August 2, 2011
RE: Debt Ceiling Deal Reached
As you know by now, President Obama and the Congressional leadership have reached agreement on a deal to raise the debt ceiling by up to $2.4 trillion through 2012. Last evening, the deal was passed by the House of Representatives. Just moments ago, the Senate followed suit. We are cautiously optimistic that the country will escape this crisis with our AAA credit rating intact.
However, the deal also includes up to $2.4 trillion in budget cuts between 2012 and 2021. The bill has been posted and can be viewed at: http://www.rules.house.gov/Media/file/PDF_112_1/legislativetext/S365%20ct%201206.pdf.
The White House has posted a Fact Sheet on the agreement. You can view that at:
http://www.whitehouse.gov/fact-sheet-victory-bipartisan-compromise-economy-american-people. We are reviewing the legislation, and we will soon be able to share more specifics on the timing of the cuts and which federal programs will be the targets for cuts. But, piecing together Press reports, we believe that the deal will reduce deficits in two stages. First, it enacts around $900 billion in cuts to discretionary spending. Second, it calls for up to $1.5 trillion in additional deficit reduction. Congress would have the option of filling in the programmatic details of that $1.5 trillion, based on the recommendations from a new bipartisan commission. Absent that, or the approval of a balanced budget amendment to the constitution, automatic spending cuts would take effect.
Those automatic cuts would be divided equally between security and non-security spending--with Medicaid, Social Security, and programs serving the poor protected from reductions.
Medicare benefits would be off-limits, too. However Medicare providers and producers (doctors, device makers, etc.) would see their reimbursements fall.
No doubt, we will need to be vigilant in ensuring that these cuts don’t fall disproportionately on programs essential to our communities and ultimately the residents we serve.
If you have any questions, contact Jon Moran at 609-695-3481, ext. 121 or email@example.com
Very truly yours,
William G. Dressel, Jr.