We put a gun to our head and agreed to a sequestration that, in the 99% likelihood of the debt commission failing to agree on savings, would cut $500 billion from Defense (after Defense already shouldered a disproportionate share of the cuts from spending caps) and $117 billion from Medicare providers.What are the results of the Budget Control Act?
- The debt has increased by almost $1.6 trillion.
- Despite the talk about how the debt ceiling deal would preserve our credit and save us from default, our credit rating was downgraded for the first time in history.
- Obamacare was totally preserved.
- Republicans have placed tax increases on the table, further attenuating our leverage for the impending tax fight at the end of the year
- Most importantly, we are left with the embarrassment of begging Democrats to rescind the only true spending cuts that will actually take effect in 2013. Between the original $465 billion in cuts to defense from the spending caps and the additional $500 billion from sequestration, there will be real cuts in nominal terms (some of it is baseline, but unlike with other proposed cuts, there will be several hundred billion of nominal cuts). The debt ceiling deal is now causing a gratuitous schism within the conservative coalition over how to overturn (or accept) the sequester.
