Economic Armageddon will have to wait as the debt crisis has been averted with the 11th hour deal finalized on Tuesday. The plan is not exactly what each party wanted, but with America seemingly looking down the barrel of a gun, politicians struck a compromise.
In the end, Republicans won the day. Their policies – though only shells of their original plans – were put into place with the deal. With the implementation of their fiscal policies, Republicans have taken the reins in the debt debate, and in major policy formulation. They have started America down the path towards balanced budgets and fiscal responsibility.
Both sides had to make concessions in terms of their overall goals, but Republicans were able to muscle their way to spending cuts with no revenue increases while also only raising the debt ceiling minimally. “We have got 98% of what we wanted,” said House Speaker John Boehner (R-Ohio).
The votes on the floor of the House indicated which party was able to better implement their policies in the bi-partisan bill. Three-quarters of Republicans – including over half of Tea Party members – voted for the bill while only half of the Democratic caucus came out in favor. On the Senate floor, 28 of the 47 Republican Senators voted in favor.
There are drawbacks, though. The bill is only a patch job to get us through the immediate future. The deal does nothing to stimulate the economy.
But the hope is the deal will kick-start America in the future, as reined-in spending will keep debt down and investors happy. The conservative strategy will balance budgets and lower taxes, a boost to growth and investment.
The minimal rise in the debt ceiling, between $2.1-$2.4 trillion, is estimated to get us through 2012, and will set the stage for a heated election season. The Republicans did their part, they played the partisan hardball needed to get what they wanted. The Democrats, on the other hand, were seemingly unable to pass any of their meaningful agenda items.
The $2.1 trillion savings over the next decade are not the $6 trillion proposed by Rep. Paul Ryan (R-Wisc.) in April, but it is a start. The Republicans were able to weasel out a deal that, for now, does not include revenue increases.
Republicans were able to sneak in small cuts to Medicare, which effect Medicare providers the most, as a 2% cut in provider pay will be implemented if the bi-partisan committee does not find enough savings in other areas. This signifies somewhat of a political win for the party that is likely to rile up the GOP base tired of paying for the “socialist” health care program.
With 2012 right around the corner the Republicans set themselves up to hit a home run come election season, especially if the bill continues to play out in the Republicans' favor over the next year. The White House will almost assuredly be theirs and the Senate could be very well on its way to turning red as well.
But if the plan fails to speed up recovery, the Republican party will be lambasted for their plan and it will decimate them come 2012.
The Republicans came out slightly ahead with debt debate, but this is just the first leg in a long race. Voters recognize that if these agenda items fail to lead us on a path of a recovery then the Republican Party is largely to blame. They might have won the battle but it is still yet to be seen if they won the war.
Photo Credit: Mike Licht