AFP Statement on Sunday, July 31 Debt Limit Deal - READ HERE
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Statement from AFP GA Communications Director Joel Aaron

House and Senate Leadership and the Administration must get serious about the Balanced Budget Amendment and the spending, quickly. The new legislation comes nowhere close to the $4 trillion dollars in cuts that the credit rating agencies have said is a "good start" for solving our nation's fiscal fallout. The President and Congressional leadership should not play chicken with freshman in Congress. I have a hunch they are not bluffing, they have already reckoned the worst case scenario. Remember, not raising the debt ceiling does not automatically equal default, media rhetoric to the contrary. Bondholders must be paid first, (according to the Constitution) then the President is put in a political position where he must either decide to cut government spending by 5% at agencies across the board (not a big deal for honest brokers) in order to fulfill Social Security, Medicare and Medicaid obligations or risk political misfortune. Several of the credit agencies have already downgraded our debt to AA and the President and Treasury have the power to prioritize debts relative to cuts in services.

The media has been singing in unison all day, what we in the biz call a boiler plate. The boiler plate for August 1, 2011, is pretty obvious. The new bill represents the new political reality, namely, the Tea Party runs Washington. The President loses, the Tea Party wins. Unfortunately for the media and Washington calculators, AFP activists may be flattered but we don't have as much hubris as the they may like to think we have. The fatal conceit may simply be that they think we are as fatally conceited as they are and they may learn by day's end that projection doesn't pay.

From a political perspective, if it all falls back in the lap of the Administration on August 3 and they refuse to pay mandatory debt at the expense of discretionary spending, it drains the political leverage out of Washington. A constituency it is unwilling to placate is a constituency it is willing to lose and the President dare not risk losing the nation's largest voting block over ill-conceived political maneuvers that sacrifice seniors and military benefits. If the House holds fast today, there will be precious little time for the Senate to do anything other than pick up the debate over the Cut/Cap/Balance Act as a prerequisite to raising the debt ceiling. If Congress fails to raise the ceiling before August 2nd, the above scenario will likely go into effect. Either approach will affect the nation's economy at every level. But Cut/Cap/Balance stands to force long-term reform and legitimate cuts in government and sets the nation up for a legitimate long-term shift toward free market solutions where the real job creation wealth still exists. Call Congress today, tell them to hold the line, VOTE NO on the new debt limit deal and encourage them to pick up Cut/Cap/Balance.
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