The deficit deal avoided a disaster at least for now, but at least some have expressed a concern that it simply puts off major decisions until a later date, like after next year’s elections. For now, the deal lets the US increase its debt limit by at least $2 trillion. This covers spending until 2013, so recipients of government benefits like Social Security disability benefits can breathe a little easier for at least a year or two.
The other part that comes along with the deal, though, involves massive spending cuts. The first phase involves trimming $1 trillion over the next 10 years, and phase two involves another $1.5 trillion in reductions. That is a lot of money to remove from our government’s spending given that, in 2010, its spending was slightly over $3.5 trillion. The cuts have to come from somewhere, so where would Congressional representatives start?
The deal involves protections for programs like Medicare, Medicaid and Social Security. These programs are thus exempt from cuts in theory, but it is hard to conclude that they are worry-free at this point. Social Security pays out as many as 70 million checks each month, yet has complained of becoming insolvent for several years now. President Obama seeks to extend a 2 point cut in Social Security taxes for certain households, but that is yet another source of revenue for Social Security that will not exist. How is Social Security supposed to become solvent in the face of severe cuts and dwindling tax revenues?
Troutman & Troutman, P.C. – Tulsa Social Security disability attorneys