Giffords Returns -- Votes To Raise Debt Ceiling

There was a joyous moment on the floor of the House of Representatives yesterday. As the House was voting on the agreement to raise the debt ceiling, Rep. Gabrielle "Gabby" Giffords (D-Arizona) walked in to cast her vote on the matter. It was the first time she had been back to the House floor since being shot in the head last January, and she received a standing ovation from members of both parties. Giffords, a moderately-conservative Democrat, cast her vote in favor of the debt ceiling agreement.

The agreement to raise the debt ceiling with drastic budget cuts attached passed the House rather easily. The bill was approved on a 269 to 161 vote. The bill passed with a huge majority of Republicans voting for it, which makes sense  because they are the real winners of the so-called "compromise" agreement. A total of 174 Republicans voted for the bill while only 66 Republicans voted against it. On the Democratic side of the aisle the vote was split, with 95 Democrats voting for the bill and 95 Democrats voting against the bill.

Now the bill must pass the Senate. Majority Leader Reid has scheduled a vote on it for today, and he probably has enough votes to get it passed (although he will need some fairly significant Republican support to get it done). Most congressional observers expect the bill to pass fairly easily.

I still think this is a bad bill that will do substantial damage to the American economy. It will hurt job creation efforts and will extend the recession being felt by all but the richest Americans -- and it doesn't ask the rich or the corporations to share in the sacrifices that the bill will impose on working, poor, and elderly Americans. And I'm not alone in that belief. Here is what some others are saying about this agreement:

David Van Os, respected Texas progressive, says:
What I have to say about it is that Obamocratic politics is destroying what was left of checks and balances in American politics, thus leaving all non-wealthy Americans more and more undefended against the class war perpetrated by the corporate robber barons and the gangster banksters. This president bears no resemblance to progressivism, populism, leadership, backbone, or to express Democratic Party values. I do not follow him, do not trust him, will not trust him, and will not follow him. To those who will inevitably say, “But oh my gosh, he is the only alternative to the right-wing conservative Republicans,” I say: “Give me an opponent who tells me straight up that he opposes me and doesn’t pretend otherwise. A Trojan horse pretending to my friend is the greatest danger of all because he co-opts my defenses and opens the city gates against me from the inside.” Grass roots Americans who supported this Trojan horse in the election of 2008 need to wake up to the truth about the political fraud that sucked them in.

Mohammed El-Erian, CEO of bond investment firm Pimco, says:
The potential budget agreement “does nothing to restore household and corporate confidence. So unemployment will be higher than it would have been otherwise, growth will be lower than it would be otherwise, and inequality will be worse than it would be otherwise.” [...] “We have a very weak economy, so withdrawing more spending at this stage will make it even weaker."

Paul Krugman, Nobel Prize-winning economist, says:

The deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status.

Start with the economics. We currently have a deeply depressed economy. We will almost certainly continue to have a depressed economy all through next year. And we will probably have a depressed economy through 2013 as well, if not beyond.

The worst thing you can do in these circumstances is slash government spending, since that will depress the economy even further. Pay no attention to those who invoke the confidence fairy, claiming that tough action on the budget will reassure businesses and consumers, leading them to spend more. It doesn’t work that way, a fact confirmed by many studies of the historical record.

Indeed, slashing spending while the economy is depressed won’t even help the budget situation much, and might well make it worse. On one side, interest rates on federal borrowing are currently very low, so spending cuts now will do little to reduce future interest costs. On the other side, making the economy weaker now will also hurt its long-run prospects, which will in turn reduce future revenue. So those demanding spending cuts now are like medieval doctors who treated the sick by bleeding them, and thereby made them even sicker.