Obama’s $2.1 Trillion Spending Cuts: Lessons Learned from the 2011 Debt Ceiling Crisis

RediksiaTuesday, 30 May 2023 | 18:44 GMT+0000
Obama's $2.1 Trillion Spending Cuts Lessons Learned from the 2011 Debt Ceiling Crisis
Obama's $2.1 Trillion Spending Cuts Lessons Learned from the 2011 Debt Ceiling Crisis. Photo: Doc. CNN.com

DIKSIA.COM - As the nation teetered on the brink of defaulting on its obligations, a familiar scenario unfolded in 2011.

The , driven by conservative factions within his party, demanded substantial .

Meanwhile, the Democratic president, Barack , engaged in negotiations to prevent a fiscal catastrophe.

No, we haven't jumped to 2023 just yet. This was the reality in 2011 when , together with then-House Speaker , agreed upon a .

The agreement entailed over $900 billion in immediate and measures, alongside the establishment of a tasked with identifying an additional $1.2 trillion in necessary belt-tightening measures.

Remarkably, the situation , Obama's former , faces today bears a striking resemblance.

He and House Speaker Kevin McCarthy, a Republican, are tirelessly urging their respective parties to promptly approve their agreement to address the pressing debt limit issue before the United States risks defaulting on June 5.

Present-day would be wise to study the outcomes of their ' hard-fought deal.

It became evident that things did not unfold according to plan, as a significant portion of the proposed was eventually scaled back through a series of subsequent bipartisan bills.

“After delved into the intricacies of the programs and the required cuts, they came to the realization that such deep were unattainable,” explained Brian Riedl, a senior fellow at the right-leaning Manhattan Institute who played a key role in the 2011 negotiations.

What Transpired Following the 2011 Deal

The joint committee formed in 2011 faced the daunting task of identifying additional measures to offset the approved $1.2 trillion increase in the debt ceiling.

Failure to meet this objective would trigger automatic spending cuts, known as sequestration, that would gradually rein in projected expenditure growth over the next decade.