Debt Debacle and Tax Increases Diverted, For Now

The $2.4 trillion debt limit increase easily sailed through the Senate on Tuesday and was sent on its way to President Barack Obama for his signature.

The bipartisan vote of 74 to 26 ends the months-long battle on Capitol Hill without tax hikes, but includes a revived measure to require votes on a balanced budget amendment to the Constitution.

“This bill does not solve the problem, but it forces Washington to admit that it has one,” said Senate Minority Leader Mitch McConnell (R.–Ky.).

“The American people sent a wave of new lawmakers to Congress in last November’s election with a very clear mandate to put our nation’s fiscal house in order,” McConnell said.

“Those of us who’d been fighting the big-government policies of Democrat majorities in Congress welcomed them into our ranks. Together we’ve held the line. And slowly but surely, we’ve started turning things around,” said McConnell.

“The push and pull Americans saw in Washington these past few weeks was not gridlock. It was the will of the people working itself out in a political system that was never meant to be pretty,” McConnell said.

Obama signed the legislation without ceremony and behind closed doors at the White House.

As soon as the legislation passed, Obama renewed his call for higher taxes on industry and “wealthy” Americans.

“We can’t balance the budget on the backs of the very people who have borne the brunt of this very recession,” Obama said.

“Everyone is going to have to chip in. It’s only fair,” said Obama.

The debt ceiling agreement initially cuts $917 billion in spending, with another $1.5 trillion
offsets initiated by a new bicameral committee.

The House Ways and Means Committee and Senate Finance Committee have the authority to raise and lower taxes but Democrats still expressed hope that the new super committee would propose tax hikes, Republicans say that won’t happen.

Resistance from House Republicans who caucus with the Tea Party was credited by politicians on both sides of the aisle for getting what House Speaker John Boehner said was 98 percent of what they wanted in the final deal.

“If some campaign pledges had not been made in 2010 we might not be here,” said Sen. Roy Blunt, (R.–Missouri).

“This is what the process is all about and how it’s supposed to work,” Blunt said before adding “we’d have more spending cuts if I was writing this bill.”

Congress will spend more on the debt over the next ten years than on defense spending, said Sen. Lamar Alexander (R.–Tenn.).

“It’s time to balance the government books and live within our means,” Alexander said. “Today is the first step towards stopping Washington from spending money it doesn’t have.”

Republican senators voting against the legislation include Kelly Ayotte (N.H.), Dan Coats (Ind.), Saxby Chambliss (Ga.), Tom Coburn  (Okla.), Jim DeMint (S.C.), Lindsay Graham (S.C.) Chuck Grassley (Iowa), Orrin Hatch (Utah), James Inhofe (Okla.), Ron Johnson (Wisc.), Dean Heller (Nev.), Mike Lee (Utah), Jerry Moran (Kan.), Rand Paul (Ky.), Marco Rubio (Fla.), Jeff Sessions and Richard Shelby (Ala.), Pat Toomey (Penn.) and David Vitter (La.).

Democrats voting against the compromise include Sens. Kirsten Gillibrand (N.Y.), Tom Harkin (Iowa), Frank Lautenberg (N.J.), Bob Menendez (N.J.), Ben Nelson (Neb.), and Independent Bernie Sanders (Vt.).

Sen. Mike Lee (R.–Utah) said he voted against the measure because it did not require a balanced budget amendment to the Constitution.

“To my great astonishment, some of my colleagues … suggested this is somehow a radical idea, so absurd it is not to be considered,” Lee said.

A Republican House plan to enact the amendment before the debt limit could be substantially raised was tabled last week by Senate Democrats and a handful of Republicans.

“The only permanent solution is that which involved an amendment to the Constitution,” Lee said. “What we need is fundamental change by the way we spend money in Washington.”

Sen. Orrin Hatch (R.–Utah) voted against the plan, saying “Cut, Cap, and Balance” was the better proposal.

“There are some achievements in this proposal that conservatives can hang their hat on,” Hatch said.

“But I regret to say that I will not be able to support it, because it does not sufficiently provide us with the solution to the debt crisis that the markets are demanding,” Hatch said.

Sen. Jeff Sessions (R.–Ala.), ranking member of the Senate Budget Committee, said he voted against the measure because it made him “uneasy.”

But he acknowledged “We’ve got ourselves in a fix and [the debt limit] will have to be raised.”
Senate Majority Leader Harry Reid (R.–Nev.) was also disappointed that the agreement contained zero tax increases, but said such “equal sharing” will be a priority for Democrats later this session.

But first, Reid said, “Congress must return to its most important job, creating jobs.”

“So we’ll get back to that after we finish our summer break,” Reid said.