Friday, August 12, 2011

Worst Legislation In History?

Three weeks ago, Democrats in the Senate led by Senate Majority Leader Harry Reid defeated the Cut Cap and Balance Act of 2011, calling it "some of the worst legislation in history". In a nutshell, the bill would Cut spending, Cap the budget at a certain percentage of the GDP, and required a Balanced budget amendment. Here is the rundown of the bill's key points.

Cuts total spending by $111 billion in FY 2012. The savings is divided as follows:
Reduce non-security discretionary spending below 2008 levels, which saves $76 billion.
$35 billion cut to non-veterans, non-Medicare, non-Social Security mandatory spending.
Defense budget at President’s level.

Total federal spending is scaled back based on the glide path for the fiscal years below:
  • 2012, 22.5% of GDP.
  • 2013, 21.7% of GDP.
  • 2014, 20.8% of GDP.
  • 2015, 20.2% of GDP.
  • 2016, 20.2% of GDP.
  • 2017, 20.0% of GDP.
  • 2018, 19.7% of GDP.
  • 2019, 19.9% of GDP.
  • 2020, 19.9% of GDP.
  • 2021, 19.9% of GDP.


Requires the passage of a Balanced Budget Amendment before raising the nation’s debt limit.

The bill was killed on a partisan vote 51-46 with all 51 being Democrats. John Kerry and Kirsten Gillibrand did not vote, but I'll give you one guess how they would have. John McCain was the lone abstaining Republican.

Fast forward 3 weeks to today. The S&P has downgraded the United States debt credit rating from AAA to AA+, and Democrats in government are pissed. They send the S&P to an SEC hearing as to why they downgraded the credit rating. The question was finally asked what kind of budget cuts would have saved the AAA rating. Joydeep Mukherji answered with this;
“What S&P wanted to see from the deal was a stabilization in the debt-to-GDP ratio over time,” he said. “We wanted to see something other than a line that kept going up. That’s what we didn’t see.”

Ironic how "the worst legislation in history" actually contained EXACTLY what would have saved the United State's AAA rating.

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