President Barack Obama and legislative leaders reached an agreement on Sunday to raise the country’s debt limit ceiling, allowing the U.S. to borrow more money and avoid defaulting on its loans.
The deal calls for nearly $2 trillion in spending cuts to offset the money the federal treasury could borrow. The deal creates a bi-partisan committee tasked with identifying further ways to cut spending. It will also save entitlement programs like Medicare and Social Security, but future deficit reductions outlined in the deal could see those programs receive cuts.
The debt ceiling fight included months of negotiating. Democrats wanted to increase debt limit while cutting spending but also increasing tax revenues. Under various Democratic plans, tax loopholes, decreased subsidies for major corporations like oil companies and increased taxes for wealthy Americans were proposed to bring in extra cash.
Republicans opposed any tax increases, and many of the GOP’s most fiscally conservative members opposed any future government borrowing and called for cuts across the board. Many Republicans also wanted a balanced budget amendment to prevent out-of-control borrowing and spending in the future.
This created a headache for both Democratic and Republican leaders as they attempted to reach an agreement that could pass both the Republican controlled House and the Democratic controlled Senate.
The new agreement was passed by the House and the Senate and signed by Obama on Tuesday—just in time to avoid a government default.
However, Queens Democrats in the House were unhappy with the deal and voted against it. While they acknowledged avoiding a default, which could have led to increased interest rates on credit cards and mortgages for all Americans, was crucial, they felt the cuts were too severe and would ultimately hurt the middle class.
“I am pleased default has been avoided, but disappointed in how it was accomplished,” said Congressman Joe Crowley (D-Jackson Heights) in a statement. Crowley blasted the Republican party for willing to cut “our most important commitments to seniors—Medicare and Social Security” and the Republican’s insistence on avoiding tax increases on the rich.
“I’m willing to compromise and seek a balanced plan that calls for all Americans to work toward economic prosperity, but I cannot support a plan that gives millionaires and billionaires, corporate jets or big oil a free pass,” he said.
Congresswoman Carolyn Maloney (D-Astoria, Manhattan) echoed Crowley’s sentiments. “If this had been a clean vote to raise the debt ceiling, I would have supported it—as I have in the past, and as our nation has done 78 times since 1960,” she said in a statement. “But this was far from a clean vote. The cuts were too large, there were no revenues, no plan for job creation, and thus it was an unbalanced approach to the deficit problem.”
Congressman Gregory Meeks (D-Jamaica) was the only city congressional Democrat to vote in favor of the deal. “In order to get this done right, we very definitely had to have some revenue,” he said to The Politicker. “But if we are going to have a compromise, and there will be no revenue, then entitlements should not be cut, and as of right now entitlements have not been cut.”
In the Senate, Senator Chuck Schumer voted in favor, but junior Senator Kirsten Gillibrand voted against it.
“I strongly believe America must reduce its debt and rein in federal spending…. However, I do not believe this proposal is a fair, well thought out, or balanced deal for our fragile economy or the millions of middle class families struggling to make ends meet,” Gillibrand said in a statement.
by Eric Yun
