With Time Running Out Lawmakers Must “Git Er Done”

Posted on July 5, 2011. Filed under: Uncategorized | Tags: , , , , , , , , , , |

By Carl Chancellor

Senators were back on the Hill Tuesday after being forced to forgo their Fourth of July recess to work on a budget deal that would raise the debt ceiling by August 2 and allow the government to continue paying its bills.

Federal lawmakers, who have been mired in partisan gridlock, have less than 30 days to increase the nation’s $14.3 trillion debt ceiling and avoid a calamitous default that could wreak havoc with world financial markets and plunge the United States back into recession.

Senate Majority Leader Harry Reid (D-Nevada), morphing into Larry the Cable Guy, called his colleagues back to work saying—“There is still so much to do to put Americans back to work, cut our deficit and get our economy back on track…that work is too important, the obstacles too steep and the time too short to waste even a moment.”

It remains to be seen just how much work will actually be accomplished.

Sen. Rand Paul (R-Kentucky) announced he is planning a Senate filibuster with the goal of tying any agreement on raising the debt ceiling to passage of a balanced budget amendment, which has absolutely no chance of passing.

Since the budget talks broke down nearly two weeks ago over so-called “tax hikes,” there has been almost no progress on raising the debt ceiling. Republicans have rejected any deal that includes revenues from changes in tax credits, tax subsidies or special interest tax breaks. While Democrats warn that a “spending cut only” deal won’t fly.

Don’t be surprised if one or two of the following Democratic tax expenditure proposals, which are now under discussion, make it into a final budget bill in some form:
• Elimination of oil company friendly-tax breaks and accounting rules that could raise as much as $119 billion in revenue of 10 years
• Slowing tax depreciation on certain business investments, including private jets
• Limiting home mortgage interest deductions to taxpayers making more than $500,000 a year

While agreement on a major deficit reduction and debt ceiling increase deal remains possible before the August 2 deadline, it will take considerable time to put such an agreement into legislative language. Members of Congress are often reluctant to make a commitment to vote for any complex package until they see exactly how the language is written. It could take up to three weeks to get legislative language completed and up to a week to garner enough support for it to pass in both chambers. For these reasons, the sooner a deal is reached the better.

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