Last week, we reached an agreement that will make historic cuts to defense and domestic spending. But there’s not much further we can cut in either of those categories. What we need to do now is combine those spending cuts with two additional steps: tax reform that will ask those who can afford it to pay their fair share and modest adjustments to health care programs like Medicare (my emphasis).
Couple that with this warning from Panetta:
Automatic spending cuts built into the debt-ceiling agreement are a "doomsday mechanism" that would damage national security if they kick in, Secretary of Defense Leon Panetta said Thursday.Are we to believe that the prospect of an additional $600 billion in scheduled reductions in defense spending from the current baseline will serve as more of a deterrent to the GOP than to the Obama administration? Yesterday's GOP, perhaps, but today's?
The Defense Department is in line for budget cuts that will total about $350 billion over 10 years under terms of the deal signed into law Tuesday. But if lawmakers fail to agree on further savings, the agreement calls for an additional $1.2 trillion in automatic cuts, half from the Pentagon budget.
"It is an outcome that would be completely unacceptable to me as secretary of defense, to the president and I believe to our nation's leaders," Mr. Panetta said. "Most importantly, it would be unacceptable to the American people."
Look at Eric Cantor's memo to House Republicans, sent today. The word "defense" does not appear at all. Instead, there's this:
Over the next several months, there will be tremendous pressure on Congress to prove that S&P’s analysis of the inability of the political parties to bridge our differences is wrong. In short, there will be pressure to compromise on tax increases. We will be told that there is no other way forward. I respectfully disagree.
As we have said from the beginning of the year, the new Republican Majority was elected to change the way Washington does business. We were not elected to raise taxes or take more money out of the pockets of hard working families and business people. People understand Washington can’t keep spending money that it doesn’t have. They want to see less government – not more taxes...
With the Budget Control Act, we made a $917 billion down payment on deficit reduction without raising taxes. The Joint Committee created by the legislation presents another opportunity for an additional $1.2 to $1.5 trillion in savings by the end of the calendar year. Based on the savings identified in our Budget Resolution and in the Biden Group, I firmly believe we can find bipartisan agreement on savings from mandatory programs that can be agreed to without tax increases. I believe this is what we must demand from the Joint Committee as it begins its work.