Bill O'Reilly: What the Debt Deal Means to You
By: StaffAugust 2, 2011
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By Bill O'Reilly

First of all, the House just voted 269 to 161 to approve the deal, and here's basically what it is.

The United States government will define at least $2.1 trillion in spending cuts by Thanksgiving. The feds will also raise the debt ceiling by at least $2.1 trillion through the year 2013. That's pretty much a wash financially and, of course, not nearly enough to bring federal expenditures under control. But since the government is divided between big spending liberals and small government conservatives, the deal at least lessens the chaos for now.

The most important thing about the deal is that it challenges you, the American voter. If you want less spending in the future, you will vote for Republicans next time around. If you want to continue with the big government philosophy, you'll vote Democrat.

If the GOP wins the presidency, the Senate and holds the House, then we can expect a radical transformation in Washington. That is, massive spending cuts and hopefully a new tax code, which would raise far more revenue than the class warfare system we have right now. The truth is we need more revenue in America, and the far right should understand that.

In the future, we must protect ourselves from radical Islam and other threats, and we also must fulfill our obligations to the elderly and the ill through Social Security and health care mandates. America will not remain a great country if we don't keep our promises and protect ourselves. I hope everyone understands that.

We need a flat tax in this country that would maximize revenue and simplify the entire tax code so that people would pay a fair amount to the government and unfair loopholes would be closed. We also need a small national sales tax to tap into the $1 trillion a year in the underground economy. I mean, criminals who sell drugs don't pay taxes but they do buy an enormous amount of stuff. Also, as of 2009 about 50 percent of American households pay absolutely no federal income tax. Many of those people earn money off the books. Shouldn't they contribute something to their country? A national sales tax would raise an enormous amount of money, which could then be used to fund Medicare and other social programs, most of which need to be reformed.

Now, please forgive me for being logical and not ideological. I know some get upset when practical solutions override preconceived notions. So let's return for a moment to the world of ideology.

A New York Times editorial on Monday says: "Democrats won almost nothing they wanted except avoiding default."

That is a signal to liberals that they should be angry that the government will have to cut spending while not raising taxes. Already the far left is mobilizing to voice displeasure with the deal:


REP. EMANUEL CLEAVER, D-MO.: What I'm saying is that if you lift the bun, what you see is antithetical to everything the great religions of the world teach, which is take care of the poor, take care of the aged.


Of course, Congressman Cleaver is misleading you. America can take care of the poor and the elderly in a responsible way. Change the tax code. That can happen. But Mr. Cleaver doesn't want that. He wants to redistribute income.

And so does Paul Krugman:


PAUL KRUGMAN, NEW YORK TIMES COLUMNIST: From the perspective of a rational person, in other words a progressive, on this stuff, we shouldn't even be talking about spending cuts at all now. We have 9 percent unemployment. These spending cuts are going to worsen unemployment. That's even going to hurt the long-run fiscal picture because we have a situation where more and more people are becoming permanent long-term unemployed.


You may remember Professor Krugman supported a massive stimulus package, saying it would bring down unemployment, and it didn't happen. Instead of learning his lesson, he's demanding more stimulus spending. And this guy teaches economics at Princeton University? Unbelievable.

And how about our pal Barney Frank, who oversaw the collapse of Fannie Mae and Freddie Mac. Predictably, old Barney doesn't like the fact that income taxes are not going to be raised:


REP. BARNEY FRANK, D-MASS.: Tax cuts don't put out fires. They don't do health research in the right way when there is no profit in it. They don't do the construction of bridges and highways or provide for elderly people. You have a right-wing group that simply does not accept the notion that there is a role for government.


Congressman Frank, of course, is referring to the Tea Party. By the way, there are no tax cuts, Barney. The current tax rate is being kept the same for now.

It is important to understand the mindset of President Obama and the political left. Even though the country is in dire economic trouble, largely because of liberal policies, they simply will not acknowledge that.

As for liberal Americans themselves, actor Matt Damon articulates their point of view:


MATT DAMON, ACTOR: I really don't mind paying more taxes. I'd rather pay for taxes than cut like Reading Is Fundamental or Head Start or some of these programs that are really helping kids. I mean, why not? This is the greatest country in the world. Is it that much worse if you pay 6 percent more in taxes? Give me a break.


What Mr. Damon apparently does not understand is that many federal programs simply do not work and that if he wants, he can pay as much to the government as he would like. In fact, I would like to see Mr. Damon and other wealthy liberal Americans set up foundations to supplement federal programs they admire. I have my own foundation, so I will help Matt if he wants to put his money where his mouth is. Also, Mr. Damon does not seem to understand that the economy needs more consumer spending and higher tax rates inhibit that.

Finally, the far left is accusing the Tea Party and others of extortion. That view was articulated on CNN:


FAREED ZAKARIA, CNN: Instead of accepting some compromise that can get through the democratic process, what they're saying is we'll blow up the country if you don't listen to us. We'll hold hostage the credit of the United States, the good standing of the United States, and we'll blow it up.


The bottom line is massive pressure had to be put on the Obama administration and the Democrats in order to get anything done on spending cuts. You can call it extortion. You can call it whatever you want. But the truth is we need far more discipline in federal spending and total reform of the tax code.

And that's "The Memo."

— You can catch Bill O'Reilly's "Talking Points Memo" weeknights at 8 and 11 p.m. ET on the Fox News Channel and any time on Send your comments to:

Transcript Date: 
Mon, 08/01/2011
Transcript Show Name: 
O'Reilly Factor