Debt Deal. This legislation (S. 365) provided for an immediate $400 billion increase in the national debt limit, while allowing the President to raise the ceiling an additional $500 billion unless Congress passes a resolution of disapproval on September 14, 2011 by a vote of 232 to 186 (Roll Call 706).
This legislation also established a process for reducing future cumulative deficit projections by up to $2.4 trillion for fiscal years 2012 through 2021, including the establishment of a supercommittee tasked with recommending cuts totaling up to $1.5 trillion for the 10-year period. If the supercommittee were to fail in recommending at least $1.2 trillion in cuts (and, as we know, the supercommittee failed to recommend any cuts), then the legislation would trigger automatic cuts totaling up to $1.2 trillion over 10 years.
The debt-raising/deficit-cutting package created the appearance that Congress was doing something to rein in out-of-control spending. But in reality, the total national debt would still increase even if the entire dollar amount of cuts called for in the legislation were identified and enacted, since the cuts are not cuts in the absolute sense but cuts in future budget projections. The national debt would continue to go up, but not as fast as before, for the simple reason that cutting (say) $1.2 trillion over 10 years will not offset projected annual $1 trillion-plus deficits.
The Senate agreed to the House-passed version of the bill on August 2, 2011 by a vote of 74 to 26 (Roll Call 123). We have assigned pluses to the nays because the debt deal allows both the national debt and spending to continue their upward trajectories.
