“Self-Created Crisis” Ends With Debt Ceiling Deal

Monday, 01 August 2011 | by Pat's Picks

A deal has been reached. Congress’s “self-created crisis” surrounding the debt ceiling was solved yesterday after politicians agreed on a plan to sharply cut spending while keeping taxes the same reports the Washington Post. The agreement would raise the debt limit to $2.4 trillion from it’s current ceiling of $14.3 trillion. The plan is twofold: The treasury would get access to $400 billion immediately, with another $500 billion this fall. A second increase would raise the ceiling by $1.2 trillion, but must be approved by one-third of the members of Congress.

A New York Times editorial calls the last-minute deal, which is expected to pass Congress today, “terrible.”

Times columnist Paul Krugman goes a step further, writing that apparently “raw extortion works and carries no political cost.”

The Wall Street Journal takes a more positive approach, saying the deal is the biggest victory for “the cause of smaller government” since welfare reform in the 1990s. Calling it a “Tea Party triumph,” the Journal says “no wonder liberals are howling.”

USA Today says the deal may have staved off a default by the US government, but it left political damage in its wake. The paper says during the course of his dealings, President Obama “has seen his approval rating fall to a new low, his political adeptness questioned and his liberal base enraged over compromises he made on line-in-the-sand issues such as protecting Medicare from cuts”; Speaker of the House John Boehner learned the hard way that he didn’t have as much influence as he thought he had.