COLUMBUS GROVE, OH – AUGUST 25: Republican vice presidential candidate U.S. Rep. Paul Ryan (R-WI) speaks to supporters on August 25, 2012 in Columbus Grove, Ohio. Ryan and presumptive Republican presidential nominee, former Massachusetts Governor Mitt Romney, are campaigning together leading up to the Republican National Convention beginning August 27 in Tampa, Florida. (Image credit: Getty Images via @daylife)
The Debt Ceiling Deal
On Sunday September 9th 2012, presidential nominee Mitt Romney denounced the debt ceiling deal that helped to avert an overwhelming government debt default in the US. This despite the fact that one of the deals supporters is his current running mate Paul Ryan.
Mitt Romney called the deal between the White House and the congressional Republicans “a mistake”. He went on to say that the deal would cut our defense budget badly.
Lawmakers agreed to the deal at the 11 hour back in August 2011. The agreement was for $1 trillion in spending cuts over the next 10 years. This followed by the promise to impose another 1.2 trillion to deficits. Paul Ryan backed last year’s deal while head of the House of Representatives Budget Committee.
Romney stated that he thought the deal was a mistake on the part of the White House, and a mistake on the part of the Republicans to go along with it.
Paul Ryan said on CBS recently that he supported the deal because they needed to find common ground with President Obama and the Democrats. But that Republicans had proposed ways of cutting back wasteful Washington spending.
Mitt Romney told NBC that the White House’s sequestration plan of $1.2 trillion would severely cut our defense budget. Unless automatic spending cuts are implemented by year’s end, beginning Jan 2nd $1.2 trillion over ten years would come out of our defense budgets, not affecting 2011 taxes.
Many people are confused about the recent debt deal and how it will affect them. The details of the deal raise a lot of questions and offer few answers. Federal spending will face huge cuts over the next 10 years and about one third of all cuts will come from defense and security.
One of the bills main feature is the establishment of a committee whose aim is to find a further $1.5 trillion in cuts. There are no guidelines as to where these funding cuts will be made and some commentators expect to see significant reductions in Social Security and increased taxation. However if this committee fails to come up with a comprehensive spending reduction plan then a series of automatic cuts will come into being. These cuts will hit Medicare, Medicaid, and military spending the heaviest.
There are a few things that savers and investors can do in order to protect themselves in these uncertain times. Investors should investigate how dependent the companies they hold shares in are on government contracts. These contracts will surely dry up in the coming years.
Anyone close to retirement should hold off on stopping work in order to defer their Social Security retirement plan. This will add 8% to your benefits, which is a lot more than you’ll get by putting that money in the bank.
If you are not already doing so you should do your own tax. You’ll save money by doing 2011 taxes yourself instead of hiring a professional. Once you have done your own tax for one year, you will be able to continue to make this saving for many years to come.