lundi 1 août 2011

The bad, the good and the ugly: analyse de l'entente sur Talking points memo.


Voici les principales faiblesses du plan adopté hier soir selon le site Talking points memo:

"Domestic discretionary cuts

The first part of the budget to take a hit -- and that will be hit for at least a few years into the future -- is the one part of the budget that hasn't grown particularly fast over the last decade. And it's also the part that matters the most for regular people: Health programs, education, clean energy, and transportation. It will be cut and capped, in a way that the Congressional Budget Office forecasts will amount to hundreds of billions of dollars less spending for these crucial programs.


What it lacks

Late last year, President Obama struck another big deal with Congressional Republicans -- one that extended all of the Bush tax cuts for two years, but also included a payroll tax holiday for employees, and a one-year extension of unemployment insurance. As the Recovery Act has phased out, those concessions are now the only two things providing the economy with billions of dollars a month of extra juice -- juice that will run out at the end of 2011. Earlier in this debt limit fight, when Obama was aiming for a "grand bargain," he was also pushing to include a year long extension (and possibly a widening) of both of these measures. They didn't make the final cut. And if they don't get extended sometime between now and December 31, the resulting economic contraction will be significantly larger than the contraction caused by the initial spending cuts, which in the early years are relatively small.


What it isn't

Of course, this austerity plan could be worse. Cuts could be heavily frontloaded and larger, and aimed more squarely at the poor and middle class. Defense is a real target here, as are Medicare providers, as opposed to Medicare beneficiaries. In the base deal, veterans and Social Security and Medicaid beneficiaries are walled off from immediate cuts. But at the end of the day, this is still an austerity plan. What the country really needs is a large stimulus -- aid to states, big infrastructure programs and so on -- with an eye toward fiscal consolidation later in the decade. The White House argues that budgetary concerns so dominate the political landscape that new deficit spending right now is out of the question, and only possible in the future if preceded with consolidation measures like this one. But part of the reason Washington is so primed for austerity now is that the White House let that faction of the establishment seize the initiative. It didn't necessarily have to be so.


What it doesn't do

Literally nothing about this plan will do anything to slow the growth of health care costs -- the true driver of the country's structural deficit. A future deficit plan, one that includes entitlement and tax reforms, might do that, but there's really no guarantee. In the end, this plan assures that most of the savings will come from programs that don't really need, and can't easily afford, to be cut. It doesn't change the nature of government, as conservatives want, and it doesn't take the "deficit" issue off the table, as battle-weary liberals would like. In that way, it's just sort of mean. It also contains zero guarantees that we'll see any fresh sources of federal revenues. The down payment on deficit reduction comes entirely from discretionary cuts, defense and non-defense. The committee process it sets up doesn't forbid tax increases, but Republicans will fight them vigorously. And if that fight turns into gridlock, and the statutory enforcement mechanism kicks in, it'll be all cuts. By the time everything called for in this bill takes effect, Treasury could still be taking in historically low levels of revenues."

http://tpmdc.talkingpointsmemo.com/2011/08/the-four-big-problems-with-and-four-silver-linings-around-the-debt-limit-deal.php?ref=fpa

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