After 2 months of intense fighting and bickering, politicians in Washington have come to an agreement that, in the most minimal way, will avert the fiscal cliff. However, the politicians only agreed to revenue rate issues and delayed the spending issues for only two months. So in only 2 months, there will be another big fight, which means that the fight actually begins now.
If that were not enough, there will be another major political battle over raising the debt ceiling, which will need to be raised in the short term, within possibly 60 to 90 days as well. One would not be faulted for wondering when the politicians will actually Govern and deal with other important issues such as creating jobs, stimulating the economy, skilled jobs training, foreign wars, energy concerns, etc. It seems that the politicians are not gauging the overall anger of the public. It appears that each representative is gauging how the political battles are received relative to their political districts. If it plays well in their district, they have little concern about how their vote plays nationally.
The politicians are already positioning themselves for the upcoming debt ceiling increase request by the president. Just today, House Speaker John Boehner has already stated that he will not meet with President Obama as part of the negotiations. President Obama stated that, unlike last years Debt Ceiling fight, he will not have a fight over the debt ceiling this time. The President stated the Congress should pay for the spending that they Authorized and voted for so there should not be any reason to have a battle over it. Senate minority leader Mitch McConnel stated today that any increase in the debt ceiling would have to be matched dollar for dollar by spending cuts in order for Republicans to back the increase.
Just today, Senators John McCain (R) – Arizona and Lindsay Graham (R) – South Carolina have stated that they plan for a big fight and not allow a debt ceiling increase without large spending cuts to entitlement programs. However, most reputable economists agree that spending cuts in the order of 40% + all of a sudden would cause a decrease to GDP far greater than the decrease in the GDP during the recession of 2008. Senator Graham stated that he wants decreases in entitlement programs by increasing the eligibility age of Social Security from 65 to 68. If this age limit is increased much more, it may end up equaling the average life expectancy.
So the real question becomes, does the Government really want it’s citizens to have a retirement or downsize Social Security dramatically by basically raising the eligibility age so high that people won’t have a retirement?