Posted by: Schuyler R. Thorpe | July 29, 2011

Republicans Stall For Time In Order To Gain Political Capital

National Debt Deal Makers Stall for Political Capital

With an Aug. 2 deadline for raising the debt ceiling in the United States, both sides are playing hard to get in order to raise political capital. When the deal finally gets done, both sides will be able to claim a victory as the Democrats and Republicans may say they were influential in getting both sides to compromise.

President Barack Obama issued a veto threat as Republicans were ready to vote on a bill in the House of Representatives. Called the Cut, Cap and Balance Act , the measure would cut spending by $111 billion for the 2012 fiscal year, balance the budget and send an amendment to the U.S. Constitution to the states for approval.

The GOP is looking to capitalize on many state capitols where there are many Republican majorities who would vote in favor of the amendment. If it passes, a balanced budget amendment would require the U.S. government to at least break even with their annual budget.

There are several problems with a balanced budget amendment. First, what happens if there are massive emergencies and times of crises?

There would not be any emergency bailouts available such as the ones the Bush Administration passed in 2008. Second, it would also make changing the tax code even harder as the amount of revenue brought into the U.S. Treasury would have to be carefully measured.

Meanwhile, ordinary Americans are once again suffering. The stock market keeps falling and there are still high numbers of unemployed.

The more the debate rages on, the more the short-term suffering of Americans can continue.

No one wants to be the one perceived as the villain when it comes to slashing federal programs. Social Security recipients still want to keep their retirement checks. The poor still need food stamps and federally-subsidized medical care. The rich don’t want to pay any more taxes even though they caused the economic hardship in the first place by having predatory home lending practices.

In the end, everybody loses because a few rich bankers decided to play Russian roulette with the housing market. Both the GOP and the Democrats are going to take political hits because of deficit reduction compromises. In times of crisis, hard choices must be made.

It’s time for both sides to quit their griping, forget about the 2012 election and think about their constituents who are going to be suffering because of some kind of budget cuts.

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