Why We Need a Compromise on the Debt Ceiling

The clock is ticking for the Congress to reach an agreement on the Debt Ceiling. The Debt Ceiling was created in 1917 and is used to cap the amount that Congress can borrow. The original Debt Ceiling was set at 11.5 billion dollars, and now the ceiling is at 14.26 trillion. Debt ceiling is usually raised at the time of a spending  hikes or tax cuts is the reason for the raising of the ceiling.

Now today's impasse is that Republicans with the help of their Tea Party base are finding the raising of the Debt Ceiling unacceptable, unless drastic cuts are made to lower the deficit. The cuts that the Republican propose are for 2.5 trillion dollars of cuts for the next ten years in exchange for the Debt Ceiling to be raised.

The Democrats on the other hand want to make it an 80/20 split between cuts and tax increases. Some of the options that the Democrats have mention was to get rid of tax breaks for items like yachts and private jets, and have even gone as far to rescind the Bush Tax Cuts from people that make more than 500,000 dollars. Meager hikes that only affect the wealthy individuals on luxury items.

The problem that arises is the the Republican Party does not want to increase taxes on anything. The idea of raising taxes on yachts or private jets is a non-starter. Pretty much it means do not tax anything or anyone, but only accept budget cuts to social programs. This is disturbing in American society. What is being set up is Un-American.

Here is why. One America is about setting up equal opportunity for all of its citizens. Hence in the Declaration of Independence our founding fathers wrote all men are created equal.( Now we know their understanding and what is accepted now are different, but the idea stays the same.) If all men/women are created equal should be allowed to have the same opportunity. This is where social programs helped equalize the opportunities  for people that were at a disadvantage.

 People who argue with this rationale say that once a person made it to the top that they are a self made man and owe no one for their success or should pay higher taxes. This is laughable. Anyone who was successful has had help. Lets take a store for an example. Minimum wage is 7.25 nationally. Living wage is considered about 11 dollars an hour. The person who starts a business usually pays minimum wage not living wage. Once some one has more money the wages do not change. These people that work 40hrs a week on minimum wage are more likely to rely on government assistance than people who make more. The sad thing is that its their labor that makes huge companies successful.

I do agree we need to lower our debt. If we do not we will be on a course to ruin, but we have to be reasonable human beings and not allow our greed to hamper this process. We are only as strong as our weakest link, and if we follow with only cuts we will become a weaker nation.

Congress in Defiance: Congressional Democrats and Republicans Saying No to the Obama Tax Plan

Two days ago, the Obama Administration presented a bipartisan plan to stop the gridlock on the Bush-era Tax Cuts and created a tax compromise with Congressional Republicans. This compromise; would extend all of the Bush-era Tax Cuts for all income levels for two years, index the alternative minimum tax for inflation, drop the estate tax down from 45 percent to 35 percent on all income above five million dollars, an extension of Unemployment Benefits for all that apply, a payroll tax holiday of 2 percent, an extension of all tax credits, would allow businesses to write off their capital improvements, and also allow business to keep a research and development tax credit. Overall, with this plan, everyone wins, but this does not help the country to become more fiscally responsible, help the people in the greatest need.


The cost of this plan would be 990 billion dollars. That is 171 billion more than the Stimulus spending in back in 2009. Republicans back then and during the 2010 general election argued that the Stimulus spending was a waste of taxpayer money. In article published in August of this year at the Brookings Institute Senior Fellow Gary Burtless argued, "there are many indications that these policies have been successful in achieving
their intended goals." The tax compromise though, does not look like a policy that will help all Americans.

Today in the Huffington Post Jason Linkins reports that wage earners that make between 20,000 and 40,000 dollars will see an increase in their taxes due to the reduction of available tax credits for that income bracket. While the richest people get the greatest benefit. For example, the richest Americans will benefit from the tax cut, the estate tax, and benefit from the payroll tax holiday. Granted the poorer Americans will receive the payroll tax holiday, but their benefit from the tax holiday is smaller than the lost tax credits.

Overall, the Obama Tax Compromise should not be passed. Obama administration made the best compromise possible with Congressional Republicans, but the problem is that the rich get richer while the poor become the pawns for the powerful. Obama promised during the 2008 election that he would not extend the Bush-era Tax Cuts for the wealthiest. This compromise breaks that promise and should not be supported by Congressional Democrats.

It would be for the best for Congress to reject this plan, because what the nation will give up will hurt us in the end. Example this plan increases the deficit by 990 billion dollars over two years. This plan is supported by Republican leadership, which argued that by electing them they would help cut the deficit. This plan does not do that. If Republicans are serious about deficit reduction, they need to vote against the plan.

Compromise is a great item and should have been used more often during the 111th Congress. Unfortunately, though, this is not one of those times. A new plan needs to put on the drawing board that limits the impact on the deficit, but does the greatest Common Civic Good.

House Democrats Finally Showing Some Backbone

Today the leadership of the House Democrats announced that they will proceed with a vote on extending the Bush-era tax cuts for wage earners that make less than 250,000 dollars. This is a major step forward made by the Democrats. Instead  allowing the cuts to expire or having the Republicans bully them into extending the cuts for all wage earners, they finally showed some backbone. They are following through with the President's promise to only extend the cuts to people making 250,000 dollars of less.

The problem that arises from this move by the House Democrats is that Republican Minority Mitch McConnell (Ky)  stated that that Republicans in the Senate will not take up any legislation unless all of the Bush-era tax cuts are extended for all wage earners. This means that the tax cut extension to the middle class will be delayed or will possibly not get passed. With the Senate bogged down with the possible incoming battle on who will have their tax rate extended, the outlook of other possible legislation passing  through the Senate during lame duck session is minimal. The problem with this is that many things that the American people want are stuck in the Senate.

For success in the lame duck session both houses of Congress need to go to work and stop playing political games. Political games will not lead to success in passing any legislation that will help the American people. Overall, Senate Republicans need to learn that they need to compromise instead of playing hard ball.