John Spratt: “as we speak, there is a bill in the wings called the Deficit Reduction Act of 2005, its fate yet to be determined…”

“as we speak, there is a bill in the wings called the Deficit Reduction Act of 2005, its fate yet to be determined because it is not at all clear that there are enough votes in this body to pass it. Basically, this bill is part of the budget resolution for 2006, and what it anticipates is a three-step process except that those steps are treated very separately and in isolation. The first step is what the bill I am talking about proposes, that is, reductions in mandatory spending, so-called ``entitlement spending,'' of about $54 billion. The second step to follow is a reduction in taxes in the amount of $106 billion. That is what the budget resolution calls for. As a consequence, this bill does not achieve its stated name, which is the Deficit Reduction Act of 2005. Instead, by cutting taxes by more than they cut spending, it leads to a deficit that is $52 billion bigger than would otherwise be the case. That is the second step. And then there is a third step in this bill that is not much talked about, but it is written into the bill, written into the budget resolution for 2006, and that is an increase in the debt ceiling of the United States by $781 billion. That is what happens when you have tax cuts that are not adequately matched by spending cuts.…”