US credit rating: Congress has many debt plans, but will it heed warning?
US credit rating is still AAA, but Standard & Poor’s added a cautionary note because of the nation’s ‘rising government indebtedness.’ Here's a look at some of the budget plans in Congress.
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• GOP conservatives proposed even deeper cuts in entitlement programs: They’d increase the retirement age for Social Security to 70 and raise the eligibility age for Medicare to 67. It failed 119 to 120, with no Democratic votes. (In a last-minute maneuver, all but 16 Democrats voted “present” – a move that could have allowed the measure to defeat the more moderate Ryan proposal.)Skip to next paragraph
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• The Congressional Black Caucus aimed to cut deficits by nearly $3.96 trillion over 10 years, mainly by increasing revenue – ending, specifically, the Bush-era tax cuts on the wealthy. It failed 103 to 303. Seventy-five Democrats voted with all Republicans in opposition.
• The Congressional Progressive Caucus outlined the reduction of deficits by $5.7 trillion over the next 10 years, mostly by increasing taxes by some $4 trillion and cutting defense spending by $2.3 trillion. The measure failed 77 to 347, with 108 Democrats joining all Republicans in opposition.
Fiscal watchdog groups welcomed the new interest on Capitol Hill in presenting detailed plans for dealing with the debt crisis. For years, Congress has been criticized for failing to produce plans with an aim to cut deficits and spending. But the need now, the observers say, is to hammer out a political settlement.
“It’s gratifying to see lots of plans. Now it’s necessary to put out plans that are actually viable – that lend themselves to political compromise, not just to where [sponsors] sit in the world of politics,” says Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
“We’ve had some really good advice from outsiders; we now need decisionmakers to start putting together a deal,” she adds.
Last week, Mr. Obama called for new House-Senate negotiations on deficit reduction, chaired by Vice President Joe Biden. Democratic leaders have announced their appointments to these talks, while Republicans so far have not.
"[The S&P] announcement is yet another reminder that financial markets are closely watching efforts by the President and Congress to reduce the deficit in order to promote economic recovery and create jobs,” said House Democratic leader Nancy Pelosi in a statement.