Political Highlights Debt Ceiling Showdown Recap July 6-18, 2011: Bipartisan Senate Compromise Plan Emerges — Obama Sets New Deadline for Friday July 22, 2011

POLITICAL HIGHLIGHTS

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

THE HEADLINES: DEBT CEILING SHOWDOWN: OBAMA VS CONGRESSIONAL LEADERS

  • Timeline: Debt debate: President Barack Obama and top lawmakers will meet again Monday in search of a deal on slashing the U.S. budget deficit and raising the $14.3 trillion debt ceiling before the United States defaults.
    Obama wants to strike a deal well before August 2, when the Treasury Department says it will no longer be able to honor its obligations and issue new bonds without breaching the limit that Congress set on how much the United States can borrow.
    Republican and Democratic lawmakers say any increase must include measures to ensure the country’s debt remains at a sustainable level. The debt-reduction debate is a sharp shift for Washington, which less than a year ago was focused on additional deficit spending to lower the unemployment rate.
    Following is a timeline of the debate…. – Reuters, 7-11-11
  • Factbox: What’s on the table in debt talks: President Barack Obama and congressional leaders resume their White House talks on Monday to see if they have the makings of a deal to trim budget deficits and avert a looming default.
    The Treasury Department has warned it will run out of money to cover the country’s bills if Congress does not raise the $14.3 trillion debt ceiling by August 2.
    Although Democrats and Republicans agree on the need for trillions of dollars in budget savings, they remain sharply divided about how to get there.
    Following is a summary of the debate… – Reuters, 7-11-11According to a Gallup poll released this week, 20% of Americans favor an approach that includes only spending cuts. Nearly a third — 32% — said they favored a deal created “equally with spending cuts and tax increases” and 30% said the deal should be made “mostly with spending cuts.” Only 4% favored a deal done just with tax increases. – USA Today, 7-15-11
  • Various options for Obama, debt showdown foes in Congress: President Barack Obama, House Republicans and Senate leaders Mitch McConnell, R-Ky., and Harry Reid, D-Nev., have competing ideas about how to handle the need to increase the government’s borrowing limit and cut the budget. Highlights include…. – WaPo, 7-15-11
  • Obama news conference: What the polls say: As Obama steps to the podium for his third press conference in two weeks, polls show the public widely concerned about the consequences of a default, but also troubled by the prospect of higher government spending if the debt limit is increased.
    Dueling concerns over spending, default – A Post-Pew survey released Monday finds 74 percent of the public “very” or “somewhat” concerned about the economic consequences of default, but fully 78 percent are concerned about higher government spending if the debt limit is raised. Asked to choose among worries, slightly more Americans – 47 percent – say raising the debt limit is a greater concern, while 42 percent are most worried about not raising the debt ceiling.
    Overall approval steady, but divided – Obama’s overall approval rating stands at the mid-to-upper 40s in recent polls, about even with his disapproval numbers. Obama clocks in at 44 percent approval in Gallup’s most recent tracking numbers, 49 and 47 percent in recent Ipsos-Reuters and Quinnipiac polls, the latter among registered voters.
    Obama trumps GOP on economy – Obama has regained a narrow advantage over Republicans in trust to handle the economy in a new Quinnipiac poll, and registered voters say by 48 to 34 percent that Republicans in Congress would be to blame if the debt limit is not raised. Despite gaining a recent edge over the GOP, a consistent majority have disapproved of his handling of the economy, including 56 percent in the recent Quinnipiac poll and 52 percent in the CBS/NYT poll in late June.
    Public skeptical of Obama on spending and taxes – Working against Obama, 42 percent of voters in the Quinnipiac poll – and 49 percent of independents – say Obama would cut “too little” government spending in combination with raising the debt ceiling, and four in 10 believe he would raise taxes too much. – WaPo, 7-15-11
  • Obama on debt ceiling: Is he winning over Americans?: An increasing number of Americans are concerned about the consequences of not raising the debt ceiling, according to a new poll. President Obama has been blunt about the consequences of default…. – CS Monitor, 7-12-11“We might as well do it now — pull off the Band-Aid; eat our peas.” – President Barack Obama“I know you all love to write the soap opera here.” — Eric Cantor (R-Va.), joking about the Republican-Democrat split.“It’s time for tough love. Don’t let them scare you by telling you that the country’s going to fall apart.” — Michele Bachmann (R-Minn.), speaking to a cheering crowd in Iowa over the weekend.“I hope and pray and believe they should not raise the debt ceiling. These historic, dramatic moments where you can draw a line in the sand and force politicians to actually do something bold and courageous are important moments.” – Tim Pawlenty, Former Minnesota governor

    “A cataclysmic game of chicken. Negotiating with a gun to your head. A Thelma & Louise-style full throttle off a cliff.” — John Avlon at the Daily Beast, on the “dire metaphors” for the debate.

    “The debt ceiling is a gut-check time for all Republicans on spending and size of government. … Apparently, Gov. Romney is still checking his gut to figure out where he should stand.” — Alex Conant, spokesman for former Minnesota Gov. Tim Pawlenty.

    “You and I have decided to have lunch together today. We both need lunch. We both know we’re going to have lunch. But we don’t agree on where to eat. So you propose Mexican, but I counter with Chinese, and warn that if you refuse, neither of us will get to eat lunch ever again. Deal? … Of course not. But that’s pretty much the GOP’s strategy on the debt-ceiling negotiation.” — Ezra Klein on the partisan bickering

    “It’s a hostage negotiation! It’s a lunch conversation! No, it’s the debt ceiling debate.” — Eric Thompson at the Atlantic, on how to characterize the debt ceiling.

    “We are at each others throats more than is necessary.” — Jeff Immelt, chairman of Obama’s outside panel of economic advisers, calling the White House and Congress to strike a deal on Monday.

JULY 18, 2011: BIPARTISAN SENATE DEBT PLAN EMERGES

  • Senate debt plan emerges Members seem likely to raise limit; outcome in House more iffy: A bipartisan effort in the Senate to allow President Barack Obama to raise the federal debt ceiling in exchange for about $1.5 trillion in spending cuts over 10 years gained momentum Sunday, as leaders agreed they would have to act in the next two weeks to avert a potential default by the U.S. government.
    The growing sentiment for raising the federal limit on U.S. borrowing sets the stage for a week of largely scripted actions on Capitol Hill, where leaders in both chambers are looking to build support for the plan being crafted by Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky.
    Republican leaders will first push forward in the House and the Senate with a constitutional amendment to balance the federal budget. The measure is virtually certain to fail in the Senate, which will then take up the debt limit proposal by midweek.
    If that clears the Senate, the House is expected to revise the measure, adding a proposal to reduce the deficit by $1.5 trillion over 10 years — savings that will come through cuts to domestic programs and not cuts to entitlement or new taxes.
    The plan would also create a new congressional panel that would, by the end of the year, seek to come up with a way of reducing the deficit by another $2.5 trillion or more through cuts in entitlements and other steps.
    Although the debt-limit plan has broad support in the Senate, the prospects in the House are less clear and rely largely on whether House Speaker John A. Boehner, R-Ohio, will bring the proposal up for a vote and how many House Democrats would support it since few Republicans are expected to get behind it…. – WaPo, 7-18-11
  • Talks continue over debt ceiling: The White House and congressional leaders exchange possible proposals through the weekend. No immediate breakthrough is apparent.
    Hoping to break the impasse over the nation’s debt limit, White House and congressional leaders and aides continued their private discussions Sunday to exchange possible proposals to keep the government from defaulting on its bills.
    Senate leaders have shaped the outline of a compromise that would attach as much as $1.5 trillion largely in spending reductions to a debt ceiling increase, and establish a new congressional committee to present further cuts for a vote by year’s end. Other ideas also were being considered.
    No signs emerged that the negotiations were as contentious as last week, when tempers sometimes flared. But no immediate breakthrough was apparent.
    “There have been a lot of conversations going on, and they will continue,” Jacob Lew, director of the White House Office of Management and Budget, said on CNN’s “State of the Union.” Congress has been “figuring out what it could do,” Lew added on NBC’s “Meet the Press.” “That will continue over the next day or so.” President Obama and Vice President Joe Biden participated in the private discussions, which took place all weekend, the White House said…. – LAT, 7-18-11

JULY 17, 2011: DEBT IMPASSE CONTINUES — OBAMA SETS NEW DEADLINE FOR JULY 22, 2011

“It’s important for the American people that everybody in this town set politics aside, that everybody in this town set our individual interests aside, and we try to do some tough stuff. And I’ve already taken some heat from my party for being willing to compromise.” — President Obama on July 15, 2011 as he delivered a message to Republicans worried about angering the GOP’s right flank.

  • Democrats, Republicans still at odds on debt ceiling: With five days remaining before President Barack Obama’s deadline for a deal to raise the U.S. debt ceiling, Republicans and Democrats have yet to agree on a big plan to cut the nation’s deficit and raise its debt limit in time to avoid an unprecedented U.S. default.
    Efforts to reach a comprehensive deficit-reduction deal are at an impasse over tax breaks as lawmakers — with an eye on 2012 elections — hold on to entrenched positions.
    This week, senators will likely move forward with a potential fallback plan that would authorize more borrowing power and could also include some spending cuts.
    Obama had set a Friday deadline for Congressional leaders from both parties to agree on a deal to raise the country’s debt ceiling. He said the July 22 deadline would give Congress enough leeway to write and pass legislation before August 2, when the government will run out of money to pay its bills…. – Reuters, 7-17-11
  • ‘Big Deal’: $4T Budget Cut Package on Table, Sources Say: With the country’s credit card about to be cancelled, the White House said today there is still time to cobble together a “big deal” to lower the deficit.
    President Obama’s budget director, Jack Lew, says even though only a few days remain to start the legislative process to raise the debt ceiling, he is confident something will be approved.
    “I believe the debt will be extended,” he said on ABC’s “This Week.” “I think notwithstanding the voices of a few who are willing to play with Armageddon, responsible leaders in Washington are not.”
    And it does appear the “big deal” is back on the table. Capitol Hill sources tell ABC News that Obama and Republican House Speaker John Boehner are again talking about reducing the deficit by more than $4 trillion over the next decade or so. Boehner reportedly wants the president to lay out specific cuts to entitlement programs. But many Republicans doubt such a plan can get through Congress.
    Over the weekend the two leaders in the Senate continued to devise a “plan B” to avert the country from potentially defaulting.
    “That’s what the Senate is proceeding with,” Republican Sen. Jon Kyl of Arizona said this morning on ABC’s “This Week with Christiane Amanpour.” “Now, the House of Representatives has to make its decision about what it will do. But I’m simply answering your question, at the end of the day, I don’t think there will be a default.”
    The plan would give the president the authority to raise the country’s debt ceiling, while allowing Congress to avoid having to directly vote for the measure.
    “It takes the pressure off all the politicians, but it allows us to pass a debt limit without making the hard choices that this country has to make,” Republican Sen. Tom Coburn of Oklahoma said this morning on CBS’ “Face the Nation.”
    The standoff between Republicans and Democrats is led by House Majority Leader Eric Cantor of Virginia and a group of other Republicans on Capitol Hill who refuse to consider tax increases as part of the deal.
    While many Republicans refuse to consider tax hikes, some Democrats are unwilling to compromise on entitlement programs. House Democratic Leader Nancy Pelosi says she won’t accept a deal that includes cuts to entitlement programs like Social Security and Medicare…. – ABC News, 7-17-11
  • Parties assess debt options as time runs short: The White House held out hope Sunday that congressional leaders still had time “to get something big done” with President Barack Obama as the deadline for raising the nation’s debt ceiling drew nearer without a solution.
    “I think that what is encouraging is that the leaders in Congress seem to have all agreed that we can’t push to a default,” White House budget director Jack Lew said. “So I think that there are many conversations going on in order to make sure that doesn’t happen.”
    White House and congressional aides are continuing discussions Sunday as Congress moves on two tracks to find a solution for increasing the nation’s borrowing authority while reducing long-term deficits. This comes after the failure to get a deal after five straight days of meetings between Obama and congressional leaders at the White House.
    “I think there’s still time to get something big done,” Lew said…. – AP, 7-17-11
  • Debt crisis may help Obama woo independent voters: It’s possible the debt-ceiling debate will turn out badly for President Barack Obama. For now, however, it may be helping his image with a vital group: independent voters, who have decided the last several elections. He’s certainly playing to them.
    “It’s important for the American people that everybody in this town set politics aside, that everybody in this town set our individual interests aside, and we try to do some tough stuff. And I’ve already taken some heat from my party for being willing to compromise,” Obama said Friday as he delivered a message to Republicans worried about angering the GOP’s right flank. “My expectation and hope is, is that everybody, in the coming days, is going to be willing to compromise,” he said pointedly.
    Over the past week, Obama repeatedly has positioned himself as someone willing to make political sacrifices to reach a bipartisan accord and avoid a potentially disastrous default on U.S. obligations. He says some trims are needed to Social Security and Medicare, the safety-net programs dear to liberal Democrats. He also says an eventual package must include some tax increases, but only on the wealthiest Americans. The reactions from GOP and Democratic leaders — they are worried about angering their conservative and liberal bases with a deal to raise the debt limit — are boosting Obama’s image as a comparative centrist, a posture that could appeal to independent voters in next year’s presidential election…. – AP, 7-17-11
  • G.O.P. Freshmen Say Debt Concerns Them More Than Re-election: For years, legislation to raise the federal debt limit offered plenty of political theater on Capitol Hill, with the party out of power using it to rail against the party in power. As a senator, Barack Obama said in 2006 that a bill to raise the debt limit was “a sign of leadership failure.” This time is different, and not only because the parties have switched roles. Now, conservative House Republicans have a virtual veto over a measure to increase the debt ceiling, and some freshmen in both chambers say they worry more about changing the ways of Washington than about getting re-elected.
    “Re-election is the farthest thing from my mind,” said Representative Tom Reed, a freshman Republican from upstate New York. “Like many of my colleagues in the freshman class, I came down here to get our fiscal house in order and take care of the threat to national security that we see in the federal debt. We came here not to have long careers. We came here to do something. We don’t care about re-election.”
    It is not clear how genuine or widespread that sentiment is in Congress, but regardless, it has upended what President Obama said on Friday had been a “difficult but routine process” in past years. The sheer size of the debt and its rapid growth in recent years have emboldened fiscal conservatives in the House, prompting some of them to pledge not to vote for a higher debt ceiling even if a compromise can be reached before Aug. 2, when the Treasury Department says it will hit the $14.3 trillion debt cap and run out of borrowing authority…. – NYT, 7-17-11
  • Democratic and Republican politicians call for debt ceiling talks but impasse remains: Talks to raise the nation’s debt ceiling remain at an impasse as the deadline approaches – but political leaders from both parties may meet as soon as Sunday to resume brokering a deal.
    No negotiations were held yesterday, but White House officials asked Congressional leaders to keep their calendars clear this weekend to work toward an agreement before the nation defaults on its debt Aug. 2.
    President Obama, who has held a series of recent news conferences to make his case to the American public, devoted his weekly address to urge Republicans to compromise with their Democratic counterparts.
    “The truth is, you can’t solve our deficit without cutting spending,” said Obama, acknowledging that some in his own party weren’t happy with his proposals. “But you also can’t solve it without asking the wealthiest Americans to pay their fair share. “So I’ve put things on the table that are important to me and to Democrats, and I expect Republican leaders to do the same,” Obama said…. – NY Daily News, 7-17-11

JULY 16, 2011: DEBT CEILING DEAL DEADLINE

“This is not a matter of the American people knowing what the right thing to do is,” Obama said. “It’s a matter of Congress doing the right thing and reflecting the will of the American people.” — Barack Obama

“The truth is, you can’t solve our deficit without cutting spending,” Obama said in his weekly radio and Internet address on Saturday. “But you also can’t solve it without asking the wealthiest Americans to pay their fair share — or without taking on loopholes that give special interests and big corporations tax breaks that middle-class Americans don’t get.” — Barack Obama

  • Debt limit crisis: what’s happening today?: No weekend negotiations on the debt limit crisis, though President Obama has told top lawmakers to keep their schedules free. In their weekend addresses, Obama and designated hitter Sen. Orrin Hatch made familiar arguments…. – CS Monitor, 7-16-11
  • Developments in U.S. debt talks: Here is what is happening on Saturday in negotiations to raise the U.S. $14.3 trillion debt limit.
    President Barack Obama in his regular weekly radio address calls for shared sacrifice in a deficit reduction package that would help clear the way for Congress to raise the debt ceiling. He says he’s willing to compromise and calls on members of Congress to do the same. Republicans have refused to consider tax increases to reduce the deficit.
    Senator Orrin Hatch in the weekly Republican radio address talks about the need for a constitutional amendment requiring the federal government to balance its finances.
    No face-to-face negotiations are planned over the weekend between Obama and congressional leader but that could change.
    Senate Democratic Leader Harry Reid and Republican Leader Mitch McConnell are said to be discussing modifications to a plan put forward by McConnell that would raise the debt limit and put nearly all the burden on Obama to carry it out.
    Lawmakers are under growing pressure from the U.S. business community and U.S. creditors to strike a deal. China, the United States’ biggest foreign creditor with more than $1 trillion in Treasury debt, is urging Washington to adopt responsible policies to protect investor interests. – Reuters, 7-16-11
  • Congress seeks debt solution, Obama goes to public: Racing the debt clock, Congress is working on dual tracks while President Barack Obama appeals to the public in hopes of influencing a deal that talks have failed to produce so far.
    “We have to ask everyone to play their part because we are all part of the same country,” Obama said Saturday, pushing a combination of spending cuts and tax increases that has met stiff resistance from Republicans. “We are all in this together.”
    In his weekly radio and Internet address, Obama said the wealthiest must “pay their fair share.” He invoked budget deals negotiated by GOP President Ronald Reagan and Democratic House Speaker Tip O’Neill, and Democratic President Bill Clinton and Republican Speaker Newt Gingrich.
    “You sent us to Washington to do the tough things, the right things,” he said. “Not just for some of us, but for all of us.”… – AP, 7-16-11
  • Obama’s weekly address: Tax the rich as part of debt relief: President Obama isn’t giving up on his effort to include some tax increases in a “balanced” deficit-reduction plan.
    Obama uses his weekly address today to reiterated his pitch that along with domestic and defense spending cuts and changes to Medicare, taxes should rise for upper-income Americans and corporations that enjoy special tax loopholes.
    “If we’re going to ask seniors, or students, or middle-class Americans to sacrifice, then we have to ask corporations and the wealthiest Americans to share in that sacrifice,” Obama said. “We have to ask everyone to play their part. Because we are all part of the same country. We are all in this together.”… – USA Today, 7-16-11
  • Obama may back fallback plan Still pushes tax increases as part of ‘big deal’: House Speaker John Boehner gave no public hint of accord after meeting with top presidential advisers yesterday.With talks on a big budget deal locked in stalemate, congressional leaders turned yesterday to negotiating a fallback plan for raising the debt limit as President Obama and House Republicans intensified their efforts to win over public opinion for the long political battle ahead.
    Given the impasse, House Republicans scheduled a vote for Tuesday on a measure that would cut deeply into the federal budget, cap government spending for the years ahead, and approve a constitutional amendment requiring a balanced budget. The Democratic-controlled Senate tentatively planned a vote for Wednesday on a balanced budget amendment.
    While neither measure will make it into law given opposition from Obama, Republicans are eager to reassure their conservative base that they are not backing down and that they will continue to press their case for vastly shrinking the government through the 2012 elections.
    Obama signaled that he would support the fallback plan, based on a proposal from Senator Mitch McConnell of Kentucky, the Republican minority leader, which would defer the bigger budget fight but allow for the debt limit to be raised…. – Boston Globe, 7-16-11
  • Obama eyes more deficit talks: President Barack Obama will decide on Saturday whether to summon lawmakers for a new round of debt and deficit talks, weighing the chances of progress as both sides stick to their positions on spending and taxes.
    Congress must raise the $14.3 trillion limit on U.S. borrowing by August 2 or the government will run out of money to pay its bills, causing turmoil in global financial markets and potentially forcing the United States into another recession.
    The top two Republicans in the House of Representatives, John Boehner and Eric Cantor, met on Friday with Treasury Secretary Timothy Geithner and Bill Daley, the White House chief of staff.
    But prospects for a deal anytime soon appear unlikely, as the House and Senate were expected to spend much of next week debating measures that have little chance of becoming law…. – Reuters, 7-16-11
  • Obama White House touts ‘compromise’ position: The White House is looking to build political support for its debt reduction plans by promoting the concept of compromise. The Republicans, meanwhile, say that — for Obama — “compromise” means taxes.
    White House senior adviser David Plouffe has e-mailed supporters a video of Obama talking to young people about politics.
    “The nature of our democracy and the nature of our politics is to marry principle to a political process that means you don’t get 100% of what you want,” Obama says at one point.
    The White House is promoting what it calls a “balanced” debt reduction plan, one that includes tax increases on wealthy Americans as well as budget cuts.
    “The President is willing to make tough cuts with real impacts, not easy decisions,” Plouffe writes in introducing the video, also available on the White House website. “But most Congressional Republicans have dug in and demanded that the sacrifice fall only on the middle class, seniors and struggling Americans.”
    Plouffe adds that “compromise isn’t a dirty word — in fact, it’s the only way our democracy can get big things done.”… – USA Today, 7-16-11
  • Obama holds news conference on debt talks: President Obama challenged Congress on Friday to fulfill its obligation to put the country on the right fiscal footing for decades to come by slashing spending and increasing revenue as part of a bold package to raise the nation’s $14.3 trillion debt limit.
    In a news conference at the White House after five days of often-tense closed-door talks with congressional leaders, Obama said there is still time to put together a “big deal” before the Aug. 2 deadline imposed by the Treasury Department to avoid the first government default on its loans.
    He cautioned, however, that time is running short and said he will ask leaders if they have come up with a solution before the end of the weekend. “If they show me a serious plan, I’m ready to move,” Obama said.
    At issue: Democrats want trillions of dollars in spending cuts to be accompanied by new revenue through ending tax breaks for big oil companies and other such measures.
    “The American people are sold” on a plan that would do both, Obama said. “The problem is that members of Congress are dug in ideologically.”
    The pressure is on: Both Standard & Poor’s and Moody’s Investor Services have said they will consider downgrading the U.S. credit rating if a deal is not made soon…. – USA Today, 7-15-11
  • Is Plan B Now Plan A in the Debt Talks? The pieces are moving in place for a debt ceiling deal, but it still may be a long shot:
    By most accounts, the debt ceiling talks have reached a kind of dead end. While not over, the two sides have realized that there just isn’t any more common ground to haggle over. With just two weeks left until the Treasury Department’s deadline to raise the federal debt limit, the pieces are beginning to come together for a steroid version of Senate Minority Leader Mitch McConnell’s plan to raise the debt ceiling in increments over the next year and a half. But the plan still has a tough road ahead, with conservatives crying foul over concessions to President Obama.
    The latest version of the plan is a hybrid of McConnell’s original idea and what both sides have loosely agreed to in the White House debt talks. Democratic sources say that McConnell and Senate Majority Leader Harry Reid are working on a proposal that would immediately enact the $1.5 trillion in spending cuts which White House and GOP negotiations have generally agreed on, and which then would space out debt ceiling hikes through the rest of 2011 and 2012. Those spending cuts would cover only federal discretionary spending, leaving entitlement programs such as Medicare and Social Security untouched. Lawmakers are also considering adding a provision which would set up a Senate committee to recommend further spending cuts, and bring them to a vote on the Senate floor. President Obama didn’t mention it specifically in his press conference Friday, but did note that he’d support a plan less ambitious than the grand bargain he had been pushing.
    In the meantime, both the House and Senate will soon vote on the so-called “Cut, Cap, and Balance” plan promoted by the Republican Study Committee, a conservative House group. That proposal would enact much deeper spending cuts, and only trigger a debt ceiling hike once the Senate and House had passed a balanced budget amendment and sent it to the states for ratification. It’s unlikely to pass, but is seen as a necessary catharsis for conservative lawmakers who may have to hold their noses and vote for a smaller deal.
    But not all will. Conservative opposition to the idea continues to grow. South Carolina Republican Sen. Jim DeMint, a regular thorn in the GOP leadership’s side, promised to use “every tool in the Senate” to stop McConnell’s plan. “No Republican was elected to give President Obama more power and that’s what this plan does,” DeMint wrote on his Twitter account. It’s not an idle threat. Even one senator could block the bill for days, making it difficult to pass under a tight deadline…. – US News, 7-15-11
  • A Bad Economy Could Harm House Republicans: If you are a Republican trying to keep your job in Congress, your feelings about President Obama notwithstanding, would you rather the economy be better or worse?
    The answer is actually not so obvious. In five election cycles in the last 60 years, a poor economy combined with a divided government. This is how they proceeded… – NYT, 7-15-11

JULY 15, 2011: PRESIDENT OBAMA’S SECOND PRESS CONFERENCE ON DEBT CEILING CRISIS — SPEAKER JOHN BOEHNER ALSO SPEAKS TO PRESS

“Listen, we’re in the fourth quarter here. Time and time again Republicans have offered serious proposals to cut spending and address these issues, and I think it’s time for the Democrats to get serious as well. We asked the president to lead. We asked him to put forward a plan – not a speech, a real plan – and he hasn’t.” — John Boehner

“This is not some abstract issue. Congress has run up the credit card and we now have an obligation to pay our bills.” — President Barack Obama

“We have a unique opportunity to do something big. We have a chance to stabilize America’s finances for a decade, 15 years, or 20 years, if we are willing to seize the moment.” — President Barack Obama

“You have 80 percent of the American people who support a balanced approach. Eighty percent of the American people support an approach that includes revenues and includes cuts. So the notion that somehow the American people aren’t sold is not the problem,” “The problem is members of Congress are dug in ideologically into various positions because they boxed themselves in with previous… — President Barack Obam at a White House briefing room news conference.

John Boehner: The President said today that the American people are “sold” on job-crushing tax hikes. Most Americans would beg to differ. Our looming debt crisis isn’t the result of Washington not taxing enough; it’s the result of our government spending too much. It’s absurd & self-destructive to continue dumping taxpayer money into a failed ‘stimulus’ philosophy. The White House must step up & embrace real spending reductions. — – John Boehner

  • Full Text July 15, 2011: President Obama’s Second Press Conference This Week on the Debt Ceiling Negotiations — WH, 7-15-11
  • Live blog of Obama’s press conferenceCNN, 7-15-11
  • Obama’s hands-on negotiation a political necessity: President Barack Obama’s decision to haul lawmakers in day by day to negotiate a debt deal comes down to reality: He has no other choice. The president has essentially cleared his agenda to deal with one enormous crisis.
    The threat of an unprecedented government default, combined with the shrinking time left to prevent it, has prompted an extraordinary dynamic in a town of divided government and divisive politics. For five straight days, the president and leaders of Congress have gathered in the Cabinet Room to try to work it out…. – AP, 7-15-11
  • House to Vote on $2.4 Trillion Debt Increase, Cuts: House Republicans will vote next week on legislation to limit spending and tie a $2.4 trillion increase in the U.S. debt ceiling to a constitutional amendment to balance the budget, a plan President Barack Obama dismissed as not “serious.”
    While the measure may win acceptance by the Republican-led House, it can’t pass the Democratic-controlled Senate, said Representative Steny Hoyer of Maryland, the House’s No. 2 Democrat. It will let Republicans put their stance on the record while offering no immediate resolution to talks in Washington aimed at reaching a deficit-cutting deal by an Aug. 2 deadline for raising the $14.3 trillion debt ceiling.
    “You’ll probably see the House vote on a couple of things just to make political statements,” Obama said at a White House news conference today. The Republican plan, which would mandate spending cuts of at least $2.4 trillion without increasing tax revenue, “doesn’t seem like a serious plan to me,” the president said.
    A constitutional amendment requires a two-thirds vote of both House and Senate, and then ratification by three-fourths of the 50 states. “We don’t need a constitutional amendment to” revamp the government’s finances, Obama said. “What we need to do is do our jobs.”… – Bloomberg, 7-15-11
  • House Republicans Plan Vote on Deficit: With budget negotiations with the White House stalled, Speaker John A. Boehner of Ohio said Friday that the House would vote next week on a three-part plan to cut the deficit, cap federal spending as a share of the economy and amend the Constitution to require a balanced budget.
    The plan, which has a companion in the Senate, would represent the House position in the final stages of the debate as the federal government nears the limit of its borrowing power. While it would not appear to have a chance of passing the Democrat-controlled Senate, and President Obama is opposed, it could provide a legislative avenue to increasing the debt limit as it makes it way through Congress.
    The House Republican leader, Representative Eric Cantor of Virginia, said the House would move on its own because the president’s deficit-reduction proposals fell far short of what was needed…. – NYT, 7-15-11
  • Obama calls on Congress to act on big debt ceiling deal: President Obama challenged Congress on Friday to put the country on the right fiscal footing for decades to come by slashing spending and increasing revenue as part of a package to raise the nation’s $14.3 trillion debt limit.
    In a news conference at the White House after five days of often-tense closed-door talks with congressional leaders, Obama said there is still time to put together a “big deal” to solve the nation’s debt and deficits problem for the long term and raise the debt ceiling before the Aug. 2 deadline imposed by the Treasury Department.
    He cautioned, however, that time is running short to avoid the first government default on its loans, something Federal Reserve Chairman Ben Bernanke and a host of economists have warned would be catastrophic. Obama said he is asking leaders to come up with a solution before the end of the weekend. “If they show me a serious plan, I’m ready to move,” Obama said…. – USA Today, 7-15-11
  • Obama calls on Congress to ‘seize the moment’ on debt talks: President Obama with new immediacy today reiterated his call for a sweeping plan to deal with the nation’s long-term debt problems. He warned GOP lawmakers that time is running out on a deal that would prevent the U.S. from defaulting on its financial obligations.
    In his second news conference this week on the issue, Obama called on lawmakers to give him a “serious” plan to raise the debt ceiling within the next 24 or 36 hours. But he emphasized the need for Congress to “put politics aside” and tackle an “ambitious” solution to the nation’s deficit problems–not just a quick fix.
    “We have a unique opportunity to do something big,” Obama said. “We have a chance to stabilize America’s finances for a decade, for 15 or 20 years, if we are willing to seize the moment.”
    But the president acknowledged it would be “tough” to get Democrats and Republicans to agree on a significant proposal before Aug. 2, when the Treasury Department says the U.S. will begin defaulting on its more than $14 trillion debt. Obama warned that if nothing is done, Americans could be facing financial catastrophe, including more job loss and potentially higher interest rates, which he described as “effectively a tax increase on everybody.”… – AP, 7-15-11
  • Obama Reiterates Desire for Comprehensive Budget Package: In a news conference, President Obama held out hope Friday that a broad deal could be reached on raising the debt ceiling.Doug Mills/The New York TimesPresident Obama held out hope Friday that a broad deal could be reached on raising the debt ceiling.
    President Obama on Friday reiterated his desire to reach a grand bargain that would deal with the nation’s long-term debt problems even as leaders in Washington take action to avoid a financial default by the government.
    Mr. Obama said that he was encouraged by comments from lawmakers in both parties signaling an understanding of the need to increase the nation’s debt ceiling in the next two weeks.
    “The American people expect more than that. They expect that we try to solve our problem,” Mr. Obama said. “We have a chance to stabilize America’s finances for a decade, for 15 years or 20 years, if we are willing to seize the moment.”… – NYT, 7-15-11
  • Boehner: Obama has no debt plan. Republicans do: The House next week will take a vote to raise the debt ceiling and pass a balanced budget amendment, House Republican leaders said today.
    The plan is unlikely to go anywhere, since a balanced budget amendment would likely fail in the Democrat-led Senate, but GOP leaders nevertheless called it a serious plan to raise the debt ceiling. They said President Obama and Democrats have failed to come up with an equally serious plan…. – CBS News, 7-15-11
  • Debt ceiling adversaries take a time out to face the microphones: With roughly a week left for President Obama and congressional leaders to reach an agreement on raising the debt ceiling, both sides took time out to argue their case to the public…. -
    With roughly a week to go for President Obama and congressional leaders to reach agreement on raising the nation’s debt ceiling and prevent a government default, both sides in the debate took time out from negotiations to argue their case to the public.
    Friday morning began on Capitol Hill with House Speaker John Boehner (R) telling reporters that congressional Democrats and the president had not been serious in the Republicans’ sometimes heated negotiations with the White House…. – CS Monitor, 7-15-11
  • Debt ceiling: financial world warns Washington to hurry up: Fed Chairman Ben Bernanke warns of a ‘self-inflicted’ wound, and Wall Street firms see dire consequences, if stalemate over how to raise the US debt ceiling persists…. – CS Monitor, 7-15-11
  • Allan Lichtman: Obama’s hands-on negotiation a political necessity: “It’s absolutely remarkable,” said Allan Lichtman, a presidential historian at American University.
    “Obama has got to get this done,” Lichtman said. “Even if people blame the Republicans in Congress, he’s the president. And if things go rotten on his watch, he pays for it. This is his moment. And he knew it was going to be trouble, because Republicans have very little incentive to make a deal.” – AP, 7-15-11

JULY 14, 2011: PRESIDENT OBAMA SETS DEBT DEAL TIME LIMIT T-36 HOURS

“It’s decision time. We need concrete plans to move this forward.” — President Barack Obama

“We’ve looked at all available options, and we have no way to give Congress more time to solve this problem. The eyes of the country are on us, and the eyes of the world are on us, and we need to make sure that we stand together and send a definitive signal that we are going to take the steps necessary to avoid default.” — Treasury Secretary Timothy F. Geithner

  • ‘Decision Time’ on Budget, Obama Tells Leaders: President Obama threw the deadlocked budget negotiations back to Congress on Thursday, telling Republicans and Democrats to try to work out an agreement to avert a government default, and suggesting that more ambitious efforts to cut the deficit had hit a wall.
    After a polite but inconclusive session that covered familiar ground and made no headway, Mr. Obama told the Congressional leaders to confer with their rank-and-file members over the next 24 to 36 hours to “figure out what can get done,” said a Democratic official briefed on the negotiations.
    The president said he might summon the leaders to the White House over the weekend if there was no progress; he has scheduled a news conference for Friday morning to argue his case publicly. On Capitol Hill, leaders of both parties were focused increasingly on a proposal by the Senate Republican leader, Mitch McConnell of Kentucky, that could provide a way out of the stalemate on the debt limit…. – NYT, 7-14-11
  • Obama gives leaders ’24 to 36 hours’ to come to debt agreement: President Obama told congressional leaders at their latest debt-limit meeting that they must come to an agreement on the way forward by early Saturday morning or else they will be called back to the White House this weekend, aides from both parties with knowledge of the meeting said Thursday evening.
    At a meeting that lasted 80 minutes, congressional negotiators and the White House finished their review of the work done by a group led by Vice President Biden, said the aides, who were not authorized to speak publicly about the meeting.
    At the end, Obama told the bipartisan leaders that, over the next 24 to 36 hours, he wanted them to indicate a path forward that would be able to pass both chambers.
    No White House meeting is set for Friday. Instead, leaders are expected to go to their rank-and-file members to discuss the negotiations.
    Thursday’s meeting ended at 5:43 p.m. Shortly afterwards, the White House announced that Obama would hold a news conference at 11 a.m. Friday…. – WaPo, 7-14-11
  • Looking for debt deal, Obama outlines cuts: President Obama implored congressional leaders Thursday to reach a deal on raising the nation’s $14.3 trillion borrowing limit by this weekend to reassure jittery world financial markets, and he suggested he could settle for a smaller deficit-reduction package than he originally sought.
    Rather than continue to push for $4 trillion in savings over the next decade, Obama outlined a plan that would achieve roughly $2 trillion, almost entirely from spending reductions. That marks a major concession — one the president is likely to address at a news conference scheduled for 11 a.m. ET this morning.
    At the same time, Senate Republican leader Mitch McConnell and Democratic leader Harry Reid forged ahead with an even smaller deal of their own, one that represents a second fallback plan. It would allow Obama to raise the debt limit and create a process by which Congress would vote in the future on spending reductions…. – USA Today, 7-14-11
  • As White House talks falter, Senate works on agreement to raise debt limit: President Obama prepared Thursday to bring bipartisan talks over the debt to a close, as Senate leaders worked across party lines to craft an alternative strategy to raise the nation’s $14.3 trillion debt limit and avert a government default.
    “It’s decision time,” Obama told congressional leaders after meeting at the White House for a fifth straight day. Obama gave Republicans until early Saturday to tell him whether any of three options for trimming the federal budget would win GOP support.
    “We need concrete plans to move this forward,” he said.
    A breakthrough in the White House talks looked unlikely, however, leaving the Senate framework as the chief option for raising the debt limit before Aug. 2, when the Treasury will be unable to pay its bills without additional borrowing authority.
    That deadline loomed ever larger Thursday, as China, the U.S. government’s largest foreign creditor, called on U.S. policymakers to take action to protect the interests of investors. Federal Reserve Board Chairman Ben S. Bernanke warned that failure to raise the debt ceiling would amount to “a self-inflicted wound” that would cause “a very severe financial shock” to the global economy. And Treasury Secretary Timothy F. Geithner told lawmakers that they are running out of time…. – WaPo, 7-14-11
  • What Happened Between Cantor and Obama?: Representative Eric Cantor of Virginia, the House majority leader, speaks to reporters on Monday on Capitol Hill.Karen Bleier/Agence France-Presse — Getty ImagesRepresentative Eric Cantor of Virginia, the House majority leader, speaks to reporters on Monday on Capitol Hill. Something happened between President Obama and Representative Eric Cantor of Virginia on Wednesday night.
    The stakes have always been high as Mr. Obama and Republican leaders face off over fundamental questions about the nation’s debt, spending, taxes and entitlement programs. But placed in the context of the deepening partisan discourse in Washington over the past 72 hours, the sharp exchange between the president and Mr. Cantor, the House majority leader, at the end of Wednesday’s negotiating session stands as perhaps the most revealing moment of the personalities and the politics at play.
    Like most important dramas in Washington, the brief but tense back-and-forth between Mr. Cantor and Mr. Obama took place behind closed doors. But in typical Washington fashion, the participants quickly began sketching out a script as soon as it was over. What happened, exactly, depends on which version of that script one reads. Each is loaded with political spin that aims to portray its side in the best light possible. But both versions suggest that the search for a reasonable middle ground before the Aug. 2 deadline will be increasingly difficult… – NYT, 7-14-11
  • Obama, lawmakers face fresh doubts on debt deal: President Barack Obama and top Republicans faced growing pressure at home and abroad on Thursday to stop deficit talks from spiraling out of control and sending shockwaves through the global financial system.
    Markets reacted skittishly after the fourth straight day of talks between Obama and congressional leaders hit a new low on Wednesday, while divisions within the Republican party seemed to increase the difficulty of striking a deal to extend the nation’s borrowing authority and avoid a default after August 2.
    The Democratic president clashed with Republican lawmakers during an acrimonious two-hour White House session on Wednesday that produced no progress toward a deal. A leading Republican said Obama walked out of the meeting.
    Treasury Secretary Timothy Geithner met with Democratic senators and urged quick action, saying “we are running out of time.”… – Reuters, 7-14-11
  • GOP threatens to bolt on McConnell’s plan: “I would say, ‘No way,’” said Ohio Rep. Jim Jordan, chairman of the conservative Republican Study Committee, whose members constitute roughly three-quarters of the House GOP.
    “Everybody I’ve talked to over here says, ‘No way,’” said Florida Rep. Tom Rooney, a member of the vote-counting whip team.
    But earlier in the day, Boehner declined to pronounce the death of McConnell’s plan, which has gained some traction in the Senate and is being held in reserve as a last-resort option to avoid an economic disaster. Rather than getting a vote as is, the plan will more likely move forward in another form or alongside appetizing additives intended to help Republicans in both chambers digest the debt hike and a cession of power to the president.
    “Mitch described his proposal as a last-ditch effort in case we’re unable to do anything else,” Boehner told reporters Thursday. “And what may look like something less than optimal today, if we are unable to reach an agreement, might look pretty good a couple of weeks from now. I think it’s worth keeping on the table. There are a lot of options that people have floated. And frankly, I think it’s an option that may be worthy at some point.” Boehner said he has “no idea” whether McConnell’s plan will pass his chamber. Several GOP lawmakers said privately that it stands no chance…. – Politico, 7-14-11
  • With no debt deal, Obama would face tough choices Aug. 3 about what bills to pay: What happens if President Obama and Congress don’t strike a debt deal? On Aug. 3, the nation would find out, with Obama forced to make a set of extraordinarily difficult choices about what to pay or not pay. By then, the government’s savings account would be nearly empty and the president would be relying on daily tax revenue to pay the nation’s bills.
    There wouldn’t be enough — in fact, there would be a $134 billion shortfall in August alone.
    As Obama decided what to pay, he would choose among Social Security checks, salaries for members of the military and veterans, unemployment benefits, student loans, and many other government programs, according to administration officials and an independent analysis by a former senior Treasury Department official in the George H.W. Bush administration.
    To protect the nation’s creditworthiness, Obama would have to balance those priorities with the imperative of making payments to investors in U.S. government bonds — ranging from domestic pension funds to the Chinese government…. – WaPo, 7-13-11

JULY 13, 2011: 5TH WHITE HOUSE MEETING; OBAMA & CANTOR SPAR, PRESIDENT WALKS OUT

“I’ve reached my limit. This may bring my presidency down, but I will not yield on this… Enough is enough. … I’ll see you all tomorrow.” — President Barack Obama

Cantor said the president became “agitated” and warned the Virginia Republican not to “call my bluff” when Cantor said he would consider a short-term debt-limit hike. The meeting “ended with the president abruptly walking out of the meeting,” Cantor told reporters in the Capitol. “I know why he lost his temper. He’s frustrated. We’re all frustrated.”

  • Obama ends talks brusquely: President Barack Obama has ended a nearly two hour debt-limit negotiation brusquely, declaring: “Enough is enough” as he rejected Republican demands that he accept a short-term extension of the government’s borrowing authority.
    Democratic officials and Republican aides familiar with the negotiations say the meeting ended after White House officials had identified more than $1.5 trillion in spending cuts over 10 years to reduce the deficit. Pressed by House Republican leader Eric Cantor to accept only months-long debt ceiling increase, Democratic officials say Obama announced: “Enough is enough. We have to be willing to compromise. It shouldn’t be about positioning, and politics and I’ll see you all tomorrow.”… – AP, 7-13-11
  • Tempers flare as debt talks get tense at White House:

    Obama vows to veto any short-term extension, even at risk to his presidency, sources say Cantor, Boehner seek a short-term debt ceiling hike opposed by Obama Moody’s puts U.S. bond rating under review The United States must raise its $14.3 trillion debt ceiling by August 2 or risk a default

    A fifth session of talks in five days is set for Thursday to head off a possible government default. Wednesday’s session ended on a tense note with House Majority Leader Eric Cantor and President Barack Obama squaring off over the Republican’s call for a short-term extension of the federal debt ceiling.
    At one point, Obama said the political wrangling confirmed what the public considers to be the worst of Washington, according to Democratic sources familiar with the talks who spoke on condition of not being identified.
    Multiple sources, also speaking on condition of anonymity, said Obama told the gathering that “this could bring my presidency down,” referring to his pledge to veto any short-term extension of the debt ceiling. Sources say he vowed, “I will not yield on this.”
    Obama to Cantor: Don’t call my bluff
    The exchange concluded almost two hours of talks that failed to achieve a breakthrough….. – CNN, 7-14-11

  • President Obama abruptly walks out of debt ceiling talks: President Barack Obama abruptly walked out of a stormy debt-limit meeting with congressional leaders Wednesday, a dramatic setback to the already shaky negotiations.
    “He shoved back and said ‘I’ll see you tomorrow’ and walked out,” House Majority Leader Eric Cantor (R-Va.) told reporters in the Capitol after the meeting.
    On a day when the Moody’s rating agency warned that American debt could be downgraded, the White House talks blew up amid a new round of sniping between Obama and Cantor, who are fast becoming bitter enemies.
    When Cantor said the two sides were too far apart to get a deal that could pass the House by the Treasury Department’s Aug. 2 deadline — and that he would consider moving a short-term debt-limit increase alongside smaller spending cuts — Obama began to lecture him.
    “Eric, don’t call my bluff,” the president said, warning Cantor that he would take his case “to the American people.” He told Cantor that no other president — not Ronald Reagan, the president said — would sit through such negotiations.
    Democratic sources dispute Cantor’s version of Obama’s walk out, but all sides agree that the two had a blow up. The sources described Obama as “impassioned” but said he didn’t exactly storm out of the room.
    “Cantor’s account of tonight’s meeting is completely overblown. For someone who knows how to walk out of a meeting, you’d think he’d know it when he saw it,” a Democratic aide said. “Cantor rudely interrupted the president three times to advocate for short-term debt ceiling increases while the president was wrapping the meeting. This is just more juvenile behavior from him and Boehner needs to rein him in, and let the grown-ups get to work.”
    On exiting the room, Obama said that “this confirms the totality of what the American people already believe” about Washington, according to a Democratic official familiar with the negotiations, and that officials are “too focused on positioning and political posturing” to make difficult choices.
    Cantor insists he never interrupted the president, and was “deferential,” seeking permission to speak…. – Politico, 7-13-11
  • ‘Enough is enough,’ Obama says, calling for deal: Amid new warnings and fresh signs of strain, President Barack Obama and congressional leaders are entering a perilous debt-limit endgame. The president, declaring “enough is enough,” is demanding that budget negotiators find common ground by week’s end even as the Senate’s top Republican gained followers for his own last-ditch scheme to avoid a government default.
    The continuing impasse was unsettling Wall Street, which up to now had performed as if an increase in the debt ceiling was not in doubt. And the looming Aug. 2 cutoff for action was creating new tensions between the president and Republican leaders.
    Moody’s Investors Service said Wednesday it will review the government’s credit rating, noting there is a small but rising risk that the government will default on its debt. If Moody’s were to lower the ratings, the consequences would ripple through the economy, pushing up rates for mortgages, car loans and other debts. A Chinese rating agency, Dagong Global Credit Rating Co., also warned of a possible downgrade.
    Federal Reserve Chairman Ben Bernanke, addressing lawmakers, warned Wednesday that not increasing the nation’s debt ceiling and allowing the nation default on its debt would send “shock waves through the entire financial system.”
    And in the cauldron of the White House Cabinet Room, Obama and top lawmakers bargained for nearly two hours Wednesday on spending cuts. Obama curtly ended the session when House Majority Leader Eric Cantor, R-Va., urged Obama to accept a short, monthslong increase in debt instead of one that would last through next year’s presidential election.
    “Enough is enough. … I’ll see you all tomorrow,” Obama said, rising from the negotiating table and leaving the room, according to several officials familiar with the session…. – AP, 7-14-11
  • Moody’s moves one step closer to downgrading U.S. debt: Moody’s Investors Service said Wednesday it has put the U.S. government’s top-notch credit rating on review for a possible downgrade because of the risk that Washington will not raise the federal debt ceiling in time to avoid a default.
    The firm added that even a brief failure of the government to pay its bills would mean that the United States’s Aaa rating “would likely no longer be appropriate.”
    The announcement comes after Standard & Poor’s, another of the major credit rating agencies, has said that it would dramatically downgrade the U.S. government’s credit rating if payments were missed.
    The U.S. has long been able to borrow money cheaply because global investors believe the government can be counted on to repay its debts. If credit rating agencies downgrade the U.S. and investors lose their faith in the creditworthiness of the government, the cost of borrowing money — in other words, the interest rate — could rise…. – WaPo, 7-13-11
  • Eric Cantor walks tightrope with GOP: As he has surged to the forefront of debt-limit negotiations and faced round-the-clock scrutiny on cable and radio talk shows, a fundamental question about House Majority Leader Eric Cantor’s high-stakes political maneuvering is being discussed in the halls of power.
    Is he building street cred with House Republicans or overplaying his hand? The answer may be both. Cantor’s allies note that he’s been put in the spotlight by assignment — from Speaker John Boehner and President Barack Obama — not by choice. And they say he has gained political capital within the GOP conference.
    Cantor has a lot riding on the outcome of the debt-limit negotiations. He’ll share in the public blame if they fall apart and the economy tanks, and he’ll face recriminations from his conservative base in the House if he cuts too soft a deal with the president.
    Still, there’s little question that Republicans, led by Cantor’s steadfast loyalty to their bottom line, have forced the debt-limit debate to be framed in terms of trillions in cuts instead of the clean debt increase Obama originally wanted.
    With only 22 percent of respondents supporting a vote in favor of the debt increase according to a Gallup Poll, Republicans believe they’re on firm footing with voters as they push for historically deep spending cuts…. – Politico, 7-13-11
  • Debt stalemate – who budges first?Politico Arena, 7-13-11

JULY 12, 2011: REPUBLICAN SENATE MINORITY LEADER MITCH MCCONNELL’S DEBT PLAN FOR OBAMA

“After years of discussions and months of negotiations, I have little question that as long as this president is in the Oval Office, a real solution is probably unattainable.” — Senate Republican Leader Mitch McConnell said in remarks on the Senate floor

  • McConnell’s last ditch debt ceiling plan: What’s in it for Republicans?: Senate Republican leader Mitch McConnell proposes a ‘last choice option’ that would allow President Obama to raise the national debt ceiling without GOP support.
    In a surprise move, Senate Republican leader Mitch McConnell on Tuesday proposed a “last choice option” to avoid default on the national debt that would require the support of just over a third of the House and Senate to raise the national debt ceiling.
    The McConnell proposal, which requires special legislation to be adopted, gives the president expedited procedures to increase the debt limit by as much as $2.4 trillion that require only submission of a plan to reduce spending by a greater amount. There is no requirement that Congress actually pass those spending cuts.
    But even if the cuts are never passed, the proposal has two political advantages for Republicans: It forces President Obama to lay out his proposed spending cuts in writing, a longtime GOP demand. And it absolves Republicans of responsibility for sending the nation into its first-ever default, as early as Aug. 2…. – CS Monitor, 7-12-11
  • A Pathway Out of the Debt Crisis: Political gain, not economic sense or sound policy, has always been at the core of Republican strategy on the debt-ceiling talks — a cynical ploy to appear serious about cutting spending while actually holding hostage the nation’s strong credit rating. Now that the real risks to their strategy are becoming apparent, including the possibility of cutting off Social Security checks, the more experienced members of the party are beginning to rethink their plans.
    On Tuesday, Senator Mitch McConnell, the Republican leader, proposed a convoluted fallback solution that would at least defuse the crisis his party created a few weeks ago by threatening to force the country into default on its national debts. The plan is no less cynical than the original threat, but if the House goes along, it may allow Washington, the credit markets and the American people to breathe a little easier.
    Mr. McConnell’s plan would allow President Obama to raise the debt ceiling by $2.5 trillion in three increments through the end of 2012. Congress could vote to disapprove each increment, but the president could veto its resolutions of disapproval, and the debt ceiling would then rise.
    The president would have to identify possible spending cuts equal to the debt ceiling increases, but he would get to choose the cuts, and would not have to make them before the two chambers vote. Congress would be unable to force him to make the cuts it wants, except through the regular appropriations process.
    The proposal is clearly meant to shift all the blame for raising the debt ceiling onto the president, and away from Republicans. Every Republican in Congress could proudly vote against the debt increases, but the ceiling would still go up, because there are not enough Republicans to override a veto. It’s a distinction that makes sense only in the current Washington frame of mind, but it’s a trade-off worth making to avoid either a default or radical cuts to discretionary spending and entitlement programs…. – NYT, 7-13-11
  • McConnell, Boehner blast Obama over debt talks: Just hours before another White House meeting, the top two Republicans in Congress blasted President Obama today for a debt reduction proposal they say is more specific about taxes than actual budget cuts.
    “In my view the president has presented us with three choices,” said Senate Minority Leader Mitch McConnell, R-Ky., referring to efforts to raise the $14.3 trillion debt ceiling. “Smoke and mirrors, tax hikes, or default.” “Republicans choose none of the above,” McConnell said. “I had hoped to do good; but I refuse to do harm.”
    Meanwhile, House Speaker John Boehner, R-Ohio, demanded more specifics from Obama, saying, “Where’s the president’s plan? When’s he going to lay his cards on the table?” “This debt limit increase is his problem,” Boehner said. “I think it’s time for him to lead by putting his plan on the table, something that the Congress can pass.”
    Republican and Democratic leaders are scheduled to meet with Obama at 3:45 p.m., a third straight day of negotiating…. – USA Today, 7-12-11

JULY 12, 2011: WHITE HOUSE MEETINGS CONTINUE

  • Obama says he cannot guarantee Social Security checks will go out on August 3: President Obama on Tuesday said he cannot guarantee that retirees will receive their Social Security checks August 3 if Democrats and Republicans in Washington do not reach an agreement on reducing the deficit in the coming weeks.
    “I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it,” Mr. Obama said in an interview with CBS Evening News anchor Scott Pelley, according to excerpts released by CBS News.
    The Obama administration and many economists have warned of economic catastrophe if the United States does not raise the amount it is legally allowed to borrow by August 2…. – CBS News, 7-12-11
  • Obama, lawmakers regroup to seek U.S. debt deal: President Barack Obama and congressional leaders, struggling to break an impasse over taxes and spending cuts, will regroup on Tuesday to seek common ground for a deal to avoid a looming U.S. debt default.
    Obama and top lawmakers from both political parties will hold their third meeting in as many days at the White House at 3:45 p.m. (1945 GMT) to hammer out elements of legislation to reduce the U.S. deficit and raise the debt ceiling by Aug. 2.
    The two sides remain far apart on the role of revenues in a deficit-fighting plan. The White House wants to end Bush-era tax breaks for the wealthiest Americans and close other corporate tax loopholes, boosting federal coffers even as massive government spending cuts are made…. – Reuters, 7-12-11
  • Obama urges Republicans to follow Reagan example: President Barack Obama urged Republicans to draw inspiration from the hero of fiscal conservatives, Ronald Reagan, who had agreed to revenue increases to cut the US deficit.
    “Ronald Reagan repeatedly took steps that included revenue, in order for him to accomplish some of these larger goals,” Obama told CBS in an interview.
    “And the question is if Ronald Reagan could compromise — why wouldn’t folks who idolize Ronald Reagan be willing to engage in those same kinds of compromises.”… – AFP, 7-13-11
  • McConnell Proposal Gives Obama Power to Increase Debt Limit: The Senate Republican leader, Mitch McConnell of Kentucky, said Tuesday that a bipartisan budget deal with President Obama was probably out of reach, and he proposed a plan under which the president could increase the federal debt limit without Congressional approval for offsetting spending cuts.
    Mr. McConnell’s proposal reflected a growing sense of pessimism on Capitol Hill about the prospects that Mr. Obama and Congressional leaders could come to terms on a budget deal before the government’s borrowing authority hits its limit on Aug. 2. The negotiators sat down for another round of talks at the White House on Tuesday afternoon…. – NYT, 7-12-11
  • The tea party, the debt ceiling and John Boehner’s conundrum: House Speaker John Boehner of Ohio speaks to reporters on Capitol Hill in Washington, Monday, July 11, 2011, as the debt talks continued. (AP Photo/Susan Walsh)When Republicans retook the House in the 2010 midterm elections, there were a handful of smart party strategists who cautioned that managing the majority might be more trouble than anyone thought, due to the scores of tea party-aligned members coming into Congress.
    Six months into the 112th Congress and House Speaker John Boehner (Ohio) is learning that lesson in spades, as the debt ceiling debate rages on with no signs of compromise.
    New polling from the Washington Post and Pew Research Center paints Boehner’s challenge in corralling the tea party element of the Republican conference in stark relief.
    The data suggests that those who identify as Republicans who are supportive of the tea party not only view themselves as far more educated than the average person on the current debt debate, but are also far more worried about the impact if the debt limit is increased.
    More than eight in 10 tea party supporters (81 percent) said they understand “what would happen if the government does not raise the federal debt limit” — far more than the 55 percent of all respondents who said the same thing.
    Three quarters of tea party supporters said that they were more concerned that raising the debt ceiling would “lead to higher government spending and make the national debt bigger,” while just 19 percent said they were more worried that “not raising the debt limit would force the government into default and hurt the nation’s economy.”
    That stands in stark contrast to all Americans in the poll, 47 percent of whom said raising the debt limit was a bigger concern while 42 percent said not raising it was the bigger worry…. – WaPo, 7-12-11

JULY 11, 2011: PRESIDENT OBAMA PRESS CONFERENCE ON DEBT CEILING NEGOTIATIONS

  • McConnell Offers Three-Stage Debt-Limit ‘Last Choice’ Option: Senate Republican Leader Mitch McConnell proposed a “last choice option” for increasing the U.S. debt limit in three stages in case President Barack Obama and Congress can’t agree on a deficit-reduction plan.
    McConnell’s plan would let the president raise the limit, while accompanying it with offsetting spending cuts, unless Congress struck down his plan with a two-thirds majority. The debt-ceiling increase could occur without the companion spending cuts, McConnell said.
    Don Stewart, a spokesman for McConnell, said the plan would allow Obama to raise the debt limit while putting the onus on him and congressional Democrats for any failure to cut spending. At the same time, Republicans wouldn’t have to agree to tax increases.
    The proposal is “not my first choice,” McConnell said, adding that he wanted to show the financial markets that the U.S. will not default on its debts. He said he continues to seek a broader deal to raise the $14.3 trillion debt limit with congressional Democrats and the White House. “We’re certainly not going to send a signal to the markets and the American people that default is an option,” he said…. – Bloomberg, 7-12-11
  • Debt deal: How to kill three birds with one stone: President Barack Obama and Republican leaders have been mired in a dispute over taxes as they try to avert a looming debt default, but a deal is possible that would allow both sides to declare victory.
    Republicans could live up to their promise to prevent tax increases. At the same time, Democrats could say they are raising taxes on the rich and boosting the economy.
    That could resolve the biggest remaining obstacle to a budget deal that would cover the United States’ borrowing needs through the November 2012 elections. Congress needs to act soon to ensure the Treasury can continue paying its bills beyond August 2.
    The two sides have already agreed in principle on roughly $1.5 trillion to $2 trillion in spending cuts but have repeatedly clashed over raising new tax revenue, which Democrats insist must be part of any deficit-reduction package…. – Reuters, 7-12-11
  • Obama Grasping Centrist Banner in Debt Impasse: President Obama made no apparent headway on Monday in his attempt to forge a crisis-averting budget deal, but he put on full display his effort to position himself as a pragmatic centrist willing to confront both parties and address intractable problems.
    At a news conference preceding the latest round of debt-reduction talks with Republican and Democratic Congressional leaders, Mr. Obama said he would not accept a temporary agreement to kick the problem down the road a few weeks or months.
    He said that he was willing to take the heat from his own party to move beyond entrenched ideological positions and that Republicans should do the same. And he continued to insist on “the biggest deal possible,” saying that now is the best opportunity for the nation to address its long-term fiscal challenges.
    Republicans dismissed his performance as political theater. But Mr. Obama’s remarks appeared to be aimed at independent voters as well as at Congressional leaders, and stood in contrast to the Republican focus on the party’s conservative base, both in the budget showdown and in presidential politics…. – NYT, 7-12-11
  • Boehner-Cantor rivalry affecting debt talks It’s not the first sign of friction between the two Republican leaders: The debt talks are not the first time friction has been apparent between House Speaker John A. Boehner, rear, and House Majority Leader Eric Cantor. (Win McNamee, Getty Images / July 12, 2011)
    A long-simmering rivalry between the top two Republicans in the House has tumbled into the open, with far-reaching implications for deficit-reduction negotiations with the White House.
    Speaker John A. Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) are at odds over President Obama’s call for a massive deficit-reduction package to address fiscal problems and provide for an increase in the country’s $14.3-trillion borrowing limit before an Aug. 2 deadline.
    In private talks with the White House, Boehner favored a large package as part of pragmatic political deal-making. But Cantor, speaking for staunch conservatives in Congress, is opposed.
    In a briefing Monday, Cantor downplayed the divisions, insisting repeatedly that he and the speaker were “on the same page.” But friction between the two has grown obvious, reinforcing months-old questions over who controls House Republicans.
    “I don’t think Boehner would want to serve in a foxhole anytime with Eric Cantor,” said a Republican strategist and former leadership aide who asked not to be identified while commenting on an intraparty rivalry…. – LAT, 7-12-11
  • Budget Talks Beginning to Take On a Testy Air: Even before they gathered around a long table in the Cabinet Room for another round of budget negotiations on Monday, President Obama and Republican leaders began taking shots at one another.
    Mr. Obama declared at a news conference that he would not sign a “stopgap” measure to avert a federal default, and he challenged Republicans to “eat your peas” by supporting a large deficit-reduction deal. Speaker John A. Boehner countered that Republicans would not back a package with any tax increases, and said that even agreeing to an increase in the debt limit was a big concession.
    Once the private meeting actually started, the fireworks subsided, Democratic and Republican officials briefed on the talks said, though if anything, the debate over specific policy choices served only to reinforce the chasm between the two sides. The officials described a cordial, though intense, debate in which Mr. Obama and the eight leaders from both parties delved deeply into the nitty-gritty…. – NYT, 7-12-11
  • With Boehner bailing, Cantor ascends as GOP voice: Now, it’s the Eric Cantor show. The House majority leader’s voice was heard most often in Sunday night and Monday afternoon debt-limit negotiations at the White House. It has been loud in opposition to changes in tax policy to add new revenue. And some Republicans said it sounds more in tune with the sentiment of the House GOP majority than Speaker John Boehner’s voice.
    For better or worse, Cantor owns the GOP’s spotlight in the debt-limit talks now that Boehner’s effort to fashion a groundbreaking “grand bargain” has fallen apart. It was Cantor who walked out on a commission led by Vice President Joe Biden when the topic of tax hikes was raised. And now Cantor is back in the driver’s seat because the talks have turned away from the big-dollar package that President Barack Obama and Boehner were negotiating and toward a smaller framework of spending cuts produced by the Biden talks.
    At a White House meeting on Monday, Cantor used color-coded spreadsheets to explain to the president and congressional leaders where he believes agreements on spending cuts had been reached by the Biden group.
    Boehner’s failed negotiations with Obama have given more stock to Cantor’s read about where the votes lie for a debt-limit deal, which, for the moment at least, is focused on the $1 trillion to $2 trillion in cuts identified by the Biden group.
    “It looks like he’s maybe listening to the rank and file a little bit more closely,” Rep. Raul Labrador, an Idaho Republican with strong tea party credentials, told POLITICO’s Arena on Monday. “He understands what the rank and file want.”… – Politico, 7-11-11
  • Obama, Republicans trapped by inflexible rhetoric: President Barack Obama and GOP lawmakers, hundreds of billions of dollars short of their goal and seemingly trapped in inflexible bargaining positions, are struggling for agreement on $2 trillion-plus in budget cuts as the price for maintaining the government’s ability to borrow.
    Lawmakers were asked to return to the White House for talks Tuesday afternoon after a 90-minute Monday session produced no progress other than to identify the size of the gap between Republicans and Obama. Neither side showed any give that might generate hopes for a speedy agreement. Instead, Republicans again took a firm stand against revenue increases while Obama and his Democratic allies insisted that they be part of any equation that cuts programs like Medicare. “I do not see a path to a deal if they don’t budge, period,” Obama said.
    At the same time, the president turned up the pressure by announcing he won’t sign any short-term debt limit increases. “We are going to get this done,” Obama insisted during a news conference…. – AP, 7-11-11
  • Boehner: Debt Ceiling Increase Obama’s Problem: House Speaker John Boehner is turning up the heat on President Obama, calling the debt-ceiling increase “his problem” and putting the onus on him to present a deficit-reduction plan that can pass Congress.
    Republicans in both chambers had tough words for the administration ahead of another White House sit-down Tuesday afternoon. On the Senate floor, GOP Leader Mitch McConnell accused the president and his party of “deliberate deception.”
    The comments may reflect increasing pressure from rank-and-file Republicans to press for deeper spending cuts and not cave in to the administration’s call for tax hikes.
    “The House Republicans have a plan. We passed our budget back in the spring, outlined our priorities. Where’s the president’s plan? When’s he going to lay his cards on the table?” Boehner said. “This debt limit increase is his problem and I think it’s time for him to lead by putting his plan on the table, something that the Congress can pass.”… – Fox News, 7-12-11
  • Obama Takes Centrist Banner in Impasse Over Deficit: President Obama made no apparent headway on Monday in his attempt to forge a crisis-averting budget deal, but he put on full display his effort to position himself as a pragmatic centrist willing to confront both parties and address intractable problems.
    At a news conference preceding the latest round of debt-reduction talks with Republican and Democratic Congressional leaders, Mr. Obama said he would not accept a temporary agreement to kick the problem down the road a few weeks or months.
    He said that he was willing to take the heat from his own party to move beyond entrenched ideological positions and that Republicans should do the same. And he continued to insist on “the biggest deal possible,” saying that now is the best opportunity for the nation to address its long-term fiscal challenges.
    Republicans dismissed his performance as political theater. But Mr. Obama’s remarks appeared to be aimed at independent voters as well as at Congressional leaders, and stood in contrast to the Republican focus on the party’s conservative base, both in the budget showdown and in presidential politics.
    Mr. Obama’s remarks were among the clearest expressions yet of a repositioning effort that has been under way since the midterm elections last November, when Republicans captured the House and made inroads in the Senate.
    Seeking to shed the image of big-government liberal that Republicans used effectively against him last year, he has made or offered policy compromises on an array of issues and cast himself in the role of the adult referee for both parties’ gamesmanship, or the parent of stubborn children.
    “If we think it’s hard now, imagine how these guys are going to be thinking six months from now in the middle of election season where they’re all up,” he said. “It’s not going to get easier. It’s going to get harder. So we might as well do it now — pull off the Band-Aid, eat our peas.” He added, “We keep on talking about this stuff, and we have these high-minded pronouncements about how we’ve got to get control of the deficit and how we owe it to our children and our grandchildren. Well, let’s step up. Let’s do it. I’m prepared to do it. I’m prepared to take on significant heat from my party to get something done. And I expect the other side should be willing to do the same thing.”
    Mr. Obama did not shake Republicans’ resolve to oppose any increases in taxes for wealthy Americans and businesses, as he proposes. “Eat our peas?” asked a mocking news release from the office of Speaker John A. Boehner, Republican of Ohio, placing the blaming for the impasse on Mr. Obama for demanding “job crushing tax hikes.”… – NYT, 7-12-11
  • Boehner-Cantor rivalry affecting debt talks It’s not the first sign of friction between the two Republican leaders: A long-simmering rivalry between the top two Republicans in the House has tumbled into the open, with far-reaching implications for deficit-reduction negotiations with the White House.
    Speaker John A. Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) are at odds over President Obama’s call for a massive deficit-reduction package to address fiscal problems and provide for an increase in the country’s $14.3-trillion borrowing limit before an Aug. 2 deadline.
    In private talks with the White House, Boehner favored a large package as part of pragmatic political deal-making. But Cantor, speaking for staunch conservatives in Congress, is opposed.
    In a briefing Monday, Cantor downplayed the divisions, insisting repeatedly that he and the speaker were “on the same page.” But friction between the two has grown obvious, reinforcing months-old questions over who controls House Republicans.
    “I don’t think Boehner would want to serve in a foxhole anytime with Eric Cantor,” said a Republican strategist and former leadership aide who asked not to be identified while commenting on an intraparty rivalry…. – LAT, 7-12-11
  • Budget Talks Beginning to Take On a Testy Air: Even before they gathered around a long table in the Cabinet Room for another round of budget negotiations on Monday, President Obama and Republican leaders began taking shots at one another.
    Mr. Obama declared at a news conference that he would not sign a “stopgap” measure to avert a federal default, and he challenged Republicans to “eat your peas” by supporting a large deficit-reduction deal. Speaker John A. Boehner countered that Republicans would not back a package with any tax increases, and said that even agreeing to an increase in the debt limit was a big concession.
    Once the private meeting actually started, the fireworks subsided, Democratic and Republican officials briefed on the talks said, though if anything, the debate over specific policy choices served only to reinforce the chasm between the two sides. The officials described a cordial, though intense, debate in which Mr. Obama and the eight leaders from both parties delved deeply into the nitty-gritty.
    Mr. Obama, after restating his pitch for a far-reaching deal that could produce savings of $4 trillion or so over a decade, turned the floor over to the House majority leader, Representative Eric Cantor of Virginia. Mr. Cantor, Democratic officials said, presented a Republican proposal for a more modest agreement that drew heavily on earlier negotiations steered by Vice President Joseph R. Biden Jr…. – NYT, 7-12-11
  • Delayed payments in 1979 offer glimpse of default consequences: In fact, there was one short-lived incident in the spring of 1979 that offers a glimpse of some of the problems and costs that might arise if the stalemate on Capitol Hill continues. Then, as now, Congress had been playing a game of chicken with the debt limit, raising it to $830 billion – compared with today’s $14.3 trillion – only after Treasury Secretary W. Michael Blumenthal warned that the country was hours away from the first default in its history…. – WaPo, 7-11-11
  • David Frum: U.S. conservatives in denial over impact of debt default: The U.S. government is the largest purchaser of goods and services on planet Earth.
    The government buys everything from equipment for cancer research to metal for warships to toothpicks for federal cafeterias. Suppose the government had to cut 44% from its budget on two weeks notice? How sharp a shock would that be to the world economy?
    Here’s a comparative. In the worst quarter of 2009, American consumers cut their spending by … not 44%, not even 4.4%, but 1.2%. That 1.2% drop in consumer spending helped tumble the economy into the worst collapse since the 1930s.
    The U.S. consumer sector is even larger than the federal government sector. But it’s not unimaginably larger. U.S. consumers spend about $10 trillion a year. The federal government spends about $3.4 trillion.
    If a cut of 1.2% from $10 trillion was an economic shock, a cut of 44% from $3.4 trillion will be a much, much, much bigger shock.
    Yet a huge portion of conservative punditry this week amounts to a sustained denial of this seemingly self-evident arithmetic fact…. – National Post, 7-12-11Eric Cantor: We don’t believe you ought to be raising taxes right now, in this economy, and they do. That is the difference. If the President wants the debt ceiling raised, the House will not raise taxes. That is just what it is.John Boehner: “The president continues to insist on raising taxes, and [Democrats] are just not serious enough about fundamental entitlement reform to solve the problem. It takes two to tango, and they’re not there yet.” — Boehner says Dems not willing to make debt deal: Republican House Speaker says debt ceiling must be raised, but Democrats must get “serious” about entitlement reform, no tax hikes…. -
  • CBS News, 7-11-11Obama rules out short-term deal on debt ceiling: President Obama said Monday that he would not consider stopgap measures to temporarily avert the debt-ceiling crisis, saying “that is just not an acceptable approach.”
    Obama spoke after Republicans rejected a deficit-reduction framework that would raise taxes and cut entitlements. “I continue to push congressional leaders for the largest possible deal,” Obama said at a White House news conference. He added, “I will not sign” a short-term extension.
    “This is the United States of America. We don’t manage our affairs in three-month increments. We don’t risk default on our obligations because we can’t put politics aside.” — Barack Obama
  • Obama: Time to “eat our peas” and pass debt deal: President Obama is still seeking the largest deficit reduction deal possible as part of a package deal to raise the debt ceiling, he said in a press conference today.
    “I continue to push congressional leaders for the largest possible deal,” he said from the White House. “It is possible for us to construct a package that would be balanced, share sacrifice [and] would involve both parties taking on their sacred cows.”
    Mr. Obama would not even entertain the notion of failing to get a deal done before the end of the month. “We are going to get this done by August 2,” he said.
    Mr. Obama said today that he appreciated Boehner’s efforts to try to reach a large deal with him, but that the rest of the GOP must now step up to the plate.
    “I’ve been hearing from my Republican friends for some time it is a moral imperative to tackle our debt and deficits in a serious way,” Mr. Obama said. “What I’ve said to them is, let’s go.”
    The president said today he would not accept a smaller, short-term deal. “We might as well do it now,” he said. “Pull off the band aid. Eat our peas.”… – CBS News, 7-11-11
  • At news conference, Obama portrays himself as compromiser-in-chief: President Obama says he will not sign a three to six-month bill to raise the nation’s debt ceiling and instead is calling on Republicans to set aside stubborn politics and agree on a long-term compromise before the country hits the debt limit Aug. 2.
    His administration is not making contingency plans for the event that Congress won’t vote to raise the debt ceiling in time, Obama told reporters this morning, predicting in a morning press conference that “we are going to get this done” before the deadline.
    As leaders prepared for an afternoon meeting at the White House, Obama pledged to bring Republicans and Democrats together “every single day” until they work out an agreement to avert a credit default with an agreement on debt and deficit reduction.
    Republicans have been saying for months that it’s a “moral imperative” for the president and Congress to tackle debts and deficits, Obama said, arguing that he has moved toward their position in hopes of working out a compromise.
    “What I’ve said to them is, ‘Let’s go,’” Obama said in a morning press conference in the White House briefing room. Such a deal would let Americans knows “this town can actually do something once in a while.”… – LAT, 7-11-11
  • Obama Presses GOP for Big Deficit Deal: President Barack Obama on Monday said he won’t support a short-term deficit-cutting deal and continued to press for a more ambitious agreement involving taxes after a Sunday evening summit with congressional leaders failed to produce a deal.
    Mr. Obama, speaking at a televised news conference, said the American people feel a sense of urgency on the deficit talks and want results.
    The president insisted he wouldn’t support a short-term deal to raise the U.S. borrowing limit. “We don’t manage our affairs in three-month increments,” he said.
    Mr. Obama, speaking ahead of another negotiating session scheduled for 2 p.m. EDT Monday, said both sides have to move off their starting positions. “If not now, when?” He said later, it’s time to “pull off the Band Aid.”
    The main sticking points remain taxes and cuts to entitlement programs. Mr. Obama and Democrats are still pushing for a grand bargain that would slash about $4 trillion from the deficit over about 10 years. Republicans say such a package isn’t palatable because it includes tax increases that rank-and-file members won’t stomach.
    “I have bent over backwards to try to work with Republicans” on taxes, Mr. Obama said. He said he doesn’t favor tax increases, but wants to end a series of loopholes for oil and gas companies and the wealthy. Republicans have said ending tax subsidies and tax breaks amounts to tax increases. He said he is also willing to overhaul the tax code so long as it is “sufficiently progressive.”… – WSJ, 7-11-11
  • Obama presses ahead with debt talks, warns against stopgap solution: President Obama, facing a bitter partisan stalemate over how to raise the federal borrowing limit, summoned congressional leaders to a new round of White House talks Monday and warned that he would not accept a temporary, stopgap measure.
    “That is not an acceptable approach,” he told a news conference ahead of the scheduled talks. “So we might as well do it now. Pull off the Band-Aid. Eat our peas. Now is the time to do it. If not now, when?”… – WaPo, 7-11-11
  • Obama, leaders take last stab at $4 trillion deal: President Obama refused to back down Sunday night from seeking a landmark compromise that would slash about $4 trillion over 10 years from budget deficits and raise the government’s $14.3 trillion debt limit.
    President Obama meets with House Speaker John Boehner and Senate Majority Leader Harry Reid to negotiate the national debt.
    In a rare weekend meeting at the White House, Obama sought to convince recalcitrant lawmakers that tax increases on upper-income Americans and major cuts in popular health care and retirement programs still were within reach — despite Republicans’ pessimism. He will reiterate his case in a news conference this morning.
    Obama’s pitch didn’t convince congressional leaders. Senate GOP leader Mitch McConnell said Obama’s insistence on ending tax cuts for couples with income above $250,000 was a non-starter. House Democratic leader Nancy Pelosi raised doubts about proposed cuts to Medicare, Medicaid and Social Security.
    If Obama’s last-ditch effort fails, negotiators still could seek about $2.4 trillion in deficit reduction and an equal increase in the debt limit, enough to get them past the 2012 elections. They had agreed on about two-thirds of that amount in June when Republicans balked at new taxes and walked out.
    With three weeks left before the government can no longer borrow money, reaching even that lower threshold will be difficult, Treasury Secretary Timothy Geithner acknowledged Sunday…. – USA, 7-10-11
  • Obama set for debt negotiations all week – official: President Barack Obama told top U.S. lawmakers on Sunday to be prepared to meet every day this week to hash out a deal to cut the federal budget and raise the debt limit, a Democratic source with knowledge of the talks said.
    The Democratic official said that Obama pressed Republicans at a White House meeting to aim for a broad, $4 trillion deficit-reduction package rather than a more modest one…. – Reuters, 7-11-11
  • Debt Ceiling Negotiations Enter Round 3: The debt and deficit negotiations are now aimed at accomplishing two goals. The first goal for all sides sitting around the table is to get a deal in place by Aug. 2 to avoid any negative impact on the economy. The second goal, which is being pursued concurrently, is to emerge from the talks as the political winner. The latter clearly complicates the former.
    The eight Republican and Democratic congressional leaders will be back in the Cabinet Room in the White House Monday afternoon with President Obama and Vice President Joe Biden for their third such meeting over the last five days.
    The president continues to apply pressure on House Speaker John Boehner and his fellow Republicans by pushing for a “grand bargain” that includes entitlement reforms many in his own party oppose. With the president willing to put Medicare, Medicaid and Social Security on the chopping block, it begs the question of where Rep. Boehner is willing to compromise.
    But math is a stubborn thing. Boehner clearly came to the conclusion this weekend that he simply cannot pass a deal through his conference that includes any tax increases…. – PBS Newshour, 7-11-11
  • US debt talks: ‘trust gap’ between negotiators, rank and file in Congress: Details of the US debt and deficit talks have been mostly secret, fueling concerns on both sides of the aisle that their leaders will compromise party values or give away too much…. – CS Monitor, 7-11-11

JULY 10, 2011: CONGRESSIONAL LEADERS MEET AGAIN AT WHITE HOUSE

“Congress has to act. If they don’t act, then we face catastrophic damage to the American economy, and the leadership, to their credit, and I mean Republicans and Democrats, fully understand that.” — Treasury Secretary Timothy F. Geithner said on the CBS News program “Face the Nation.”

“I disagree with that. I can tell you the president is determined to keep us there and make certain that we’re focused on the fact the decisions we make in that room will affect families across America and decide if this economy is going to recover. If we falter, if we don’t have sufficient political courage and will to get this done and this economy is going to be hurt then it is going to fall on our shoulders.” — Senate Majority Whip Dick Durbin, D-Ill.

“It’s disappointing that the president is unable to bring his own party around to the entitlement reform that he put on the table. And it’s baffling that the president and his party continue to insist on massive tax hikes in the middle of a jobs crisis while refusing to take significant action on spending reductions at a time of record deficits.” — Senate Minority Leader Mitch McConnell spokesman Don Stewart after Sunday evening’s White House meeting

  • Obama, GOP back to where they started: The debt ceiling: It started with a simple objective: Raise the $14.3 trillion debt ceiling. Then the Republicans began demanding big budget cuts in exchange for increasing the debt ceiling. Then the Democrats began demanding higher taxes for wealthy in order to close the debt down the line.
    Now — given bleak prospects for a big deal involving all those elements, the so-called “grand bargain” — President Obama and the Republicans are back to where the started, trying to put together a new deal to raise the debt ceiling. Except that now they’re even closer to a government default on its existing debts…. – USA Today, 7-11-11
  • Obama: ‘We need to’ work out debt deal in 10 days: Grasping for a deal on the nation’s debt, President Barack Obama and congressional leaders remained divided Sunday over the size and the components of a plan to reduce long term deficits. Saying “we need to” work out an agreement over the next 10 days, the president and lawmakers agreed to meet again Monday.
    Obama also sought to use the power of his office to sway public opinion, scheduling a news conference for Monday morning, his second one in less than two weeks devoted primarily to the debt talks.
    Officials familiar with the meeting said Obama pressed the eight House and Senate leaders Sunday evening to continue aiming for a massive $4 trillion deal for reducing the debt.
    But there appeared to be little appetite for such an ambitious plan and the political price it would require to pass in Congress. Instead, House Speaker John Boehner told the group that a smaller package of about $2 trillion to $2.4 trillion was more realistic…. – AP, 7-11-11
  • With Debt Talks Stalled, What Happens Now?: According to various reports, both President Obama and Speaker of the House John Boehner were willing to go bold. A $4 trillion debt-reduction package, one that would include about $1 trillion in new revenue (tax increases) over ten years, was being discussed by the end of last week. But the House GOP revolted over the taxes, and Boehner, a reasonable person made powerless in the face of his no-compromise caucus, backed away from a grand bargain. So where does that leave us?
    July 22 has been previously identified as the latest a deal can be reached in order to give Congress enough time to write the law, vet it, and pass it, so time is of the essence. Obama will hold another press conference today to make his case to the media and the public as a way to pressure the GOP, after which another meeting will be held with congressional leaders of both parties. Republicans want a deal based on the $2 trillion to $2.4 trillion in spending cuts previously identified by the talks overseen by Joe Biden. But Chris Van Hollen, a top House Democrat, said only $1 trillion in cuts had been identified, and Republicans were “dreaming” if they thought the number was $2.4 trillion…. – NY Magazine, 7-11-11“We came into this weekend with the prospect that we could achieve a grand bargain. We are still hopeful for a large bipartisan agreement.” — House Minority Leader Nancy Pelosi
  • Debt reduction talks in limbo as clock ticks toward Aug. 2 deadline: Talks among President Obama and congressional leaders Sunday evening failed to break a partisan stalemate over how to raise the federal borrowing limit, leaving the politically charged negotiations in limbo three weeks before the administration says the country will begin to default.
    The White House meeting adjourned after roughly 75 minutes without agreement over how far the parties should go in cutting the deficit over the next decade or whether tax cuts and entitlement reductions should be a part of any deal. Congressional leaders will return to the White House on Monday to continue talks, administration officials announced, and Obama will hold a morning news conference before they do.
    Both sides appeared Sunday to dig further into their positions, leaving the talks deadlocked, a historic default looming and a fragile economy increasingly vulnerable to the consequences of Washington’s entrenched partisanship and ideological divide over taxes and entitlements…. – WaPo, 7-10-11
  • Geithner: We want ‘biggest deal possible’ on debt: Treasury Secretary Timothy Geithner says the Obama administration wants to seek “the biggest deal possible” on debt reduction…. – AP, 7-10-11
  • For Boehner, Lofty Budget Goals Checked by Reality: At a private meeting about deficit reduction at the White House last week, Speaker John A. Boehner told his fellow Congressional leaders and President Obama that he did not spend 20 years working his way up to the top job on Capitol Hill just for the cachet of the title — he wanted to accomplish something big.
    So he and the president pursued an ambitious plan that would have reduced spending by as much as $4 trillion over 10 years. It was a transformative proposal, with the potential to improve the ugly deficit picture by shrinking the size of government, overhauling the tax code and instituting consensus changes to shore up Medicare and even Social Security. It was a once-in-a-decade opening.
    But the speaker’s lofty ambitions quickly crashed into the political reality of a divided, highly partisan Congress. His decision on Saturday night to abandon the comprehensive deficit-reduction package, citing the White House’s insistence on tax increases, was a sharp reversal. It highlighted the challenge he faces in persuading his party to tolerate any compromise on government spending and exposed the fissures within his own leadership team over how to proceed…. – NYT, 7-10-11
  • Obama Leans on G.O.P. for a Deal on Debt Ceiling: President Obama tried on Sunday to revive the chances for a sweeping budget agreement to reduce the nation’s deficit and repair its perilous finances, but Congressional Republicans continued to balk, insisting on a more modest deal to avert a default on the national debt.
    Mr. Obama, meeting with leaders from both parties at the White House, bluntly challenged Republicans a day after Speaker John A. Boehner pulled back from a far-reaching agreement aimed at saving as much as $4 trillion over 10 years, officials briefed on the negotiations said. The meeting ended after an hour and 15 minutes with little progress, but the two sides agreed to resume talking Monday, and every day after that, until a deal is done.
    White House officials said Mr. Obama was still determined to pursue the boldest package possible — one that would require new tax revenue as well as cuts in Medicare and other entitlement programs — but he faces steadfast opposition from Republicans and growing qualms among Democrats…. – NYT, 7-10-11
  • John Boehner’s ‘grand bargain’ – with House GOP: Speaker John Boehner’s decision not to “go big” on a debt-limit deal is the starkest demonstration yet of the limits of the Ohio Republican’s power.
    The internal GOP backlash against his efforts to secure a package of $4 trillion in spending cuts and revenue-raisers revealed that Boehner sometimes is little more than the first among equals — capable of synthesizing Republican sentiments but unwilling to drive them.
    Tax hikes, by any name, are a nonstarter for a party that forged its brand on the mantra of lower taxes and less government, and Boehner’s willingness to talk rates with President Barack Obama — particularly in the context of House Majority Leader Eric Cantor’s (R-Va.) refusal to do so — raised eyebrows within his conference. The uproar among Republicans, on and off Capitol Hill, forced Boehner to back away from the “grand bargain,” setting up a testy White House meeting where little was accomplished Sunday night…. – Politico, 7-11-11
  • House, Senate leaders meet Sunday on debt talks: A group of top House and Senate leaders meet Sunday at the White House, a day after Republican negotiators abandoned plans to pursue a massive $4 trillion deficit reduction package in the face of stiff party opposition to any plan with tax increases as part of the deal.
    A deficit reduction deal is crucial to win Republican support for an increase in the nation’s debt ceiling. The government’s borrowing capacity is currently capped at $14.3 trillion and administration officials say it will go into default without action by Aug. 2. The Treasury Department says economic chaos could ensue if it can’t borrow more money.
    Both parties are under pressure from voters to resolve the debt crisis ahead of next year’s congressional and presidential elections. Obama is seen as a candidate that is tough to beat, though voters’ fears over the economy have been dragging down his numbers.
    Eight of the top House and Senate leaders were scheduled to meet at the White House in a negotiating session Sunday evening and lay out their remaining differences…. – AP, 7-10-11
  • Obama, lawmakers to meet again as debt clock ticks: With pressuring continuing to build but no breakthroughs in sight, budget bargaining between President Barack Obama and top lawmakers resumes Monday at the White House, with both sides hoping to slash the deficit as the price for permitting the government to borrow more than $2 trillion to pay its bills.
    In a rare Sunday meeting in the White House Cabinet Room, Obama continued to push for a “grand bargain” in the range of $4 trillion worth of deficit cuts over the coming decade, but momentum is clearly on the side of a smaller measure of perhaps half that size. Obama continues to press for revenue increases as part of any agreement but Republicans remain stoutly opposed — despite some private hints to the contrary last week by House Speaker John Boehner, R-Ohio.
    Obama holds a news conference Monday morning. The third White House meeting since Thursday is slated for the afternoon…. – ap, 7-10-11
  • Ross Douthat: The Method to Their Madness: The Republican Party’s strategy in the debt-ceiling negotiations has baffled centrists and vindicated liberals. For months, the party’s leaders have repeatedly turned down deals that would cut spending significantly because their members won’t compromise on taxes. To moderates, this intransigence is inexplicable: Are they crazy? To the left, it’s all-too-predictable: See, we told you they were crazy!
    But there is a method to the Republicans’ madness, and it rests on four things they know (or at least sense) about the deficit debate that the rest of the political class often ignores.
    Barack Obama wants a right-leaning deficit deal. For months, liberals have expressed frustration with the president’s deficit strategy. The White House made no effort to tie a debt ceiling vote to the extension of the Bush tax cuts last December. It pre-emptively conceded that any increase in the ceiling should be accompanied by spending cuts. And every time Republicans dug in their heels, the administration gave ground…. – NYT, 7-10-11
  • Bruce Bartlett: Five myths about the debt ceiling: In recent months, the federal debt ceiling — last increased in February 2010 and now standing at $14.3 trillion — has become a matter of national debate and political hysteria. The ceiling must be raised by Aug. 2, Treasury says, or the government will run out of cash. Congressional Republicans counter that they won’t raise the debt limit unless Democrats agree to large budget cuts with no tax increases. President Obama insists that closing tax loopholes must be part of the package. Whom and what to believe in the great debt-limit debate? Here are some misconceptions that get to the heart of the battle….

    1. The debt limit is an effective way to control spending and deficits.
    2. Opposition to raising the debt limit is a partisan issue.
    3. Financial markets won’t care much if interest payments are just a few days late — a “technical default.”
    4. It’s worth risking default on the debt to prevent a tax increase, given the weak economy.
    5. Obama must accept GOP budget demands because he needs Republican support to raise the debt limit….

    - WaPo, 7-7-11

JULY 9, 2011: HOUSE SPEAKER JOHN BOEHNER ABANDONS COMPREHENSIVE DEBT DEAL

Boehner abandons efforts to reach comprehensive debt-reduction deal: House Speaker John A. Boehner (R-Ohio) abandoned efforts Saturday night to reach a comprehesive debt-reduction deal, telling President Obama that a mid-size package was the only politically possible alternative to avoid a first-ever default on the nation’s mounting national debt.

“Despite good faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure.” — John Boehner

“Both parties have made real progress thus far, and to back off now will not only fail to solve our fiscal challenge, it will confirm the cynicism people have about politics in Washington. The president believes that now is the moment to rise above that cynicism and show the American people that we can still do big things. And so tomorrow, he will make the case to Congressional leaders that we must reject the politics of least resistance and take on this critical challenge.” — Dan Pfeiffer, the White House communications director, White House Statement

  • Boehner abandons goal of $4 trillion debt-reduction package: House Speaker John Boehner, Republican of Ohio, abandoned efforts last night to reach a comprehensive debt-reduction deal worth more than $4 trillion in savings, telling President Obama that a midsize package was the only politically possible alternative to avoid a first-ever default on the nation’s mounting national debt.
    Boehner told Obama – who is hosting a key meeting tonight on the debt issue – that their efforts to “go big,’’ as the speaker says, were stymied by the toughest issues: taxes and entitlements.
    Democrats continued to insist on tax changes that would not pass muster in the conservative-dominated House, and Republicans wanted cuts to programs such as Medicare and Social Security that Obama and Senate Democrats would oppose.
    “Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase,” Boehner said…. – Boston Globe, 7-9-11
  • Deficit Talks Scaled Back Over Tax Increases: Citing differences over tax revenues, House Speaker John A. Boehner said on Saturday night that he would pull back from joint efforts with President Obama to reach a sweeping $4 trillion deficit-reduction plan tied to a proposal to increase the federal debt limit.
    On the eve of a second round of high-level bipartisan talks set for Sunday, Mr. Boehner issued a statement saying he would now urge negotiators to instead focus on crafting a smaller package more in line with the $2 trillion to $3 trillion in spending cuts and revenue increases negotiated earlier by Vice President Joseph R. Biden Jr.
    “Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes,” Mr. Boehner said. “I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase.”
    The decision was a major reversal for Mr. Boehner, a veteran Congressional deal-maker who along with Mr. Obama had been the major advocate for seeking a far-reaching deal that would have combined a debt limit increase with substantial spending cuts, significant changes in social programs like Medicare, Medicaid and perhaps Social Security, and as much as $1 trillion in new revenues. Following a secret meeting between the two last weekend, Mr. Obama went public with his own call for a broad package…. – NYT, 7-9-11
  • Social Security: the political monster that lurks in debt talks: Long the “third rail” of politics, Social Security has emerged as a part of bipartisan talks aimed at stabilizing America’s public debt. Will it finally be restructured to reflect today’s economy?… – CS Monitor, 7-9-11

JULY 8, 2011: 1ST CONGRESSIONAL LEADERS WHITE HOUSE MEETING

  • Debt Deal Could Rewrite 2012 Political Calculus: Are the far right and far left in Washington about to be thrown under the bus? The assumption for months has been that Democrats would play to their base during the 2012 election cycle, using the specter of tax cuts for the rich and Medicare cuts to rally liberals behind President Obama and Democratic candidates.
    On the right, it seemed certain that Republican presidential hopefuls and Congressional candidates would pander to the Tea Party wing of their party with demands for ever greater spending cuts and “read my lips” declarations when it comes to the idea of higher taxes.
    But what if Mr. Obama and House Speaker John A. Boehner turn that political calculation on its head?
    Negotiations over the nation’s deficit and debt suggest that both men are looking beyond the wishes of their most ardent supporters toward the larger, more moderate parts of the electorate. What could emerge in the next few days is a package that infuriates the right by raising the debt ceiling, disappoints the left by cutting Medicare, and gets passed largely by politicians who are willing to compromise…. – NYT, 7-8-11Remarks by the President on the Status of Efforts to Find a Balanced Approach to Deficit Reduction James S. Brady Press Briefing Room: 1:02 P.M. EDT

    THE PRESIDENT: Hello, everybody. I’m going to make a very brief statement.
    I just completed a meeting with all the congressional leaders from both chambers, from both parties, and I have to say that I thought it was a very constructive meeting. People were frank. We discussed the various options available to us. Everybody reconfirmed the importance of completing our work and raising the debt limit ceiling so that the full faith and credit of the United States of America is not impaired.
    What we decided was that staffs, as well as leadership, will be working during the weekend, and that I will reconvene congressional leaders here on Sunday with the expectation that, at that point, the parties will at least know where each other’s bottom lines are and will hopefully be in a position to then start engaging in the hard bargaining that’s necessary to get a deal done.
    I want to emphasize that nothing is agreed to until everything is agreed to. And the parties are still far apart on a wide range of issues. But, again, I thought that all the leaders here came in a spirit of compromise, in a spirit of wanting to solve problems on behalf of the American people. Everybody acknowledged that the issue of our debt and our deficit is something that needs to be tackled now. Everybody acknowledged that in order to do that, Democrats and Republicans are going to be required in each chamber. Everybody acknowledged that we have to get this done before the hard deadline of August 2nd to make sure that America does not default for the first time on its obligations. And everybody acknowledged that there’s going to be pain involved politically on all sides, but our biggest obligation is to make sure that we’re doing the right thing by the American people, creating an environment in which we can grow the economy and make sure that more and more people are being put back to work.
    So I want to thank all the leaders. I thought it was a very constructive meeting. And I will be seeing them back here on Sunday. A lot of work will be done between now and then.

    END 1:05 P.M. EDT — WH, 7-11-11

JULY 5, 2011: OBAMA’S SUMMONS CONGRESS

John Boehner: “I’m pleased the president stated today that we need to address the big, long-term challenges facing our country.”

  • Obama Summons G.O.P. and Democratic Leaders for Deficit Reduction Talks: President Obama stepped up pressure on Congressional Republicans on Tuesday to agree to a broad deficit-cutting deal, pledging to put popular entitlement programs like Medicare on the table in return for Republican acquiescence to some higher taxes. In the Senate, Jeff Sessions, Republican of Alabama, spoke to other members of the Senate Budget Committee.
    Mr. Obama, who met secretly with Speaker John A. Boehner at the White House on Sunday to try to advance the talks, called House and Senate leaders from both parties to the White House for further negotiations on Thursday. And he rejected talk of an interim deal that would get the government past a looming deadline on raising the federal debt limit without settling some of the longer-term issues contributing to the government’s fiscal imbalances.
    “We’ve got a unique opportunity to do something big, to tackle our deficit in a way that forces our government to live within its means,” he said in an appearance in the White House briefing room, casting himself as much an honest broker as a partisan participant in the talks. “This will require both parties to get out of our comfort zones, and both parties to agree on real compromise.”… – NYT, 7-6-11
  • Can President Obama just ignore the debt limit?: Some economists suggest that the 14th Amendment renders the debt limit conversation moot (and maybe unconstitutional): the US must pay its debts. Period…. – CS Monitor, 7-5-11
  • Can President Obama jump-start debt talks?: President Obama has invited congressional leaders to the White House Thursday to try to resolve the stalemate over raising the debt limit. The deadline for a deal is Aug. 2…. – CS Monitor, 7-5-11
  • Summoning lawmakers, Obama seeks to break debt impasse: The president will meet with House and Senate leaders of both parties to try to end a standoff on raising the national debt limit…. – LAT, 7-5-11Remarks by the President on the Status of Efforts to Find a Balanced Approach to Deficit Reduction: James S. Brady Press Briefing Room
    4:49 P.M. EDT

    THE PRESIDENT: All right. Hello, everybody. I just wanted to give you an update on the deficit negotiations that we’ve been having for the last several weeks, and I want to wish, again, everybody a Happy Fourth of July.
    Over the July Fourth weekend, my team and I had a series of discussions with congressional leaders in both parties. We’ve made progress, and I believe that greater progress is within sight, but I don’t want to fool anybody — we still have to work through some real differences.
    Now, I’ve heard reports that there may be some in Congress who want to do just enough to make sure that America avoids defaulting on our debt in the short term, but then wants to kick the can down the road when it comes to solving the larger problem of our deficit. I don’t share that view. I don’t think the American people sent us here to avoid tough problems. That’s, in fact, what drives them nuts about Washington, when both parties simply take the path of least resistance. And I don’t want to do that here.
    I believe that right now we’ve got a unique opportunity to do something big — to tackle our deficit in a way that forces our government to live within its means, that puts our economy on a stronger footing for the future, and still allows us to invest in that future.
    Most of us already agree that to truly solve our deficit problem, we need to find trillions in savings over the next decade, and significantly more in the decades that follow. That’s what the bipartisan fiscal commission said, that’s the amount that I put forward in the framework I announced a few months ago, and that’s around the same amount that Republicans have put forward in their own plans. And that’s the kind of substantial progress that we should be aiming for here.
    To get there, I believe we need a balanced approach. We need to take on spending in domestic programs, in defense programs, in entitlement programs, and we need to take on spending in the tax code — spending on certain tax breaks and deductions for the wealthiest of Americans. This will require both parties to get out of our comfort zones, and both parties to agree on real compromise.
    I’m ready to do that. I believe there are enough people in each party that are willing to do that. What I know is that we need to come together over the next two weeks to reach a deal that reduces the deficit and upholds the full faith and credit of the United States government and the credit of the American people.
    That’s why, even as we continue discussions today and tomorrow, I’ve asked leaders of both parties and both houses of Congress to come here to the White House on Thursday so we can build on the work that’s already been done and drive towards a final agreement. It’s my hope that everybody is going to leave their ultimatums at the door, that we’ll all leave our political rhetoric at the door, and that we’re going to do what’s best for our economy and do what’s best for our people.
    And I want to emphasize — I said this at my press conference — this should not come down to the last second. I think it’s important for us to show the American people and their leaders that we can find common ground and solve our problems in a responsible way. We know that it’s going to require tough decisions. I think it’s better for us to take those tough decisions sooner rather than later.
    That’s what the American people expect of us. That’s what a healthy economy is going to require. That’s the kind of progress that I expect to make. So I promise I will keep you guys updated as time goes on. All right?
    Q A couple of questions?
    Q Will you take any questions, Mr. President?
    THE PRESIDENT: I guarantee you, Jay is going to take a whole bunch of them. (Laughter.)

    END 4:54 P.M. EDT

    In debt talks, Obama offers Social Security cuts: President Obama is for the first time offering to tackle the rising cost of Social Security as part of a far-reaching plan to restrain the spiraling national debt, according to people in both parties familiar with the proposal.
    The move marks a major shift for the White House and could present a direct challenge to Democratic lawmakers who have vowed to protect health and retirement benefits from a Republican assault on government spending.

  • President Looks for Broader Deal on Deficit Cuts: Heading into a crucial negotiating session on a budget deal on Thursday, President Obama has raised his sights and wants to strike a far-reaching agreement on cutting the federal deficit as Speaker John A. Boehner has signaled new willingness to bargain on revenues.
    Mr. Obama, who is to meet at the White House with the bipartisan leadership of Congress in an effort to work out an agreement to raise the federal debt limit, wants to move well beyond the $2 trillion in savings sought in earlier negotiations and seek perhaps twice as much over the next decade, Democratic officials briefed on the negotiations said Wednesday.
    The president’s renewed efforts follow what knowledgeable officials said was an overture from Mr. Boehner, who met secretly with Mr. Obama last weekend, to consider as much as $1 trillion in unspecified new revenues as part of an overhaul of tax laws in exchange for an agreement that made substantial spending cuts, including in such social programs as Medicare and Medicaid and Social Security — programs that had been off the table…. – NYT, 7-6-11
  • Obama, Democrats not ready to play 14th Amendment card with debt ceiling: Law professors, Democratic senators and liberal commentators have recently raised a tantalizing possibility for ending the congressional wrangling over raising the federal limit on borrowing: President Obama could simply declare the debt ceiling unconstitutional and be done with it.
    Advocates of this approach cite the 14th Amendment of the Constitution, which states that the “validity of the public debt of the United States . . . shall not be questioned.”
    On Wednesday at a White House question-and-answer session held via the Web service Twitter, Obama said the debate over raising the $14.3 trillion debt ceiling shouldn’t become a constitutional question.
    “I don’t think we should even get to the constitutional issue. Congress has a responsibility to make sure we pay our bills. We’ve always paid them in the past,” Obama said. “The notion that the U.S. is going to default on its debt is just irresponsible.”… – WaPo, 7-6-11
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