MAMARONECK, N.Y. -- President Barack Obama signed the Budget Control Act of 2011 Wednesday to avert the debt ceiling crisis, but local residents and officials say it won't fix the problem.
"It's a start," said Evan Jeske, a Mamaroneck resident. "You can't spend huge amounts of excess money without revenue. We have to be fiscally responsible."
Like Jeske, Town of Mamaroneck Supervisor Valerie O'Keeffe never thought the president and Congress would allow the federal government to default, but even if the Aug. 2 deadline to raise the debt ceiling passed with no compromise, the effect would have been limited in Mamaroneck.
"I'm glad we didn't default," O'Keeffe said. "If the government had defaulted then the interest rates the
Town would have had to pay to borrow money would have gone up. That would have had an effect."
The Budget Control Act of 2011 calls for reduced spending greater than the increase in the debt limit. The government increased the debt ceiling by $900 billion in the first phase but will cut $917 billion in the next 10 years.
The act creates a joint committee of Congress made up of six Democrats and six Republicans. The committee would craft debt reduction legislation by Nov. 23 with the goal of reducing the debt by $1.5 trillion in the next 10 years. The legislation would be passed by Dec. 23 and would not be affected by any amendment or filibuster.
If Congress cannot create a debt reduction bill that cuts at least $1.2 trillion, then it can raise the debt ceiling by $1.2 trillion. That course of action, though, would trigger cuts in spending in numerous areas of government, but those do not include Social Security, Medicaid, civil and military employee pay and veterans. Medicare, however, would be affected.
The law also increases Pell grant funding but reduces other financial aid.
The Village of Mamaroneck has pursued funds for a flood mitigation programs for over 30 years, but have largely been ignored, said Mayor Norman Rosenblum. Had the Tuesday deadline to raise the debt ceiling passed with no plan, he saw no direct impact on the local community, other than having even less money available to fund local projects.
"I didn't think it would get to that," Jeske said. "Too much is at stake for everybody."
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