AMY GOODMAN: President Obama has officially signed legislation to increase the U.S. debt ceiling in time to avoid a national default. The $2.1 trillion deficit-reduction plan cleared its final hurdle in the Senate yesterday, passing with a 74-to-26 vote. Six Democrats and 19 Republicans opposed the measure. The bill’s signing came roughly 10 hours before the deadline for Washington to raise its borrowing limit.

The deal includes no new tax revenue from wealthy Americans and no additional stimulus for the lagging economy. It includes a provision to create a joint committee of 12 legislators charged with finding $1.5 trillion in deficit cuts. The committee must hold its first meeting in 45 days and is expected to set in motion a lobbying frenzy.

President Barack Obama welcomed the deal as “an important first step” and urged both parties to work together on a larger plan to cut the deficit.

PRESIDENT BARACK OBAMA: Both parties share power in Washington, and both parties need to take responsibility for improving this economy. It’s not a Democratic responsibility or a Republican responsibility; it is our collective responsibility as Americans. This is, however, just the first step. This compromise requires that both parties work together on a larger plan to cut the deficit, which is important for the long-term health of our economy. And since you can’t close the deficit with just spending cuts, we’ll need a balanced approach, where everything is on the table.

AMY GOODMAN: Yesterday, students and union activists in New York invaded Wall Street to protest the plan. They blamed big banks for contributing to the nation’s trillion-dollar deficit and criticized President Obama for not paying attention to unemployment. Larry Hales was among those protesting.

LARRY HALES: The general sentiment here is that we think a people’s movement is needed to fight back so we can take control of the things that affect our lives, every level of government. I think that a lot of people can agree that that’s the type of movement that you need in this country, because obviously they aren’t listening. They’re listening more to Wall Street than they are the people. They know people are suffering. They know there’s massive unemployment. But they don’t care.

AMY GOODMAN: Many in Congress share the protesters’ concerns about the new debt deal. Members of the Progressive Caucus and the Congressional Black Caucus rejected the deal because of its massive cuts to domestic spending and lack of tax increases for the wealthy. Among them, Democratic Congress Member Donna Edwards of Maryland. She summed up her disappointment on Twitter, writing, “Nada from million/billionaires; corp tax loopholes aplenty; only sacrifice from the poor/middle class? Shared sacrifice, balance? Really?”

Well, for more on the debt deal, we go to Congress Member Donna Edwards, who’s joining us from the Rotunda of the Russell Senate Office Building in Washington, D.C. We’re also joined there by economist Dean Baker, co-director of the Center for Economic and Policy Research, who’s been closely following the deal.

We welcome you both to Democracy Now! Congress Member Edwards, you voted against this deal. Talk about what it means, what it will do and what it won’t do.

REP. DONNA EDWARDS: Well, I mean, there are a couple of things. Number one, you know, contrary to what’s been reported, the package that we actually voted on on Saturday, which was voted down, the so-called original Reid plan, actually segregated out war funding to really defund the wars, which would have created about a trillion dollars in savings. By the time we got to Monday, of course, the Republicans wanted to exempt the overseas contingency fund for funding the war, so that created no savings at all. There were no revenues in the package at all, so the wealthiest two percent of Americans get to hold onto their money while the middle class and the poor pay for it. And although—you know, some of the cuts that are planned for the next two-year phase kick in pretty much right away.

And, you know, when you do these kind of across-the-board cuts, you can pretty much consider that every program that affects every single community across this country is going to be affected, from school nutrition programs to education funding. It basically wiped out graduate student education funding at a time that the President says that we need to win the future, but we can’t do it without graduate students studying in all of those science and technology fields that in fact could win the future. We didn’t extend unemployment benefits, and so that’s another fight that I suspect, with these Tea Partiers governing things in Congress, we won’t be able to do either.

And so, I just think it’s a bad framework for the future, whether it was a $20 billion cut to take effect this year or it was a trillion-dollar. The framework that says that we can cut government spending almost to the bare bones and raise no revenues whatsoever is really a bad deal for the American public.

AMY GOODMAN: How did it happen in this way? I mean, you had a journalist questioning President Obama last December, when the whole issue of the tax breaks for the wealthy was voted on, and saying, “Why haven’t you attached this issue that the Tea Party Congress members are saying that they’re going to take on?” And he seemed to dismiss this. But let me go to a White House press conference in December. The Atlantic magazine’s contributing editor Marc Ambinder asked Obama about the Republicans’ leverage to enact spending cuts by refusing to raise the debt limit.

MARC AMBINDER: How do these negotiations affect negotiations or talks to Republicans about raising the debt limit? Because it would seem that they have a significant amount of leverage over the White House now, going in. Was there ever any attempt by the White House to include the raising the debt limit as part of this package?

PRESIDENT BARACK OBAMA: When you say that it would seem they’ll have a significant amount of leverage over the White House, what do you mean?

MARC AMBINDER: Just in the sense that, you know, they’ll say, essentially, “We’re not going to raise the—we’re not going to agree to it, unless the White House is able to or willing to agree to significant spending cuts across the board,” that probably go deeper and further than what you’re willing to do.

PRESIDENT BARACK OBAMA: Well—

MARC AMBINDER: What leverage—I mean, what leverage would you have [inaudible]?

PRESIDENT BARACK OBAMA: Look, here’s my expectation—and I’ll take John Boehner at his word—that nobody, Democrat or Republican, is willing to see the full faith and credit of the United States government collapse.

AMY GOODMAN: Well, that’s exactly what actually took place, until the very last minute, Congress Member Edwards. What happened?

REP. DONNA EDWARDS: Well, I think no one could have imagined, even the President, that for the first time ever—I think it’s something like well over a hundred times in our history that we’ve had a president and a congress agree to raise the debt ceiling without conditioning it on these budget matters and budget fights. And I think no one could have imagined, even with the threats from this minority in the Republican Party, that they would have held hostage the entire United States government and full faith and credit of the United States, because of these budget concerns. And so, I don’t think the President was misplaced in December in thinking, well, how would anyone do that? It’s never been done before.

But sure enough, as we’ve inched through the year, it’s become clear that it’s that minority element, the Tea Party element of the Republican Party, that’s really driving the majority in the Congress, and they were willing to go to a showdown. Now, where, you know, I’ve encouraged the White House and the President, at least publicly, is that I do think that we need to begin to play some hardball with these folks, because now they feel even more emboldened. And you can hear that from the remarks of Senator Mitch McConnell just in the last day, that they—that basically no one is going to be appointed to this joint select committee who will agree to raise revenues. And so, already, before the negotiation has even started, those revenue raisers have been taken off the table. There’s no way that this can be a fair food fight.

And I think that we need to play a little bit more hardball with these folks and really take it to the American people, because in poll after poll, I mean, we hear, we know, that the American public believes that those wealthiest two percent need to pay their fair share and that they’re not doing it. They also know that they’ve received those breaks for the last 10 years, and contrary to the Republican mantra, they are not job creators, because otherwise we would have created a lot of jobs. And so, you know, I’m one of those members of Congress, and although I—you know, clearly, I represent a progressive district, but I also think it’s the voice of the American people that’s saying, “We don’t agree that the top two percent should just skate, while the rest of us 98 percent have to bear the entire burden of the government.” And not just that, but the contributing factors to our long-term debt are those tax breaks for the wealthy, a prescription drug bill from President Bush that was never paid for, and the wars in Iraq and Afghanistan, and then you add to that a financial crisis that was brought along by the irresponsibility of the financial sector. The American public, middle-class and poor people, are saying, “Wait a second. We didn’t do any of that stuff. We haven’t benefited from any of that stuff. And we shouldn’t have to pay for it.”

AMY GOODMAN: Both the Progressive Caucus and the Congressional Black Caucus were highly critical of the deal. The CBC urged President Obama to invoke the 14th Amendment, affirming the validity of the national debt as a means to bypass Congress. Speaking on the Senate floor, Vermont Senator Bernie Sanders also denounced the agreement, backing the 14th Amendment proposal.

SEN. BERNIE SANDERS: The Constitution is very clear in saying that the debts of the United States, quote-unquote, “shall not be questioned.” The president swears an oath to protect and defend the Constitution, and many constitutional scholars believe that the 14th Amendment gives the president the authority and responsibility to pay our debts regardless of the dysfunctionality of the U.S. Congress.

AMY GOODMAN: Independent Vermont Senator Bernie Sanders. Congress Member Edwards, your response?

REP. DONNA EDWARDS: Well, I joined Jim Clyburn, our Democratic leader, in calling for the invocation of the 14th Amendment several weeks ago. And the reason is because, one, I think he does have the constitutional authority, and while there may be debate about that, I’ll tell you one thing. I think it’s been said that if the President had said, “I’m going to pay Social Security checks. I’m going to pay our veterans. I’m going to pay our service members and their families. I’m going to meet our obligations,” the American public would have rallied behind that, because we know that it’s important for the United States to meet its obligations. And I would have dared any of them to challenge him by impeachment or challenge him in the courts.

And so, as I said, I believe in hardball. I’ve argued that publicly. And I think it’s time for the White House to engage in that kind of hardball, because these folks obviously don’t understand negotiation. They don’t understand compromise. They think “compromise” is a dirty word. And we have a lot of battles to fight in this Congress, not the least of which is to get this economy rolling, to get people back in jobs. And now one wonders, where will we find the money to rebuild our roads and our bridges and our wastewater systems? Where will we find the money to make the investments in research and development and manufacturing that we need for workers to get back to work in the 21st century, with these kinds of draconian cuts that are being placed on government? And keep in mind, that’s a ripple effect. It is a cut in federal government, but that ripples down to our states and our localities, virtually decimating government, which we know that for 30 years these folks have made no secret of the fact that they want to completely decimate government. And this is just the beginning of that process.

AMY GOODMAN: We’re speaking with Democratic Congress Member Donna Edwards of Maryland, a member of the Congressional Black Caucus and the Congressional Progressive Caucus. We’re going to break, and when we come back, we’re going to take on who’s going to be making the next set of decisions, what is this “Super Congress” or “super committee” of 12, how much transparency will there be. We’ll also speak with Dean Baker, economist and co-director of the Center for Economic and Policy Research. This is Democracy Now! We’ll be back with them in a minute.