House Passes Debt Agreement

House Passes Debt Agreement

Senate set to vote on deal at noon Tuesday.

Monday evening the U.S. House of Representatives voted to pass the debt agreement that was announced by President Obama on Sunday. The final tally was 269 to 161 with 174 Republicans voting for the measure and 66 against while the Democrats spilt down the middle, 95 for and 95 against. The U.S. Senate is expected to approve the measure Tuesday at noon and the President will sign it almost immediately following the vote.

Following the passage by the House two groups vocally attacked the proposal, Tea Party Republicans and liberal Democrats. Tea Party activists accused the GOP leadership of caving in and lambasted them for not cutting more. Liberals were upset with the amount of cuts that were made.

"I can't believe something as routine as the debt ceiling is being used to extort $2.5 trillion in cuts to investments Americans need," said Rep. Lynn Woolsey, D-Calif.

Tea Party Nation founder Judson Phillips called the deal "political suicide." Legislators who voted for the bill on Monday were warned by Tea Party activists and legislators that they will be targeted in 2012 primaries.

Yet some saw the deal as a large, first step on the road toward a rational federal budget. Rep. Allen West, R-Fla., said that sometimes to get to the ultimate objective, intermediate objectives are needed.

"This is a down payment on the problem," said House Budget Committee Chairman Paul Ryan, R-Wis. "It's a good step in the right direction. And it is a huge cultural change to this institution."

Under the proposal, about $900 billion would be cut during the next decade through spending cuts and the special committee of legislators that will be formed this fall by the agreement will seek an additional $1.5 trillion in reductions. If the committee is unsuccessful $1.2 trillion would be cut equally from defense and domestic program spending.

A surprising aspect of the debt agreement that the $900 billion left farm subsidies untouched, although House GOP leaders have for several months said significant farm program cuts would be part of any deal to raise the debt ceiling. President Obama's top economic advisor Gene Sperling explained why that was the case.

"There was a decision made to just deal with discretionary spending," Sperling said. "So issues involving any tax expenditures or farm subsidies were not part of the deficit reduction down payment that was part of this agreement."

However, agriculture spending is expected to be a priority target towards the $1.5 trillion in cuts that the special commission must find by Thanksgiving.

 

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