House GOP Backs Off of Debt Limit Deal

Moneybox
A blog about business and economics.
May 10 2012 5:09 PM

House GOP Backs Off of Debt Limit Deal

In exchange for raising the debt ceiling, congressional Republicans secured a commitment to cut federal spending by $1 for each $1 in new borrowing authorized. The cuts were split evenly between the defense and non-defense side of the budget, but today the House voted to back out of the deal and replace defense cuts with cuts targeted at poor people:

The 218-199 vote capped a day of often emotional debate and carries with it major implications for the November elections –and the fiscal crisis awaiting Congress at the end of this year.
Building on the House budget resolution in March, the 167-page bill continues an aggressive election-year rewrite of last summer’s agreements to shore up Pentagon spending without having to rely on new tax revenues. Non-defense appropriations already face $27 billion in cuts beyond what the budget law anticipated, and the new measure adds a second round of savings, culled from President Barack Obama’s signature initiatives as well as core benefit programs such as Medicaid, food stamps, and the child tax credit.
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It's interesting that the child tax credit is considered fair game in this context. Instead of a "no tax hikes" pledge it now seems to be "no tax hikes except on low-income working parents."

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.