Hitting The Ceiling:Budget Control Act of 2011

HITTING THE CEILING: How Will the Budget Control Act of 2011 Affect the Nation? The debt ceiling became a major point of conflict in 2011 between Republicans, who control the House, and President Obama and the Democrats who remain in control of the Senate. This impasse was resolved in the short-term when Congress passed the Budget Control Act of 2011. Here, we examine the ramifications of the new measure. HOW THE NEW BILL WILL WORK On August 2nd, the Budget Control Act of 2011 was The new legislation is structured to give the president signed into law, raising the national debt ceiling to $14.69 trillion. enough budget room to get through 2012 smoothly, and readdress the debt ceiling issue in 2013. The bill will be rolled out as follows: August $400 $400 billion was made immediately available for the Treasury Department BILLION to pay several critical expenses, including: Payments to Social Security recipients Payments to soldiers Treasury notes Payments to defense Payments to Medicare and Medicaid recipients Payments to food stamps recipients contractors September $500 BILLION An additional $500 billion in debt ceiling room will be available to the President as needed. Congress can vote to withhold it by mid-September, but the President reserves the right to veto the decision. November A new 12-member committee known as the Joint Select Committee on Deficit Reduction will propose a strategy to make up the $1.2 trillion to $1.5 $1.2-$1.5 TRILLION trillion deficit. Their plan will likely involve a combination of government spending cuts, as well as identify new revenue sources. December Congress must vote on the committee's plan by late December. There can be no filibusters or amendments, and the vote must occur immediately. $1.2 TRILLION One of two things can occur at this time. The Committee does not come up with a recommendation or they come up Congress passes the Committee's plan. with a recommendation and it does not pass Congress. Obama can raise the debt ceiling. Across-the-board cuts will be automatically triggered. These cuts are proportioned as follows: 50% 50% to come from the military and defense budget to come from non-military discretionary spending This clause was set in place to discourage both parties from using it. Cuts to the military budget are disadvantageous to conservative politicians. Cuts to entitlement programs are disadvantageous to liberal politicians. Supercommittee's Deficit Reduction Strategy N If the amendment does not pass: VOTE If the amendment passes: $1.5 $1.2 TRILLION TRILLION By the end of December, Congress Obama can raise the debt Obama can raise the debt will vote to send the balanced budget ceiling another $1.5 trillion. ceiling another $1.2 trillion. amendment to the states. Meet The Committee Committee Members Committee Members from the Senate from the House John Kyl Rob Portman Pat Toomey Dave Camp Fred Upton Jeb Hensarling AZ ОН PA MI MI TX James Clyburn SC John Kerry Max Baucus Patty Murray Xavier Becerra Chris Van Hollen MA MT WA CA MD The panel will need a seven-member majority to make a recommendation. Head of the Committee Patty Murray Patty Murray was elected for four terms in the Senate thus far, and is also the chairwoman of the Democratic Senatorial Campaign Committee. RAMIFICATIONS OF AN INCREASED DEBT CEILING While they have not yet agreed upon a strategy, cutting enough spending to make up over $1 trillion in total debt ceiling room could have implications for any and all Raising the ceiling and taking on more debt necessitates a plan to pay this new amount back. This task that has been assigned to the Joint Select Committee on Deficit Reduction. government programs. Possible national effects of the Committee's spending cuts: Agriculture Education Energy There may be cuts to nutrition Cuts to higher education Energy tax incentives for the oil programs, which comprise more than 70 percent of the USDA's budget. loan repayment incentives take effect in July 2012. and gas industry could be cut. This includes possible cuts to the K-12 education budgets may Possible cuts to renewable Supplemental Nutrition Assistance Program and the Women, Infants, and Children Program. energy tax incentives could also be proposed. also be effected in 2012. I) Healthcare Defense Discretionary spending caps could adversely Caps may be placed on appropriations for affect funding to various health organizations such as the Food and Drug Administration, military construction, foreign operations, the intelligence community, and the budgets of the Departments of Defense, State, Homeland Security, and Veterans Affairs. National Institutes of Health, Centers for Disease Control and Prevention, and more. Medicare and Medicaid cuts may happen. SOURCES: WHITEHOUSE.GOV I TOPICS.NYTIMES.COM I WASHINGTONTIMES.COM G+ I TREASURYDIRECT.GOV I FPC.STATE.GOV