There are still days before the nation defaults on its obligations. The Republican House speaker, pushed by conservatives in his party, is demanding deep spending cuts. A Democratic president negotiates a package to avert fiscal disaster.
No, it’s not 2023.
This was in 2011, when then-President Barack Obama agreed Debt ceiling agreement With then-House Speaker John Boehner, he was to form a joint congressional committee that would find more than $900 billion in spending cuts and deficit reduction, as well as at least $1.2 trillion in additional belt tightening.
The situation is similar President Joe Biden, who served as Obama’s vice president, faces today. He and House Speaker Kevin McCarthy, a Republican Pushing their parties Recognize quickly Their contract US front to address current debt ceiling drama Start missing payments On June 5.
Today’s House Republicans may want to look back on their predecessors’ hard-dealing decisions. Things didn’t go as planned, and part of the cuts were eventually rolled back through bipartisan bills.
said Brian Riedel, a senior fellow at the right-wing Manhattan Institute who was involved in the 2011 negotiations.
In 2011 the Joint Committee was tasked with identifying additional deficit reduction measures to offset a $1.2 trillion increase in the debt ceiling. If members fail in their work, automatic cuts will reduce expected growth in spending over the next decade.
The committee fell short of its target, prompting spending caps Sorting.
However, Congress undercut the deficit-reduction provisions by repeatedly raising the limits on discretionary spending in subsequent years — though lawmakers included other measures to offset some of those changes.
“We’re basically chipping away at this bill bit by bit,” said John Diamond, director of the Center for Public Finance at Rice University’s Baker Institute.
In the end, about $1.5 trillion of the total $2.1 trillion agreed to in the 2011 deal was cut, Riedl said. That includes $855 billion in cuts to discretionary spending over the decade. The cuts affected agencies and programs including defense, education, justice and the Internal Revenue Service. A 2% cut in payments to Medicare providers was struck as part of a reduction in mandatory spending programs.
Fast forward to 2023. One of the key points to ending the debt ceiling impasse is the depth of spending cuts. The Biden administration has blocked spending cuts through the 2022 fiscal year, including Republicans. Their debt ceiling bill Earlier this year, McCarthy’s team was determined.
In the end, Agreement It announced over the weekend calls for scaling back non-defense discretionary spending in fiscal year 2024, but some agreed-upon appropriations reforms could make almost all the difference. Non-defense spending will rise by only 1% in fiscal year 2025.
02:48 – Source: CNN
Each party in the debt ceiling agreement gave up and received
One important difference between 2011 and today is that Expenditure Limitations Plan Bsaid Warren Payne, senior counsel at law firm Mayor Brown, who was a senior Republican staffer on the House Ways and Means Committee in 2011.
“People operate under the assumption that spending caps will never actually happen,” Payne said.
Now, the GOP’s top priorities include spending limits — and unlike in 2011, McCarthy won without limiting defense funding and raising taxes, he said.
But even if Congress passes this debt ceiling package, House Republicans will find it difficult to keep the caps in place when it comes time to actually adequately fund the federal government’s operations later this year.
“At the end of the day, it’s reasonable to expect to end up with the same pressures to increase spending,” Diamond said.