The White House and the Congress have agreed on a tentative deal that would fairly increase spending over the next two years. The bill had been debated for a long time due to a long term impasse between the White House and Congress. Had the bill not been approved, it would have had serious repercussions on the government debts and dispenses. A 144-page bill, labeled ‘a discussion draft’, was posted online before midnight. It is expected to be passed and determine government funding levels over the next two years and is going to increase the country’s debt limit by 2017. The plan is expected to keep the government substantially financed till September 2016.
It was decided that $80 billion in two years would be spent (excluding military funding). This increase of $80 billion would be counterbalanced by “cuts in spending” on Medicare and special people packages i.e. doctors and other medical folks relevant to the Medicare package would have their pays slashed. The Medicare package will now be supported through the people to whom it benefits the most, people belonging to the health sector via pay cuts which would reduce government spending on the latter.
The agreement would increase spending levels to a great extent imposed by the 2011 fiscal deal for both the Pentagon and domestic programs equally for the forthcoming two fiscal years. As for the remaining fiscal year, it is expected to boost spending by $50 billion and increase spending for the year after to $30 billion.
The government was under a serious debt situation and would have been declared in default. However, this bill has resolved and helped overcome such a haphazard situation. It has not only taken the load off the government but also the major stakeholders involved. The treasury department had said that the government would default on its debt if the statuary borrowing limit was not increased by November 3rd.
President Obama has also made it very clear that he would sign the agreement that would allocate equal spending increases to both the military as well as domestic programs. He also called on the Congress to increase discretionary spending for 2016 by $35 billion on each side for a total of $74 billion more.
The unanimous agreement would lay the foundation for the government expenditure plan that Congress will have to pass by December 11th to run through next September. The deal would constitute an apparent breakthrough after several years of a standoff in Congress, predominantly on fiscal issues as each side had disputes over fundamental key issues.
Opponents argue that the Export Import Bank amounts to corporate interest. On the contrary, supporters assert that it will enable job creation by facilitating export industries and earns money for the treasury in the process. Democrats said that they had been successful in achieving their objectives, especially increasing the spending caps and by ensuring roughly equal increases towards military and nonmilitary programs.
The deal that is under serious consideration, appears to be a win-win situation for overall economic wellbeing and all the stakeholders.
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