillion dollars out of the deficit. I disagree with Ezra's title on this article because Keynesian policies have been thrown under the bus in this entire debate as he tries to find light at the end of a tunnel:

Republicans have shown, that they will block any and all tax increases, no matter what incentives they are offered in return and no matter how dire the consequences of their refusal. Next year’s deadline offers Democrats their only chance to negotiate from a superior strategic position. Republicans will still be able to refuse to raise taxes. But if they do, it won’t matter. The only way they can succeed in keeping taxes from rising is if the Obama administration and the Democrats stand shoulder-to-shoulder with them to extend the Bush tax cuts.

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