Tuesday, August 30, 2011

Debt Man Walking: The Verdict

So, after reading this bill over and letting it peculate a little, I've come to a conclusion about it. In short, the entire affair is a sham.
Allow me to explain. After displaying unparalleled brinksmanship and a profound ignorance about the potential consequences of defaulting, Congress agreed on a plan that is almost entirely spending cuts. However, to satiate the Left, the debt deal included the creation of a "Supercongress", which is really nothing more than a committee whose task is to come up with a plan to reduce America's deficit. This group of 12 people is made up of six conservatives and six liberals; six from the House and six from the Senate. They've got until December to present the nation with their grand plan, at which point their resolution must get an up or down vote; if it doesn't, then huge spending cuts go into effect- half from domestic spending and half from military spending.

Here's the problem.

Section 402(e)(2) states that if the House accepts the Supercongress' resolution first and sends it to the Senate, then the thing must be voted on posthaste and cannot be sent to another committee to be altered. BUT, if the Senate accepts the resolution first and sends it to the House, the House can send it to a committee- if the resolution contains any revenue. In other words, the House can shuffle the entire Supercongress' work off to a committee if it has tax increases (or a removal of tax cuts to pre-Bush levels, for example).

Why is that bad?

The House, as you may know, is largely Republican. Many of these representatives have taken this pledge to never increase taxes on anybody. It's the brainchild of Grover Norquist and the Americans for Tax Reform group that champions such causes as elimination of the Fairness Doctrine in the name of "free speech" (or, rather, speech only for those who can afford prime time costs without any government regulations stating channels must allot equal airtime for opposing viewpoints)... but I digress. Through Mr. Norquist's influence, it has become conservative dogma that increasing taxes on any business at all, even enormous multinational conglomerates, is unacceptable. The House, therefore, has the unique composition to push the entire Supercongress proposal into committee (should it contain any revenue language) where it will be detained at length, preventing meaningful debate on the House floor until the last minute. This is, of course, all before the overwhelmingly Republican House votes on it- which, if it contains revenue, will be a vote of (in all likelihood) "no". In this scenario, the bill fails, and cuts are enacted- but no revenue.

The inclusion of cuts to defense should the Supercongress' measure not pass is the only reason a Republican would vote on it; such an action could, in an election year, be painted as being "against the military" or "against jobs" (as a base closing in someone's district would be terrible press). But just as likely, in my eyes, is the opportunity that military cuts present the Republican party: the chance to say "Look how serious about reigning in government spending we are! We even slashed the parts of the budget we like!", without ever addressing the other half of the budget-balancing equation. Their corporate patrons, with their newly-minted Personhood thanks to Citizens United, will surely thank them for not pressing them to pay taxes.

The idea of the Supercongress as a compromise is, at its core, a falsehood; manufactured bipartisanship and nothing more. I expected more from the President's negotiations.

Thursday, August 11, 2011

The "Debt Man Walking" Series: Translating WTF Just Passed Congress

Hoo mama, it has been a long time since I wrote anything. Its been a busy year, not only personally but for the country itself. The latest circus we were all just subjected to, as I'm sure you know, was the debt crisis debate.

Now, I have my opinions about this bill that was just passed, but before I mention any of them I want to provide you, my countless (read: two) readers with a copy of the bill in its unabridged, unedited format. This way, if you read my summary and decide "This guy is just full of it", then you can read exactly what Congress wrote and what I was referencing.
After that, I will post on each of the bill's five sections, providing summary on the points that caught my attention. I do condense many pages down into a handful of bullet points in some cases, but this was most often because the bill was setting pages of definitions, or listing nothing but budget limits for each of the next ten years, etc. If I missed something or misinterpreted it, as always, hit me up about it and we'll see if it needs changing.
Lastly, I'll provide my commentary about the bill as a whole.

But! Without further adieu, I give you:The Budget Control Act of 2011. Enjoy.

Debt Man Walking: Translating the Debt Bill's Fifth and Final Title

Title V (p. 71)- Pell Grant and Student Loan Program Changes
Section 501- Federal Pell Grants
Changes to the Higher Education Act of 1965 take place; in order to comment on them I would have to read that specific bill and see what the apparent funding changes actually refer to.

Sec. 502- Termination of Authority to Make Interest-Subsidized Loans to Graduate and Professional Students
Again, one would have to reference the aforementioned Section 501 act, but it seems as if...
  • After July 1, 2012, no grad/professional student will be eligible for Federal Direct Stafford Loans (Sec. 502, (a)(1).)
  • ...Unless you're studying the right major, which is listed in Paragraph 3 or 4B under 484b of the Higher Education Act of 1965.
  • The most you could borrow from Unsubsidized Stafford Loans would be the maximum amount as set by (481(a)(2)) of the Higher Ed Act, plus an amount equal to the amount of Subsidized loans you could have gotten if (502(3)(ii)) hadn't been written into the 2011 Budget Bill. Um, what?

Sec. 503- Termination of Direct Loan Repayment Incentives
  • Again, they go and amend the Higher Education Act by changing its language in certain parts, pursuant to their new July 1, 2012 deadline for loan changes. But that notwithstanding, after that date, new applicants for loans will not be eligible for repayment incentives of any kind (including reductions in interest, origination fees (?), etc).
  • ...Unless the student agrees to have loan payments automatically withdrawn from a bank account (as opposed to mailing a check). If they agree to that, it seems like incentives like interest rate reduction are still on the table.

Section 504- Inapplicability of Title IV Negotiated Rulemaking and Master Calendar Exception
Certain sections of the Higher Ed Act (482(c) and 492) don't apply to this bill.

Debt Man Walking: Translating the Debt Bill's Fourth Title

Title IV (p.52)- Joint Select Committee on Deficit Reduction or The Supercongress.
Section 401
Their job is to cut at least 1.5 trillion between 2012 and 2021.
  • It's going to be a 12-man team; 6 Democrats and 6 Republicans, 6 of whom are to come from the House and 6 of whom are to come from the Senate.
  • The group is to have two Co-Chairs. The Speaker of the House is to select one of them, and the Majority Leader of the Senate is to select the other one, after the group's membership is chosen. They've got 14 days to do that from the time the Budget Bill is signed- so, by August 16th.
  • The House and the Senate have until October 14th, 2011 to give their recommendations to the Supercongress for consideration.
Said Supercongress then has a little over one month, until November 23, 2011 to produce a report on its suggestions, complete with Congressional Budget Office (CBO) estimations on how much money their plans will save (not only between 2012-2021, but beyond).
  • The final version of the report only requires a simple majority of the committee members to sign off on it.
  • If a committee member has any further thoughts or beef he/she wants tacked onto it, they've got three days to file it with the head of the committee (Sec 401, (b)(3)(B)(iii). )
  • If the committee suggests rules that change the "Rules of the House/Senate", those parts of their report are only "suggestions".
  • The final version of this report is due on Obama's desk by December 2, 2011. It's also due to the VP, the Speaker, and the Majority/Minority leaders in Congress. Furthermore, it's to be submitted to the public.
The committee needs 7 members present to hold a quorum, or, to call the session to order and get shit done. Proxy voting is not allowed. The Supercongress can hold hearings and compel witnesses to show up as needed. Public notice will be given at least a week in advance.

Section 402- Expedited Consideration of Joint Committee Recommendations
When the committee agrees on the finalized version of their report, it can be brought up for a vote the next business day. If the Supercongress gives their report to another committee for consideration, that committee has until December 9th to report their views to Congress, or else they can shut the hell up about it. Congress has to vote on the final report by December 23, 2011.
  • The final version cannot be amended. Nor can it be postponed or delayed in any way, shape, or form (Sec 402, (c)(4).)
  • If one house sends an approved version of the Supercongress' work over to the other, the receiving house can't send it through committee. It has to be voted on.
  • ...Unless the case is that the Senate sends it to the house, and the measure sent to them is a Revenue measure. So essentially, if the Senate sends the House a measure about taxes, they can committee it. (Sec 402, (e)(2).)
Section 403- Funding
Both houses pay for the Supercongress' expenses.

Section 404- Rulemaking
The Houses make these rules as per their set and Constitutional powers.

Debt Man Walking: Translating the Debt Bill's Third Title

Title III (p. 31)- Debt Ceiling Disapproval Process
Section 301- Debt Ceiling Disapproval Process
This section amends previous legislation to accommodate the budget bill and it's two-tier debt increase process (once for 400 billion, the second for 500 billion). Additionally states that if we get to within 100 billion of the new limit, the President can ask for an additional 1.2-1.5 trillion in debt ceiling increases- though he'll need the Secretary of the Treasury and/or the Archivist of the United States (really?) to back him up on it (Sec 301, (a)(2)).
  • The Congress can block that second 500 billion increase if they pass a resolution of disapproval within 15 days of the 400 billion increase- but those 15 days count whether or not Congress is in session.
  • The Speaker is supposed to reconvene Congress within two calendar days of getting notice of the 400 billion increase, I think.
  • If the House wants to forge a joint resolution of disapproval, they have to take a vote on it within six days of the resolution being introduced, and by that point there can be no more legislative delay tomfoolery; it gets its up or down vote.
  • The Senate works a little differently, but most of the basics are the same. They've got two days to reconvene (if they're on vacation); they have to move on it within six days of it being introduced; they will then have ten hours of debate once the joint motion is brought to the floor, after which time there can be no more delays and they have to vote on it.
  • If they don't get a joint resolution going of their own, then whatever the House sends them gets expedited consideration.
If the Congress passes their joint measure of displeasure, and then overcomes Obama vetoing it or otherwise trying to kill it, then further debt increases don't take place, AND spending must be cut by 400 billion to match the ceiling raise of 400 billion that DID pass.

Section 302- Enforcement of Budget Goal
This section amends the Deficit Control Act of 1985 to account for the new limits on discretionary spending both on defense and nondefense categories.

Debt Man Walking: Translating the Debt Bill's Second Title

Title II (p. 27)- Vote on the Balanced Budget Amendment
Section 201- Vote on the Balanced Budget Amendment
Congress is required to vote on a Balanced Budget Amendment between September 30 and December 31, 2011.

Section 202- Consideration by the Other House
If the House receives the joint resolution to amend the Constitution from the house, they have to send it to their Committee on the Judiciary. They have five business days to "report the joint resolution" (make a decision on it?) to the House; if they don't, the House will bar them from further deliberation on it.
  • ...Unless the House votes to not bar them from further deliberation. I think.
  • Regardless, it looks like if it passes the Committee on the Judiciary, the House will get 20 minutes of further debate on the floor per side; so, 20 minutes of "Balanced Budget is the best!" and 20 minutes of "Are you fucking crazy?!"
So, this part is kind of dense, but it looks like the House can begin the preparation to vote on this Amendment after the Committee has signed off on it (unless they were told to GTFO) and the 20 minutes per side of debate have gone down. ...I think.
  • If it makes it this far, there's more debate on the floor of the House; looks like one hour of debate per side, and there's one Motion to Limit Debate up for grabs.
It doesn't look like anyone can call for a re-vote on the passage of the joint resolution... so, does that mean they can't vote to send it back to the Committee?

If the Senate receives the joint resolution to amend the Constitution from the house, they too send it to the "appropriate committee" for five days' consideration. If they don't come to an agreement before that, they get the boot and the measure gets put on the calendar.
  • The Senate gets 20 hours (10 per side) to debate the issue, but they cannot change the Amendment as it stands.
  • It looks like they're required to vote on the Amendment by the end of the seventh business day since they received the Amendment from their committee, but they can obviously do it before that deadline.

Debt Man Walking: Translating the Debt Bill's First Title

Title I (p. 2)- Ten-Year Discretionary Caps with Sequester
Section 101- Enforcing Discretionary Spending Limits
  • If there is a budget breach in any fiscal year, then 15 days after Congress finishes a session, a "sequestration" takes place to fix the breach.
  • If there is a breach (i.e., if some area spends too much in a year), then they will get cut by a certain amount. Admittedly, between legalese and math, I don't understand the specifics of what the cutting process will be.
There are, however, categories that are exempt from this.

  • It appears as though the President can make some personnel exempt from the "you spent too much" cuts, and if he does, then a compensation has to come out of other peoples' budgets. Those "other people", however, cannot be military.
  • If something spends too much by June 30 of any year, then during the next fiscal year that program's budget will be reduced by the amount it went over.
  • If a program takes effect on the current fiscal year and goes over, they get nailed with cuts 15 days later.
  • As soon as is practical, the Congressional Budget Office (CBO) will come out with its estimates on each program's financial impact. Around the same time, the Office of Management and Budget (OMB) will release its own estimates. If there are significant differences between the two reports, the OMB has to step up and explain where the differences lie.
  • OMB and CBO estimates will be made using up-to-date calculation methods and definitions (Sec. 101, (a)(7)(C)). This is an example of information I'm not covering, since it's kind of "duh".
  • If it is decided that the War on Terror or other battles require extra money, then they get it (Sec 101, (b)(2)(A)).
"Continuing Disability Reviews" and "redeterminations" for Social Security Titles II(2) and XVI (16) are capped at a certain amount of funding by year. This starts at 623 million for 2012 and rises each year until 2021, where it gets 1.31 billion dollars. (Sec. 101, (b)(2)(B)(I-X)).
  • CDRs are defined in the Social Security Act under sections 221(i) and 1614(a)(4).
  • "Redetermination" means a review of eligibility for services, as defined under the Social Security Act, sections 1611(c)(1) and 1614(a)(3)(H).

  • The Department of Health and Human Services has a set amount of money to use for fighting health care fraud; it starts at 270 million in 2012 and rises each year until 2021, when it has 496 million (Sec. 101, (b)(2)(C)(I-X)).
  • Disaster Relief can increase its funding to an amount equal to the amount pre-set for it (so, it can double its funding?), as long as that does not come out to be more than the average amount spent on disaster relief for the previous ten years.
  • The overall discretionary spending limits are set in Sec. 101, (c)(1-10); in 2012, for example, the government has 684 billion in "security" spending and 359 billion in "nonsecurity" spending approved, for a grand total of 1.043 trillion dollars. That rises to 1.234 trillion dollars in 2021, though that isn't broken down by security/nonsecurity spending.

Section 102- Definitions
Starting on page 16, this section defines the technical jargon we've encountered so far. As I've already tried to translate this document into English, I won't belabor the point; if you want the word for word definitions of the Legalese, pages 16-18 are your friends.

Section 103- Reports and Orders
This section just contains some amendments to older bills, striking out (for instance) dates we've already passed and setting new ones.

Section 104- Expiration
This section nullifies some sections of the Emergency Deficit Control Act of 1985.

Section 105- Amendments to the Congressional Budget and Impoundment Control Act of 1974
  • This section is pretty dense, but from what I can tell, if the House takes action that actively reduces revenue, that effect on the budget won't be counted towards various parts of the Act that titles this section. That sounds like it could be trouble.
  • It is now "out of order" for the House or the Senate to try and put forward anything that would exceed the discretionary spending limits set forth in this bill.

Section 106- Senate Budget Enforcement
  • This section outlines procedure on how the budget limits will be enforced (obviously), stating dates that certain motions have to be filed and through which mechanisms they will be handled.