Political Buzz Debt Ceiling Showdown, July 20, 2011: Obama Open to Short Term Debt Extension if Linked to Long Term Deal, Debt Cap Deal and Gang of Six Proposal

POLITICAL BUZZ

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

The president is pictured in debt talks with congressional leaders. | AP Photo

JULY 20, 2011: PRESIDENT OBAMA OPEN TO SHORT TERM DEBT EXTENSION AGREEMENT & DEBT CAP DEAL

“The president has been clear that he will not support a short-term extension of the debt ceiling. What we mean by that is we would not support a short-term extension absent an agreement to a larger deal. That’s not acceptable. Obviously, if both sides agree to something significant, we will support the measures needed to finalize the details of that.” — White House spokesman Jay Carney

Washington Post-ABC News Poll: Obama and GOP (low) approval on economy, deficit and taxes: Obama’s ratings are slightly higher than Republicans – but by no means good – on each issue. He outpolls Republicans on handling the economy by 39 to 28 percent. He tops the Republicans on the deficit by 38 to 27 percent. And on perhaps the most contentious point in the debt ceiling negotiations, Obama’s approval on taxes is higher by a more significant 45 to 31 percent. – WaPo, 7-20-11

  • Is Obama winning over Americans in debt-ceiling standoff?: Recent polls show that Americans are coming to agree with Obama’s position: that Congress must raise the debt ceiling and reduce the deficit by a mix of tax hikes and spending cuts…. – CS Monitor, 7-20-11
  • Obama open to short-term deal on debt ceiling. Here are five ideas: The scramble on Capitol Hill to come up with a solution to the nation’s debt crisis produced a surprise announcement from the White House Wednesday: Contrary to previous statements, President Obama would support a short-term deal to raise the debt ceiling.
    White House Press Secretary Jay Carney added an important caveat, however. The president would only sign the short-term deal if it was a means to buy time to finalize a longer-term deal without running afoul of the Aug. 2 deadline.
    Suddenly, Washington is awash in prospects for short term deals. Here are five…. – CS Monitor, 7-20-11
  • Latest developments in debt ceiling standoff: Congress has until Aug. 2 to raise the federal borrowing limit or the government will run out of money and possibly default on its debt. House Republicans say they won’t raise the debt limit without equal spending cuts. President Barack Obama and Democrats insist that higher revenues must be included.
    Wednesday’s developments: Obama signaled he might be open to a short-term debt solution if a larger, long-term deal was in place. The president called Democratic and Republican leaders back to the White House for separate negotiations. The key question with time running short: What will it take to muster enough votes from both parties to muscle legislation through the House and Senate and raise the national debt limit?… – AP, 7-20-11
  • If debt deal near, Obama would OK stopgap measure: Running out of time, President Barack Obama softened his stand and signaled Wednesday he would back a short-term deal to prevent a disastrous financial default on Aug. 2, but only if a larger and still elusive deficit-cutting agreement was essentially in place. He called lawmakers to the White House in a scramble to find enough votes from both Republicans and his own party.
    Obama met with the Democratic leaders of the House and Senate, and then separately with House Speaker John Boehner and his deputy, Majority Leader Eric Cantor, in hopes of cobbling together a big compromise. All signs pointed to a legislative fight that would play out to the end…. – AP, 7-20-11
  • Obama Open to Debt-Cap Deal: The White House encouraged congressional leaders to reach a major deficit-reduction deal by offering them a little more time, as they scrambled to find a way to prevent a government default in less than two weeks.
    President Barack Obama would accept a short-term increase in the federal government’s $14.29 trillion borrowing limit if congressional leaders reach agreement on a “significant” deficit-reduction plan before Aug. 2 but need more time to pass legislation, a White House spokesman said Wednesday.
    The move reflects Mr. Obama’s desire to keep alive hopes that Democrats and Republicans can achieve a far-reaching agreement. Mr. Obama has made clear his desire for the largest deal possible, perhaps along the lines of a new proposal to shrink the deficit by $3.7 trillion over 10 years that was unveiled this week by a bipartisan group of senators known as the “Gang of Six.”
    Mr. Obama’s willingness to entertain a short-term extension also suggests rising doubt in the White House that Democrats and Republicans can agree on and pass such a sweeping deficit-reduction plan by the Aug. 2 deadline.
    President Obama is open to a short-term deal to raise the debt ceiling, but only if it is used as a bridge to a larger agreement to cut the budget deficit. Jerry Seib has details from Washington.
    “If both sides agree to something concretely significant, we will support the measures needed to finalize the details,” White House press secretary Jay Carney said, later clarifying that he meant a “very” short-term extension, such as a few days. “We believe a short-term extension, absent an agreement to a larger deal, is unacceptable,” Mr. Carney said…. – WSJ, 7-20-11
  • Obama, lawmakers meet; president would OK short-term deal to avoid default if big pact close: Running out of time, President Barack Obama softened his stand and signaled Wednesday he would back a short-term deal to prevent a disastrous financial default on Aug. 2, but only if a larger and still elusive deficit-cutting agreement was essentially in place. He called lawmakers to the White House in a scramble to find enough votes from both Republicans and his own party.
    Obama met with the Democratic leaders of the House and Senate, and then separately with House Speaker John Boehner and his deputy, Majority Leader Eric Cantor, in hopes of cobbling together a big compromise. All signs pointed to a legislative fight that would play out to the end…. – AP, 7-20-11
  • Obama: ‘Some progress’ being made in debt talks: President Barack Obama says there has been “some progress” in negotiations with bipartisan lawmakers over raising the nation’s debt ceiling.
    But Obama says lawmakers are nearing the “11th hour” as an Aug. 2 deadline to raise the debt ceiling nears. He praised a proposal from leaders of the bipartisan “Gang of Six” who say they’re nearing agreement on a major plan to cut the deficit by more than $4 trillion over the coming decade.
    The president’s remarks come as House Republicans move toward a vote on legislation that would raise the nation’s debt limit in exchange for trillions of dollars in federal spending cuts and congressional approval of a constitutional amendment requiring a balanced budget. Democratic opposition means it has no chance of clearing the Senate, and even if it did, Obama has vowed a veto…. – Businessweek, 7-20-11
  • White House signals openness to short-term debt extension if tied to ‘larger deal’: President Obama would consider a short-term measure aimed at raising the nation’s debt ceiling and avoiding a default by Aug. 2 if Congress agrees to a larger, long-term deficit-reduction and debt-ceiling deal and needs “a few days” to finalize the legislation, his spokesman said Wednesday.
    With time running out for reaching such a deal, Obama called House and Senate Democratic leaders to a White House meeting Wednesday as he sought to shore up his party’s support for a compromise deficit-reduction plan that could help break a political impasse over the debt limit and avert a U.S. default.
    Later, Obama was scheduled to confer at the White House with the top two House Republicans: Speaker John A. Boehner (Ohio) and Majority Leader Eric Cantor (Va.)…. – WaPo, 7-20-11
  • Push for Broad Budget Deal Intensifies Among Leaders: With the clock ticking down, President Obama and Congressional leaders began a final effort to forge a broad deficit-reduction plan even as new cracks appeared among House Republicans over how to proceed.
    The White House suggested for the first time that Mr. Obama might be willing to agree to extend by a few days the Aug. 2 deadline for legislation to increase the government’s debt ceiling if a deal was in sight, stepping up the pressure on the two parties to come to terms.
    Mr. Obama met separately at the White House with Republican and Democratic leaders. But neither side reported any substantive progress as they searched for a formula that would include deep spending cuts, cost-saving changes to entitlement programs and an overhaul of the tax code that would increase revenues by closing certain tax breaks and eliminating deductions but also lower some tax rates.
    Politically, the main question remained whether House Republicans would be willing to negotiate over any package that could be construed as raising taxes, and throughout the day there were signs of internal debate among party leaders.
    Speaker John A. Boehner has shown continued interest in a deal if it can be done in a way that emphasizes lower tax rates…. – NYT, 7-20-11
  • Obama Backs Latest Bargain: President Barack Obama, in a last-ditch bid for a bipartisan “grand bargain” on the budget, threw his weight Tuesday behind a $3.7 trillion deficit-reduction plan unveiled by six Republican and Democratic senators.
    President Obama backed a $3.7 trillion deficit-reduction plan from the “Gang of Six” as “a very significant step” after it gained fresh momentum from a bipartisan group in the Senate. Nell Henderson has details from Washington.
    The plan, which would span a decade, has scant chance of passing intact as the solution to the current debate over raising the government’s borrowing limit. Some Republicans were wary of the plan’s changes in tax rules. Democrats said it would be near impossible to draft legislative language and pass it quickly.
    Still, some elements from the so-called Gang of Six senators could be incorporated into a final deal to shrink the deficit and raise the government’s $14.29 trillion debt cap by Aug. 2. That’s when the Treasury Department says the government will run out of cash to pay all its bills without an increase in borrowing authority.
    Even House Majority Leader Eric Cantor (R.,Va.), one of the party’s most combative conservatives, didn’t dismiss the plan out of hand. “While there are still portions that are unclear and need more detail, this bipartisan plan does seem to include some constructive ideas to deal with our debt.”
    Mr. Obama and top congressional Democratic leaders were scheduled to meet at the White House Wednesday afternoon to discuss the path forward. It remains unclear how Mr. Obama and the congressional leaders will proceed on legislation to increase the statutory borrowing limit, although back-channel talks between leaders in the House and Senate are expected to accelerate in the coming days…. – WSJ, 7-20-11
  • ‘Cut, cap, and balance’ vs. ‘gang of six’ plan: Which for House GOP?: ‘Cut, cap, and balance’ legislation, which lays out a GOP plan to eliminate the US budget deficit, is set for a House vote late Tuesday. A symbolic move, the vote is nonetheless vital to Republicans. Here’s why…. – CS Monitor, 7-20-11
  • Obama to talk debt ceiling in TV interviews: President Barack Obama continues his push for an agreement to raise the debt ceiling by sitting down this morning for more broadcast interviews. He’ll talk with TV stations from Columbus, Ohio (WBNS), Los Angeles (KABC) and Kansas City, Mo. (KMBC).
    Yesterday, after a bipartisan group of senators known as the “Gang of Six” offered the framework of a deal that includes spending cuts and higher taxes, Obama said he hopes congressional leaders can now “start talking turkey.”
    Earlier Wednesday, the president and Vice President Joe Biden get their daily briefing, and Obama meets with senior advisers. In the afternoon, the president and vice president meet with Defense Secretary Leon Panetta…. – AP, 7-20-11
  • ‘Gang of Six’ plan takes center stage as debt deadline nears:

    President Obama, some conservative Republicans back the Gang of Six plan Sen. Reid says there isn’t time to pass the Gang of Six plan by August 2 The House votes 234-190 to approve the “cut, cap and balance” plan The United States must raise its $14.3 trillion debt ceiling by August 2 or risk a default

    Top administration and congressional officials continued focusing on a new bipartisan $3.7 trillion debt reduction plan Wednesday — the latest effort to avoid a potentially catastrophic default next month on the federal government’s financial obligations.
    President Barack Obama offered strong praise for the initiative on Tuesday, calling it “broadly consistent” with his own approach to the current debt ceiling crisis because it mixes tax changes, entitlement reforms and spending reductions.
    Senate Democratic leaders, however, expressed skepticism that they will be able to increase the debt limit and pass the plan — drafted by members of the chamber’s so-called “Gang of Six” — by the August 2 deadline…. – CNN, 7-20-11

  • The White House case against ‘Cut, Cap, Balance’: I just got off a conference call with White House communications director Dan Pfeiffer and deputy NEC director Jason Furman, in which they elaborated on the administration’s opposition to the “Cut, Cap, Balance” plan that the House is voting on Tuesday. The White House put out a statement Monday afternoon saying in no uncertain terms, “If the President were presented this bill for signature, he would veto it.”
    The rhetoric on the call was unusually heated. In a prepared statement, Furman called CCB a “extreme, radical, unprecedented” proposal, and Pfeiffer described it as “the Ryan plan on steroids”, noting that it would require much deeper cuts than Rep. Paul Ryan’s budget proposal. To be specific, Furman alleged that the balanced budget amendment included in the CCB plan would force $400 billion in yearly cuts on top of the cuts in Ryan’s budget. If defense spending is exempted, that amounts to a 12 percent across-the-board spending cut that includes Medicare and Social Security. It would involve a 70 percent reduction in clean energy funding, $6,000 in extra annual costs for the average senior due to Medicare and Social Security cuts, and a one third cut to infrastructure spending, he said. These cuts, Furman said, are “essentially historically unparalleled.”… – WaPo, 7-20-11
  • Debt ceiling stalemate is Tea Party’s fault: GOP base refuses to compromise: The possibility is more real than ever that Aug. 2 will come and go without a deal to extend the debt ceiling, unleashing potentially catastrophic economic consequences. If this comes to pass, the blame – all of it – will belong to one group: The rabidly anti-Obama Tea Partyers who make up the base of today’s Republican Party.
    It is because of this compromise-allergic base that the House spent yesterday debating a radical deficit reduction plan – “cut, cap and balance,” they call it – that has absolutely zero chance of moving through the Senate, much less earning President Obama’s signature. But conservative ideologues love it, so this is how Congress must spend its time as the default deadline draws nearer.
    In theory, there’s a purpose to this lunacy. GOP leaders in the House and Senate seem close to a deal with Obama that would permit the President to raise the ceiling three times in the next year in exchange for some substantial concessions. Right now, it has no chance of passing muster with the GOP purists in the House. But maybe they’ll be persuaded when they see the futility of “cut, cap and balance” – and when Wall Street sends out a few more frantic pleas to avoid a default. Or maybe they won’t be…. – NY Daily News, 7-20-11
  • House Republicans pass symbolic measure on debt ceiling: The legislation calls for a cap on spending and a constitutional amendment to balance the budget. It is likely to die in the Senate. President Obama says time is running out for ‘actually solving this problem.’… – LAT, 7-20-11
  • House OKs debt plan, defying Obama, Senate: Defying a veto threat, the Republican-controlled U.S. House voted Tuesday night to slice federal spending by $6 trillion and require a constitutional amendment for a balanced budget to be sent to the states in exchange for averting a threatened Aug. 2 government default.
    The 234-190 vote marked the power of deeply conservative first-term Republicans, and it stood in contrast to rising support at the White House and in the U.S. Senate for a late stab at bipartisanship to solve the nation’s looming debt crisis.
    President Barack Obama and a surprising number of Republican senators lauded a deficit-reduction plan put forward earlier in the day that would include $1 trillion in what sponsors delicately called “additional revenue” and some critics swiftly labeled as higher taxes.
    The president said he hoped congressional leaders would “start talking turkey” on a deal to reduce deficits and raise the $14.3-trillion debt limit as soon as Wednesday, using the plan by the so-called Gang of Six as a road map…. – AP, 7-20-11
  • Bachmann: ‘I Won’t Vote to Raise Debt Ceiling’: Rep. Michele Bachmann is doubling down on her position that the debt ceiling should not be raised — under any circumstances. Her stance, underscored in a new ad, comes even as polls show Americans want a debt-ceiling deal, and shows that the tea-party favorite is betting her presidential campaign entirely on the anti-big-government crowd.
    The Minnesota Republican who hopes to make a strong showing in Iowa’s first-in-the-nation presidential nominating contest, went up with an ad Wednesday in the Hawkeye State, once again stating: “I will not vote to increase the debt ceiling.” An increase, she says, “goes completely contrary to common sense and how I grew up in Iowa.” Ms. Bachmann released a similar ad earlier this month.
    On Tuesday night, Ms. Bachmann was one of nine House Republicans to vote against a debt-ceiling package pushed by conservative Republicans. The measure, which passed the GOP-controlled House, would slash federal expenditures by more than $100 billion in fiscal 2012, limit federal spending to a percentage of GDP and start the process of passing a balanced budget amendment. The congresswoman’s take on the House bill: It’s not enough.
    “The motion does not go far enough in fundamentally restructuring the way Washington spends taxpayer dollars,” she said in a written statement Tuesday night. “Along with cutting spending, putting in place enforceable spending caps that put us on a path to balance and passing a balanced budget amendment, we must also repeal and defund ObamaCare.”… – WSJ, 7-20-11
  • Room for Debate: What Will the Debt Debate Mean for 2012?: The standoff on the debt crisis is being portrayed as mostly political, with attempts by Republicans and Democrats to position themselves for next year’s elections. The voters say they are fed up but at the same time confident — as are the players in Washington — that in the end some compromise will be reached. Indeed, for voters the debt standoff seems a sideshow to what they really care about: jobs.
    If the public is at best apathetic and at worst exasperated by the political gamesmanship in Washington, what are the risks to Republicans and to President Obama and the Democrats as they gear up for the campaign of 2012? Even if one party is blamed more than another for the impasse this summer, will it matter in November of next year? …

Blame to Go Around — Kristen Soltis, pollster
Voters Care About Jobs — Robert Reich, former Labor Secretary
Fighting the Real Crisis — Jamal Simmons, communications consultant
End-Game Negotiations Work — Norman J. Ornstein, American Enterprise Institute –

NYT, 7-19-11

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