Four Ways the Debt-Ceiling Deal Will Affect You Personally

Four Ways the Debt-Ceiling Deal Will Affect You Personally

(Photo: joshuaseye)

How is this deal likely to affect your household? If you're in the top 1% of earners, there's no need to read any further because it probably won't affect you personally. Here are five ways it's likely to affect the rest of us:

1. You'll be less likely to find a job if you're looking. If you've got a job, you're less likely to earn more money – and more likely to lose it.

The New York Times report of a secret agreement not to help the economy only confirms what we already knew: The President won't aggressively push a jobs program, and the Republicans don't intend to pass one in any case.

This is bad news if you or anyone close to you is currently unemployed — especially if you live an a hard-hit area, have been unemployed for a long time, are African American, or are older. It's equally bad news if you've just graduated from college. This “grand bargain” won't even extend your Federal unemployment insurance.

If you're not working enough hours or haven't seen your salary go up very much, this will hurt you too. Under-employment is also a symptom of an economy in need of stimulus, and that stimulus isn't coming. And wages are stagnating, even for fully-employed people, too. There are several reasons for that — with high unemployment, employers don't have to give raises to keep people. And a lot of employers are strapped, too, because they're not making as much money as they used to.

In other words, of you're one of the 22 to 24 million people in the country who are un- or under-employed, this deal is bad news. And if you're one of the tens of millions of people with stagnant income, it will hurt you too.

By all means, please keep looking for a job and try not to surrender to despair. But this bill is a step backward for you.I know it's going to be tough, and I feel for you. But hang in there and don't give up. Join us in pressuring Washington to address unemployment. That will give you added purpose – and we sure could use the help.

2. Your housing value is likely to suffer.

The bipartisan coalition that bailed out Wall Street has agreed to exclude any help for suffering homeowners in their “grand bargain.” That means that a wave of foreclosures will continue unabated, driving down housing value, ruining millions of households, and depressing the local economy in tens of thousands of cities, towns, and neighborhoods.

The tax provisions we'll describe in a minute are likely to make that problem even worse.

3. Your old age just got scarier.

A “chained-CPI” benefit cut will reduce Social Security by nearly ten percent by the time you're 80 — and that's if you retire right away. If you're young the cuts will be even greater. Raising the retirement age is a huge benefit cut, too.

The right-wing “bipartisan” consensus isn't willing to attack the real drivers of health care cost in this country, most of which come from our over-dependence on for-profit hospitals, insurance companies, and drug companies. That means benefit cuts are likely to be recommended by the “Super Congress” and implemented by that other body. (What should it be called from now on – the “Lesser Congress,” perhaps?)

That's likely to mean an old age with more financial insecurity – unless this deal can be stopped, or the “Super Congress” is staffed with Democrats who believe in the higher good and not a deal for expediency's sake.

Again, don't despair. Join us in fighting to protect entitlement programs – or in electing politicians who will.

4. Your tax bill is likely to go way up.

You may have heard the phrase “revenue enhancement” and wondered why they don't just say “tax increase.” Or heard the words “tax expenditure” and wondered why they didn't just say “tax deductions.” Here's why: The phrase “tax increase” is understood to mean raising tax rates, which would discommode the wealthy. But “revenue enhancement” also includes eliminating tax deductions that benefit the middle class but mean very little to the wealthy.

But it's too direct and honest to simply say “eliminate tax deductions.” They'd rather say that the Super Congress will “review tax expenditures.” Two of the biggest are the home mortgage interest deduction and the tax deduction for employer-sponsored health care.

What will happen if they're eliminated? If the mortgage deduction goes, even more homes will go into foreclosure, leading to even more severe drops in home prices. Those families who can keep their homes will face a steep increase.

If you get your health benefits through your employer, you'll pay a lot more for coverage if they eliminate or reduce the health benefit deduction . You'll also get a lot less coverage in return — as your employer shifts even more of the health bill back to you. Many small employers may drop coverage altogether — which means that more households will be required to purchase it on the individual market. That could cost a middle class family ten thousand dollars or more per year under the current health bill.

But wait. There's less

That's not all, folks.

Education will be cut under this plan, which means your children will get less of an education and will have less money for college, closing one more avenue to a better life.

And what about lower-income Americans? It's too early to know all the particulars, but it will be bad. We know you'll get much less health care, which means you and those you love are likely to be sicker. But it will get a lot worse than that. As the most vulnerable among us, you make the easiest target.

Overall, economic growth is likely to be reduced from its current crawl to a complete standstill, causing spikes in unemployment and other economic hardships.

Is this a done deal?

Pretty close, but there are still things that can be done. First and foremost, people can call today and demand that your Senators and representatives reject this deal.

If the deal does pass, demand that only people who represent you are appointed to the extra-legislative Super Congress that's been empowered with deciding your fate.

And don't forget how your elected officials behave as this deal makes its way through the process. Write it down if you need to, but be sure you remember everything when you vote next November.