Four Myths About the Debt-Ceiling Deal

Richard Eskow

Today we’re watching the end of a brief manufactured crisis – and the beginning of a long national nightmare. The “debt ceiling” deal has been crafted so that “centrist” (i.e., right-wing) Democrats and Republicans can finally implement the draconian measures they both want, but in an indirect way that gives them as little accountability as possible.

As might be expected, there’s a lot of confusion around the deal — in fact, it’s designed to create confusion. Here are four myths about the deal, followed by four ways it’s likely to hurt you personally if it isn’t stopped:

Myth #1: The deal “preserves Social Security and Medicare.”

Right-leaning Democrats are busy telling this story this morning, but it’s not true. It only defers the day of reckoning. Social Security and Medicare are exempted from the first and smaller round of cuts, but not from the larger $1.5 trillion in cuts that the unelected “Super Congress” must find. Half of this unelected group will consist of Republicans pledged to gut these programs, and it’s looking likely that at least half of the Democrats will include Senators like Kent Conrad, the entitlement-cutting solon who briefly shuttled messages between the two parties as this “deal” was being crafted.

The likeliest outcome? Unnecessary and drastic benefit cuts to Social Security that probably involve raising the retirement age even more than it’s already scheduled to rise, the “chained-CPI” that artificially lowers cost-of-living standards to well below what seniors need for their expenses, and possibly a means-testing system that sounds reasonable but will quickly target middle-income Americans.

This isn’t a deal to protect Medicare and Social Security. It’s a deal to deliver those cuts through a body that’s not accountable to voters (except in their own states and districts, which means they’ll probably be chosen from conservative areas). That will allow leaders from both parties to gut these programs without getting their hands dirty, if this deal is approved.

Myth #2: Military spending faces deeps cuts under this plan.

Even the eagle-eyed Ezra Klein falls for this myth when he writes that “a year ago, defense spending was supposed to be sacrosanct” but that “The Pentagon” will now be facing deep cuts.

Not necessarily.

We’re told that half of the cuts will be from “defense spending,” but that necessarily doesn’t mean what you might think it means. As the Democratic Policy and Communications Center explains, “security spending includes defense, state and foreign operations, homeland security, and military construction/veterans affairs.”

In other words, these cuts could include layoffs for TSA workers, reduction in health care or other veteran spending. and shutdowns of US diplomatic missions around the world.

Myth #3: It’s a “compromise.”

Do we really need to rebut this again? The word’s being used by the President, DNC Chair Debbie Wasserman-Schultz, and some other right-tilting Democrats. Let’s review it one more time:

  • No tax increases for the wealthy.
  • Massive spending cuts.
  • A “deficit panel” that will be half Republican, even though Democrats hold both the Senate and the White House and Republicans hold only the House. This panel is likely to mirror others that have recommended deep cuts to Social Security, Medicare, and Medicaid, and have even recommended deeper tax cuts for the wealthy.

If this is a compromise, I’d hate to see what capitulation looks like.

Myth #4: The President and others backing this bill will now “pivot and address the jobs issue.”

As the New York Times reported today that “The nation’s political leaders agreed on Sunday to spend and invest less money in the American economy, a step that economists said risks the reversal of a faltering recovery.”

This is merely making explicit what has been understood all along: The Republicans won’t agree to tax increases for the wealthy, and they won’t spend any money for jobs or rebuilding the economy. They win, everybody else loses.

That plan of inaction is an integral, if unspoken, part of this agreement, and it’s likely to have as great an impact as their agreed-upon actions. Democrats can talking about “pivoting” all they want, but the word “pivot” here seems to be true to its original meaning as a synonym for “spin.”

More Myths

These aren’t the only myths. The deal offers Congress several ways to create another debt ceiling crisis in the future, for example, despite the White House claim that it “removes the cloud of uncertainty over our economy at this critical time.” There’s still a very real possibility the US government could lose its AAA credit rating even if it’s enacted.
But these are the myths that will most immediately affect most American households.

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