Disastrous Budget Deal Coming In June? Cenk Uygur the Young Turks June 15, 2011 video and transcript

In an article this morning, Eric Cantor was very praiseworthy of Joe Biden. That is a red flag waving. If Democrats were to come out and say that they would give everything that Eric Cantor wants except minus one thing, except that they would not give him a stick of bubble gum that he wanted as well, Eric Canter would say these Democrats are the worse, they have done nothing to create jobs, they have done nothing to reduce spending cuts, etc. Eric Cantor is very pleased with how the talks with Joe Biden are going? Massive trouble.

Then Joe Biden came out and said that they will have a deal on the budget cuts by the end of June? The end of June is not that far off. That means that they are pretty close to a deal. Now a deal is a good thing if, overall, it’s a good deal. The Republicans are ready to accept this and the Democrats are going in their direction.

The Republicans were asking for $2 trillion in spending cuts without any tax increases. So if they are pretty close to a deal without discussing any tax increase, that’s bad news: that means it’s all spending.

But in a new article today, the Republicans would like $2.4 trillion in spending cuts. How many times have we seen this movie. Do you think that they are going to stop at $2.4 trillion? Remember the original idea was $2 trillion and the Democrats said we should do a clean raising of the debt ceiling not tied to spending cuts: that’s a different issue. So the Democrats were originally at zero spending cuts in relation to raising the debt ceiling, which is what we are talking about here. And the Republicans were at $2 trillion.

The Democrats moved to $1 trillion: Joe Biden announced that a couple of weeks ago. And I told you then that they would move to $2 trillion. Now $1 trillion should have been the middle and the end of the negotiations. But that’s not how Washington works. Do you think that they are just going to go to $1.5 trillion? Go halfway and then go halfway again? Then you don’t know the Democrats. They are definitely going to $2 trillion. And that isn’t the end either though. Once they go to $2 trillion, the Republicans will move the goal posts. In fact, the goal posts just got moved this morning to $2.4 trillion.

Do you think that’s the last time the Republicans are going to move it? They can go all the way to $4 trillion. Because the more they move the goal posts, the more Biden and the White House say, okay, let’s go further to the right.

So Biden saying today that they are beginning to tackle the really hard stuff and that they are making real progress, meaning giving in on more spending cuts. Now how do we know that? Because the Republicans come out of the meeting and say, not only have we not touched taxes but we will never touch taxes. Now the rich will get to keep all of their tax cuts.

If they do that deal and there are really no tax increases whatsoever, nothing on the revenue side, and they do $2 trillion or how many trillion in spending cuts—we already know that the Democrats are hopeless and the Obama White House in negotiations in the past has been hopeless—that is beyond hopeless. But I am worried that they are going in that direction.

But today, also a sign of so-called strength, Senate Democrats came out and said, hey, we’re drawing a line in the sand. They keep drawing lines in the sand; we’re drawing one. Mitch McConnell said earlier that Medicare cuts must be involved in this package. Well, Schumer, Reed, and Patty Murray came out and said, there will be no Medicare cuts in this package. That’s our line in the sand. And then you read into the details; the devil’s in the details. So let me tell you what they are.

Schumer said, “No matter what we do in these budget talks, we must preserve the program in its current form and we will not allow cuts to seniors’ benefits.” Now that’s a small red flag. Because he said we would not allow cuts to benefits; we must preserve the program as it is. Now that’s a code word for, we will not accept Ryan’s plan to change the total way that Medicare has performed but we might accept other changes to it.

A second article written by Brian Beutler explains that Democrat leaders drew a clear line, and here’s the distinction: Medicare cuts can be on the table but not medicare benefit cuts. The second red flag.

Then third, a separate article said, Democrats said that any changes to Medicare would be in the form of delivery reform to avoid cutting benefits for seniors.

Now look, that could be okay. We have to see what the proposal is. But I don’t know what they mean by delivery reform. Is that a code word for we are going to cut the benefits but we are not going to call it cutting the benefits? You know the Democrats: entirely possible.

So a word of caution about the Democrats drawing a line. They are Democrats; they don’t mean it. And afterwards they tell you they don’t mean it.

So watch out for what Biden has got cooking there. The Republicans are excited about it: that is a very bad sign.

One more thing. There is a lot of false drama in Washington. The same thing with health care. Will it pass? Will it not pass? Will financial reform pass or not pass. And I said all along that they were all going to pass. The question was never that they were not going to pass. The question was what’s in it. Is it tough, is it not tough. I told you that from day one.

And I’m telling you with this raising the debt ceiling. Are you kidding me? Wall Street and the Chamber of Commerce have already ruled on this. They said that they will definitely raise the debt ceiling, no matter what. The Republicans are a wholly owned subsidiary of Wall Street. They’re going to raise the debt ceiling. That’s why the debt ceiling actually isn’t a real problem until August. They said that they are going to settle this by the end of June. Why? Because the Republicans are bluffing. They are definitely going to raise the debt ceiling. Their bosses told them to do it.

Are the Democrats going to raise it? Absolutely. False drama. Why? Because the Democrats and Republicans have to play this game where at the end they take all of the money from the middle class and say that there was nothing that they could do about it. We just had to do the cuts to the middle class and the poor, but golly gee willikers, we still haven’t gotten to the tax situation for the rich. Another day.

You watch, you see. That is exactly what’s going to happen.

Transcribed by the Barefoot Accountant of Accountants CPA Hartford, Connecticut, LLC

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About William Brighenti

William Brighenti is a Certified Public Accountant, Certified QuickBooks ProAdvisor, and Certified Business Valuation Analyst. Bill began his career in public accounting in 1979. Since then he has worked at various public accounting firms throughout Connecticut. Bill received a Master of Science in Professional Accounting degree from the University of Hartford, after attending the University of Connecticut and Central Connecticut State University for his Bachelor of Arts and Master of Arts degrees. He subsequently attended Purdue University for doctoral studies in Accounting and Quantitative Methods in Business. Bill has instructed graduate and undergraduate courses in Accounting, Auditing, and other subjects at the University of Hartford, Central Connecticut State University, Hartford State Technical College, and Purdue University. He also taught GMAT and CPA Exam Review Classes at the Stanley H. Kaplan Educational Center and at Person-Wolinsky, and is certified to teach trade-related subjects at Connecticut Vocational Technical Schools. His articles on tax and accounting have been published in several professional journals throughout the country as well as on several accounting websites. William was born and raised in New Britain, Connecticut, and served on the City's Board of Finance and Taxation as well as its City Plan Commission. In addition to the blog, Accounting and Taxes Simplified, Bill writes a blog, "The Barefoot Accountant", for the Accounting Web, a Sift Media publication.
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