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: JULY 18-24, 2011
- Factbox: How the Obama/Boehner debt talks unraveled: President Barack Obama and House Speaker John Boehner had agreed on the rough outlines of a far-reaching budget deal that would allow the United States to avert an imminent default before Boehner broke off talks on Friday.
Here is a summary of what the two sides had agreed upon, where they had differed, and how things fell apart… – Reuters, 7-24-11
- Timeline: How the debt talks spiraled into crisis: With financial markets on edge, White House officials and Republican leaders scrambled to reassure them that the United States will avert default and lift its $14.3 trillion borrowing limit before August 2. Following is a timeline of the U.S. debt debate…. – Reuters, 7-24-11
- Debt Ceiling for Dummies: Why Compromise Is so Necessary — Huff Post, 7-24-11
- SCENARIOS-Options for raising the U.S. debt limit: Democrats and Republicans in Congress, unable to compromise on how to cut budget deficits and raise U.S. borrowing authority, are now working on their own, competing bills. With nine days’ left until the United States runs out of money to pay all its bills after Aug. 2, the two parties were rushing to get their respective bills moving through Congress this week.
Here are some scenarios for raising the debt limit by the early August deadline to avoid a potentially crippling government default:
AN ALL SPENDING CUTS, NO REVENUES PLAN…
A SHORT-TERM DEBT LIMIT INCREASE…
BLEND THE TWO IDEAS?…
MCCONNELL “FALLBACK” PLAN…
OBAMA INVOKES THE CONSTITUTION… – Reuters, 7-24-11
- Timeline: Debt debate, 7-11-11: 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, 7-11-11
JULY 25, 2011: NO DEAL YET — BOEHNER & REID EACH DEVISING PLANS — BOEHNER WILL REVEAL UNLIATERAL PLAN IN THE PM FOR WEDNESDAY VOTE
- Two Deals, No Time: It’s crunch time. Congressional leaders have at most two days to days to reach an agreement to raise the debt limit, and lawmakers have made little progress on preventing the unthinkable.
On Sunday talks “broke down,” according to Senate Majority Leader Harry Reid (D-NV), a particularly troubling development at a point where every hour counts. While August 2nd may be the deadline, a deal must be reached no less than 5 days sooner to guarantee passage in time.
The House of Representatives requires that bill be made available online for three calendar days before a vote. In the Senate, rules require that a cloture motion to end debate “ripen” for over a day, and even then 30 hours of debate are required.
Democratic and Republican legislators are now set out to go it alone, with competing plans to cut the deficit and raise the debt limit, beginning a high-stakes game of chicken to see which side blinks first.
Speaker of the House John Boehner (R-OH) is expected to lay out a two-stage deficit reduction and debt limit package to GOP lawmakers at 2 p.m. today, and release make it available publicly this afternoon to allow for a Wednesday vote.
The Republican plan would raise the debt limit in two tranches, requiring a second vote early next year after a deficit reduction commission exacts steep spending cuts…. – Business Insider, 7-25-11
- Three GOP leaders with three ideas on the debt: For Republicans, the debt talks have shown three leaders calling three different plays, each trying to push and pull congressional Republicans in his direction. So far, all three have failed to find a plan that all of them can support.
Senate Minority Leader Mitch McConnell (R-Ky.) declared on June 19 that there wasn’t enough time to approve any of the plans to raise the government’s debt ceiling by the Aug. 2 deadline. He proposed a short-term hike to buy more time.
Two days later, House Majority Leader Eric Cantor (R-Va.) declared short-term deals a non-starter and said “there are no votes” for any grand bargain including higher tax revenue.
The next night, House Speaker John A. Boehner (R-Ohio) snuck into a secret meeting with President Obama to launch an effort for a “big deal” including hundreds of billions of dollars in new revenue.
McConnell, Boehner and Cantor say they are on the same side and never publicly criticize one another. But for the past five weeks, each has appeared to play to different audiences inside the Grand Old Party, with different motivations, according to aides and Republican lawmakers…. – WaPo, 7-25-11
JULY 24, 2011: SPEAKER JOHN BOEHNER PROMISES DEBT CEILING PLAN BY ENDS OF DAY — FORGES AHEAD ON TWO STAGE PROCESS PLAN
Boehner tells House GOP he will press ahead with his own plan for reducing the deficit: Speaker John Boehner said in a conference call with House Republicans that he would continue to pursue a two-stage strategy that would give the Treasury only about $1 trillion in additional borrowing authority, forcing another debt-limit battle early next year.
Hours before Asian financial markets were set to open Sunday evening, House and Senate leaders are now threatening to pursue two different approaches to averting a government default.
“There will be a two-stage process; it’s just not physically possible to do all of this in one step. I know the president is worried about his next election. But my God, shouldn’t he be worried about the country? We have got a budget deficit of $1.5 trillion. We’re borrowing 42 cents on every dollar we spend, we have $14.5 trillion national debt. It is time to get serious about stopping the spending here in Washington, D.C.” — Speaker of the House John Boehner on Fox News
Obama cannot raise debt ceiling on his own: Timothy Geithner on the ABC program “This Week”: “It is not a workable option. This is not a workable option to limit the damage to the American people that would come from Congress not acting to raise the — to avoid a default crisis.”
“If you’re the leader of the free world, would you please come to microphone and quit hiding in the basement about your proposals, and come on up and address the American people? Is he chicken?
Where’s the president of the United States on the most pressing financial challenges of our country on entitlement reform? Where is his specific Medicaid reform proposal? Where is his specific Medicare reform proposal? Where is his Social Security reform proposal?
The answer is he doesn’t have one. You can’t find him publicly talking about that. He’s ducking, he’s bobbing, he’s weaving. He’s not leading, and that’s not the kind of president we need, and that’s why he needs to be removed from office.” — GOP presidential candidate Tim Pawlenty, the former Minnesota governor on CNN’s “State of the Union.”
“Now the President is outraged because the GOP House leadership called his bluff and ended discussions with him because they deemed him an obstruction to any real solution to the debt crisis. He has been deemed a lame duck president. And he is angry now because he is being treated as such.
His foreign policy strategy has been described as “leading from behind.” Well, that’s his domestic policy strategy as well. Why should he be surprised that he’s been left behind in the negotiations when he’s been leading from behind on this debt crisis? Thank you, GOP House leaders. Please don’t get wobbly on us now.” 2012 can’t come soon enough. — Sarah Palin on her Facebook Page
- Factbox: How the Obama/Boehner debt talks unraveled: President Barack Obama and House Speaker John Boehner had agreed on the rough outlines of a far-reaching budget deal that would allow the United States to avert an imminent default before Boehner broke off talks on Friday.
Here is a summary of what the two sides had agreed upon, where they had differed, and how things fell apart… – Reuters, 7-24-11
- No deal yet on debt crisis. How will Asian markets and Wall Street react?: Washington’s self-imposed deadline to do something credible on the debt crisis before the Asian financial markets opened on Sunday passed in silence. “There could be extreme turmoil in markets,” says one expert…. – CS Monitor, 7-24-11
- Boehner, Reid seek own debt proposals: With just eight days left to raise the nation’s $14.2 trillion debt ceiling, President Obama and Republican congressional leaders failed Sunday to reach a bipartisan deal, leaving both sides to devise their own solutions.
Democratic and Republican congressional leaders were working on separate plans to raise the debt ceiling by $2.4 trillion and avoid default. Both sides said they believed a compromise was still possible.
Obama met for 66 minutes Sunday afternoon with Sen. Harry Reid of Nevada and Rep. Nancy Pelosi of California, the two Democratic congressional leaders, but they emerged with no plan or public comment….
Without an agreement, Reid and House Speaker John Boehner, R-Ohio, are working on two, still hazily defined, proposals… – USA Today, 7-24-11
- Boehner Moving Ahead With Short-Term Debt Plan: House Speaker John Boehner plans to press ahead with a shorter-term increase in the U.S. debt limit than President Barack Obama has requested, he told lawmakers today, defying a veto threat and signaling continued stalemate in the U.S. Congress as time runs short for a deal.
Boehner told rank-and-file Republicans during a conference call this afternoon that they needed to pull together as a team to block Obama, who has asked for a $2.4 trillion borrowing boost in the $14.3 trillion debt ceiling, from obtaining the money all at once, without any guarantees of spending cuts. His remarks were described on condition of anonymity by a person familiar with the discussion.
The speaker said that no one is willing to default on the full faith and credit of the U.S., according to the person.
The comments indicated that Boehner plans to force action on his plan to provide only a temporary borrowing boost of about $1 trillion accompanied by spending cuts of at least as much, tying the remainder of the debt-ceiling increase Obama has requested to further cuts in the future. The White House says Obama would veto such a measure…. – Bloomberg, 7-24-11
- House GOP and Senate Democrats each prepare new debt plans: With world financial markets watching nervously, top Democrats and Republicans in Congress each scrambled Sunday to put together new proposals to avert a looming government debt default and a potential global financial crisis.
Senate Democratic Leader Harry Reid of Nevada drafted a new plan that would allow a multi-year increase in the nation’s debt ceiling, offset by an equal or greater amount of spending cuts spread over the coming decade. Significantly, it would not include tax increases.
House Speaker John Boehner planned to outline a new blueprint on Monday amid warnings from their leader that they must find a solution that can get through the Democratic Senate.
They all failed to meet their own deadline for a bipartisan agreement before markets opened in Asia on Sunday evening U.S. time, the first markets to open since talks broke down at the White House Friday evening.
Financial markets appeared to be watching cautiously, but initial trading made it clear that they were unshaken as yet.
Market jitters are expected to rise each day from now on that the United States government fails to raise its $14.3 trillion legal limit for borrowing before its Aug. 2 deadline. If the ceiling isn’t lifted by then, that could force the government to stop paying paychecks or benefit checks — or to default for the first time in history by failing to pay bond holders debt already owed. That could panic financial markets and kick the weak U.S. economy back into recession…. – McClatchy Newspapers, 7-24-11
- Obama, Congress fail to break debt deadlock: Lawmakers failed to achieve a budget breakthrough and instead worked on rival plans Sunday in a impasse that heightened prospects for a catastrophic debt fault.
With time running out, Republican and Democratic lawmakers split into opposite camps and held talks among themselves. There were no signs of a deal emerging to head off a default in nine days that could trigger global economic calamity and downgrade America’s Triple-A credit rating.
Lawmakers missed a self-imposed deadline of producing a deficit-reduction deal by the time Asian markets opened on Sunday, but planned to outline a proposal Monday. A deficit deal is needed to permit a vote to increase the $14.3 trillion U.S. debt ceiling by August 2.
President Barack Obama heard details of a Senate Democratic plan that would rely on spending cuts, not new tax revenue, which would violate one of his key demands…. – Reuters, 7-24-11
- No deal on debt ceiling: The day started with congressional leaders trying to resolve the dangerous impasse over the debt ceiling — and calm any anxiety markets may have when they reopened Monday.
It ended in a continuing impasse, with each party sketching out their own plans and showing little common ground.
Senate Majority Leader Harry Reid said he is preparing a proposal to raise the ceiling through the end of 2012 and cut $2.7 trillion in debt. The measure would not call for any tax revenue increases.
On the other side, House Speaker John Boehner told GOP lawmakers Sunday in a conference call that he wants a deal that sticks to the principles of the Cut, Cap and Balance bill that the House passed and Senate rejected last week, sources familiar with the call told CNN.
A key sticking point remains how much to raise the debt ceiling: Democrats want it raised enough so the issue won’t come up again until after the November 2012 election. Boehner has said that is impossible; he wants it raised in two, smaller increments.
It remains to be seen if the two sides can resolve their conflicts soon…. – CNN Money, 7-24-11
- ‘World News’ Political Insights: Washington Dysfunction Hits New Low: The only problem with talk of compromise is that it doesn’t have a natural constituency. Until and unless, of course, it has a huge one.
The stand-off on debt negotiations declared late Friday begins to have real repercussions this week, as a new political player with even crasser motivations than Democrats or Republicans emerges: financial markets.
The market reaction injects an unpredictable element into a drama that’s actually been quite predictable. Neither side is willing to move off of core principles because both sides are convinced that they’re right and that the public backs them up on it.
Three consecutive “change” elections — two favoring Democrats, one Republicans — has created divided government. It’s also exacerbated the divide in perceptions around public sentiment, making any middle ground even more elusive.
It isn’t that politicians don’t know that voters are angry. It’s that both sides are convinced that they’re only angry with the other side…. – ABC News, 7-24-11
- Boehner Said to Tell Republicans No Deal Yet as Obama to Meet Pelosi, Reid: House Speaker John Boehner is telling rank-and-file Republicans that there’s no agreement on a plan for raising the debt ceiling before a default threatened for Aug. 2, a sign of continuing stalemate in the U.S. Congress as time runs short for a deal.
A Republican congressional official said Boehner, speaking by conference call to lawmakers, is reporting that discussions are continuing on such a plan.
Boehner told his members yesterday that he wanted to send markets a positive sign by the time Asian markets began opening this afternoon that Congress would strike a deal to break the impasse over raising the $14.3 trillion borrowing limit.
With no evidence that such compromise has been reached, President Barack Obama will meet at 6 p.m. at the White House with Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi…. – Bloomberg, 7-24-11
- Boehner presses ahead with unilateral debt plan: Hours before Asian financial markets were set to open Sunday evening, talks over the federal debt limit were at a standstill, and House and Senate leaders were threatening to pursue two different approaches to averting a government default in a messy legislative showdown.
In a conference call with House Republicans, Speaker John A. Boehner (R-Ohio) said he would press ahead with a two-stage strategy that would give the Treasury only about $1 trillion in additional borrowing authority, forcing another debt-limit battle early next year with the political parties in the heat of the 2012 presidential campaign.
“If we stick together, we can win this for the American people,” Boehner told his troops, participants said.
Boehner promoted that strategy on Fox News Sunday, telling host Chris Wallace that “there’s going to be a two-stage process. It’s not physically possible to do all of this in one step.” In a barbed aside, he added: “I know the president’s worried about his next election. But my God, shouldn’t we be worried about the country?”… – WaPo, 7-24-11
- Boehner tells Republicans to stay united on debt deal: House of Representatives Speaker John Boehner on Sunday told his fellow Republicans that “there is a path” to cut U.S. spending and raise the debt ceiling, but it will require his party to accept sacrifices, according to two sources who heard his message.
On a conference call, Boehner said he does not think it is possible to negotiate a large spending-cut deal directly with the White House, the sources said.
He told Republicans he is drafting legislation that reflects the principles of a strict spending-cut bill that failed in the Democratic-controlled Senate last week, the sources said. – Reuters, 7-24-11
- Reid Working on Backup Plan to Lift Ceiling, Cut Spending: Senate Democratic Majority Leader Harry Reid is working on a backup plan to increase the debt ceiling by $2.5 trillion and cut spending by the same amount in the event there is no further progress in talks between Democratic and Republican congressional leaders, a Senate Democratic aide said Sunday.
The plan would have no new tax increases, the aide said. The $2.5 trillion increase in the debt limit would be enough to support federal spending through 2012, avoiding the need to revisit the issue next year.
The Senate Democratic leader could brief some members of his caucus on the plan later Sunday evening, the aide said. More details of what would constitute the spending reductions would not be available until after that briefing occurred…. – WSJ, 7-24-11
- John Boehner, GOP prepared to ‘move on their own’ to unveil debt ceiling plan Sunday: House Speaker John Boehner said Sunday he’s prepared to go it alone and unveil a plan to raise the nation’s debt ceiling timed to calm the opening of the Asian markets.
“I would prefer to have a bipartisan approach to solve this problem. If that’s not possible, I and my Republican colleagues in the House are prepared to move on their own…today,” Boehner told Fox News Sunday.
The move comes amid a weekend of emergency meetings on Capitol Hill as lawmakers try to cut a path out of deadlock to calm investors before the Asian markets open later this afternoon.
Boehner’s latest proposal is a two-phase plan that would raise the debt ceiling about $1 trillion through 2011 and be offset by an equal amount of savings.
A second debt boost would be pegged to upwards of $3 trillion more in savings in 2012, with a bipartisan committee charged with coming up with a mix of spending cuts, revamped programs and tax overhauls. Such a plan – which would mean another debt debate in the middle of the 2012 election season – was a non-starter with Democrats and the administration…. – NY Daily News, 7-24-11
- Developments in U.S. debt talks: U.S. House of Representatives Speaker John Boehner tells Fox News Sunday that House Republicans are prepared to push through their own deficit reduction package if congressional leaders fail to produce a bipartisan plan by Sunday afternoon. That would be just hours before financial markets open in Asia. With time running out, the Democratic-led Senate might have no choice but to accept what the Republican-led House passes this week.
White House Chief of Staff Bill Daley tells NBC’s “Meet the Press” that any short-term deal to raise the debt limit would harm the economy because financial markets and business leaders would not have the certainty they need to make investment decisions. Democrats want a debt limit extension through the 2012 presidential election year…. – Reuters, 7-24-11
- Boehner Writes a House Plan in Case Debt Deal Stalls: Speaker John A. Boehner said Sunday that the House would prepare its own deficit reduction package if Congress and the White House failed to agree on a bipartisan plan by Sunday afternoon, as lawmakers forged ahead in an increasingly grim standoff over whether to raise the nation’s debt ceiling.
Leaders of both parties continued to negotiate over the telephone, racing toward the opening of the Asian markets, which happens later on Sunday. That opening is widely feared to be the first real test of tangible financial market fallout from the impasse over the debt limit. It was far from clear that such a deal would or could be reached by that hour…. – NYT, 7-24-11
- Boehner asks GOP lawmakers to embrace new plan: House Speaker John Boehner implored fellow House Republicans Sunday to get behind a measure to resolve the debt crisis that can pass both the House and Senate.
In a conference call, Boehner told the House Republicans that some of them will have to make sacrifices as part of the deal. A person familiar with Boehner’s remarks said the speaker told lawmakers that both the House and Senate are ready to embrace significant spending reductions.
Boehner, however, said he does not believe President Barack Obama will ever embrace a big package that does not include tax increases…. – AP, 7-24-11
- US Republicans may present a proposal to Obama tonight: US Republicans may present a proposal to Obama tonight The impasse on Capitol Hill over how to reduce the United States´ budget deficit continues this weekend. Although it would seem that some progress has been made there is still, at least, and in the best of cases, some posturing coming from both sides and, at worst, the risk of miscalculations on either part.
Thus, the House speaker, John Boehner, has told Republican lawmakers in a conference call that they need to provide a positive signal on a plan to avert default before Asian markets open, Republican congressional aides have said, according to Bloomberg News…. – Share Cast, 7-24-11
- As deadline looms, Congress scrambles for debt limit deal: Despite ongoing efforts by congressional leaders to hammer out a deal on Sunday for raising the debt ceiling, all indications suggest that the two parties remain far apart on a viable bipartisan agreement just hours before the opening of the Asian financial markets.
House Speaker John Boehner, who abandoned debt negotiations with the president on Friday, says he is working on the framework for a new deficit reduction proposal, which he hopes to unveil on Sunday. But his proposal is expected to include a two-part plan, with two debt limit increases – and Democrats have repeatedly vowed to fight a short-term package.
Nevertheless, Boehner pledged on Sunday to move forward with a his proposal regardless of Democratic opposition. “The preferable path would be a bipartisan plan that involves all the leaders, but it is too early to decide whether that’s possible,” he said in an appearance on “Fox News Sunday.” “If that’s not possible, I and my Republican colleagues in the House are prepared to move on our own.”
Boehner’s $3-4 trillion proposal is expected to include a short-term increase in the debt limit paired with cuts of equal or greater size, along with an agreement to increase the limit again later on – on that occasion paired with spending reforms. Entitlements and mandatory spending would be targeted for reforms and savings, which would be identified either by a commission or by congressional committees…. – BS News, 7-24-11
- Geithner Calls Two-Stage Rise of Debt Ceiling ‘Nonstarter’: U.S. Treasury Secretary Timothy Geithner said the latest “two-stage” proposal being considered by Republicans to lift the federal debt ceiling is a non-starter because it can’t garner enough Democratic support to pass Congress.
Mr. Geithner, speaking on CNN’s “State of the Union,” said the GOP idea would be just a short-term solution to the current budget impasse and that President Barack Obama’s “preference, still” is to reach a bigger agreement to reduce the budget deficit and raise the government’s $14.29 trillion borrowing limit through 2012.
The president is still in talks with House Speaker John Boehner (R., Ohio) over how to lift the debt cap in time to avoid a government default, Mr. Geithner said.
The latest Republican proposal would raise the debt limit in two phases, with a smaller increase of about $1 trillion immediately, which would carry the government through the end of this year, matched by a similar amount of spending cuts. The second increase would depend on a deficit-reduction commission’s recommendations.
The commission would recommend a set of changes to safety-net programs and a tax overhaul in hopes of closing the deficit by as much as another $3 trillion. Once that package was adopted, the debt ceiling would be raised again in January 2012…. – WSJ, 7-24-11
- The 14th Amendment, the Debt Ceiling and a Way Out: A few days ago, former President Bill Clinton identified a constitutional escape hatch should President Obama and Congress fail to come to terms on a deficit reduction plan before the government hits its borrowing ceiling. He pointed to an obscure provision in the 14th Amendment, saying he would unilaterally invoke it “without hesitation” to raise the debt ceiling “and force the courts to stop me.”
On Friday, Mr. Obama rejected the idea, though not in categorical terms. “I have talked to my lawyers,” Mr. Obama said. “They are not persuaded that that is a winning argument.”
Another element of uncertainty and possible court battles do not seem to appeal to the White House, and it is, in any event, not clear that the nation’s creditors would continue to lend it money were the president to take unilateral action. The provision in question, Section 4 of the amendment, was meant to ensure the payment of Union debts after the Civil War and to disavow Confederate ones. But it was written in broader terms.
“The validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion,” the critical sentence says, “shall not be questioned.”
The Supreme Court has said in passing that those words have outlived the historical moment that gave rise to them….. – NYT, 7-24-11
- US House Speaker Boehner: last offer still on table: “The preferable path would be a bipartisan plan that involves all the leaders, but it is too early to decide whether that’s possible,” Boehner said on Fox News Sunday. “If that’s not possible, I and my Republican colleagues in the House are prepared to move on our own…. There is going to be a two-stage process. It is not physically possible to do all of this in one step.”
Boehner said his offer that included some $800 billion in new tax revenue and massive spending cuts was never withdrawn. That plan was dubbed the “grand bargain” despite his decision to walk away from negotiations with Obama last week.
“I don’t know, it may be pretty hard to put Humpty Dumpty back together again. My last offer is still out there. I’ve never taken my last offer off the table,” Boehner said, noting that the White House never has agreed to it. At the moment, however, Boehner said that the better path was working with his congressional colleagues “to put together a process” that is do-able…. – Reuters, 7-24-11
- Democrats cool to Boehner’s two-step debt-ceiling plan: House Speaker John Boehner said he is still trying to unveil a bipartisan debt limit deal this afternoon, but acknowledged he doesn’t have Democrats onboard with a two-step proposal he has offered. “We’re not there yet,” the Republican said in a morning interview on “Fox News Sunday.”
Boehner and Democrats in Congress are stuck on the structure of the deficit reduction plan needed to persuade rank-and-file Republicans to raise the debt limit.
If the limit isn’t raised by Aug. 2 the government will not be able to pay its bills. Boehner said Saturday that he wanted to announce a breakthrough in talks before the financial markets opened in Asia on Sunday.
As talks with congressional Democrats appeared stalled, both Boehner and Treasury Secretary Timothy Geithner appeared to open the door to resuming direct discussions with the WH. The speaker pulled out those talks on Friday. Asked if that so-called “grand bargain” was dead, Boehner said, “It may be pretty hard to put Humpty Dumpty back together again,” he said. “My last offer is still out there.”
The comments came as congressional Democrats appear to have drawn a hard line against two-step process Republicans are pushing…. – LAT, 7-24-11
- Obama, lawmakers scramble to salvage US debt deal:
Congress drafting legislation, wants plan by Monday
Treasury out of money on Aug. 2; AAA rating at risk
Default would raise interest rates, hit global growth
Congress aims to show progress before Asian markets open
Scolded by President Barack Obama, Congress scrambled on Saturday to produce a deficit plan within 48 hours that keeps the United States from a catastrophic debt default now days away.
A day after talks collapsed in acrimony, Obama held an emergency meeting with congressional leaders at the White House and told them to find areas of agreement.
Their goal: Seal a deficit-reduction package of spending cuts and perhaps tax increases that will allow a vote by the Aug. 2 deadline to raise the U.S. debt ceiling beyond $14.3 trillion and avoid economic calamity.
A Republican leadership aide said lawmakers are working on a plan for $3 trillion to $4 trillion in savings over 10 years, but another high-ranking Republican official said no numbers had been settled. Republican leaders want “to show progress” by 4 p.m. EDT (2000 GMT) on Sunday, the aide said…. – Reuters, 7-24-11
- Republicans Weigh Short-Term Debt Deal, Risking Obama Veto: Republicans prepared to force action on a shorter-term extension of the U.S. debt limit than President Barack Obama has requested, defying a veto threat amid warnings that continued stalemate risks roiling financial markets as soon as tonight.
The president would veto a measure to raise the debt ceiling if it doesn’t extend the limit into 2013, White House Chief of Staff Bill Daley said in an interview on NBC’s “Meet the Press.” Daley warned that “markets around the world” would react negatively to a short-term measure offering less than $2.4 trillion in borrowing authority. “We’ve got to get past this debt-ceiling vote,” Daley said. “It’s time to get some certainty.”
House Speaker John Boehner, an Ohio Republican, said while he’d prefer a compromise package, his party was “prepared to move on our own” if that proved impossible. He aims to announce a framework — bipartisan or not — later today to try to minimize uncertainty before Asian markets open, he said on Fox News. Boehner scheduled a 4:30 p.m. conference call with Republicans…. – Bloomberg, 7-24-11
- Boehner tells GOP he will unveil new debt strategy: Congressional leaders raced Saturday to develop a new strategy for raising the federal debt limit that House Speaker John A. Boehner told his troops would include an ambitious plan to reduce future borrowing by as much as $4 trillion.
Although his talks with President Obama over a “grand bargain” to restrain the national debt collapsed in acrimony Friday, Boehner (Ohio) said he is confident lawmakers will avert a historic U.S. default — a possibility just 10 days off.
“Over this weekend, Congress will forge a responsible path forward,” Boehner said in a statement.
The speaker and other leaders started their day at the White House, where Treasury Secretary Timothy F. Geithner warned of possible trouble in the markets if policymakers don’t announce a viable plan for raising the debt limit before Asian exchanges open Sunday evening, according to people familiar with the meeting. Aides said Geithner’s warning lent fresh urgency to the negotiations, which continued throughout the day on Capitol Hill.
By early evening, the outlines of a two-stage strategy were emerging. First, lawmakers would vote on a package to cut agency spending by as much as $1 trillion over the next decade and raise the debt limit, currently set at $14.3 trillion, by the same amount. That would give Geithner enough borrowing authority to cover the nation’s bills through the end of this year…. – WaPo, 7-23-11
JULY 23, 2011: OBAMA MEETS WITH CONGRESSIONAL LEADERS AT THE WHITE HOUSE — NO DEAL IN SIGHT
Boehner tells GOP he plans to unveil new debt strategy within 24 hours: House Speaker John A. Boehner (R-Ohio) told his troops Saturday that he hopes to roll out a two-step strategy within the next 24 hours for raising the federal debt limit and restraining the national debt to avoid roiling Asian financial markets when they open Sunday, according to a participant in the conference call.
In the call with his House GOP colleagues, Boehner said he still hopes to slice as much as $4 trillion out of the federal budget over the next decade, despite the collapse of talks with President Obama on Friday over a bipartisan “grand bargain” to reduce the government’s spiraling debt…. –
- President Barack Obama’s Weekly Address: A Bipartisan Approach to Strengthening the Economy — WH, 7-23-11
- Rep. Jeb Hensarling (R-TX) Delivers the Weekly Republican Address (VIDEO) — GOP, 7-23-11“I’ve been left at the altar now a couple of times. And I think that one of the questions that the Republican Party is going to have to ask itself is, Can they say yes to anything?” — President Barack Obama“The President wanted to know that there was a plan for preventing national default. The bipartisan leadership in Congress is committed to working on new legislation that will prevent default while substantially reducing Washington spending.” — Senate Republican Leader Mitch McConnell
“Congress should refrain from playing reckless political games with our economy. Instead, it should be responsible and do its job, avoiding default and cutting the deficit.” — White House Press Secretary Jay Carney
“This debate boils down to a simple choice. We can come together for the good of the country and reach a compromise or we can issue insults and demands and ultimatums at each other, withdraw to partisan corners, and achieve nothing. We know the right thing to do, and we know what the American people expect us to do.” — President Barack Obama in the July 23, 2011 Weekly Address
“Our government has gotten so big, so expensive, it’s keeping our economy from recovering as it should. If we’re going to avoid any type of default and downgrade, if we’re going to resume job creation in America, the president and his allies need to listen to the people and work with Republicans to cut up the credit cards once and for all.” — House GOP Conference Chair Jeb Hensarling
Obama/Boehner Talk Kicks Off With Light Banter: “I think everybody agrees it’s too hot to play golf today,” Obama told Boehner….
Boehner responded to the president saying, “Yeah, I took a walk there this morning.” — ABC News, 7-23-11
Giuliani: Obama Is Afraid to Lead on Budget: “If we default, 90 percent of the responsibility is on the president of the United States,” Giuliani told Sean Hannity on Fox News after a visit to New Hampshire that fueled speculation the he would seek the GOP nomination for president. “He is yet to outline a plan because he’s too darn afraid that he’s going to have to pay political [consequences]. And he’s pretending he wants to do all these big cuts; we know he doesn’t want to do cuts . . . He wants to do the minimum number of cuts and the maximum tax increases.”
“I don’t want to do this just to run, I want to do it only because I have the best chance of winning,” he said. “And if I think someone else has a better chance of winning, I don’t want to spoil their chances.”
“My objective is we cannot have President Obama after the next year,” he said. “I mean, look at what he’s put us through with this whole debt thing, and this because a president doesn’t lead. I mean, Republicans, Democrats fight with each other in the House, and the president has never outlined how he would do it . . . This is outrageous!”… – Newsmax, 7-23-11
- Obama and congressional leaders hold grim Saturday meeting on debt crisis: President Obama convened an unusual Saturday meeting with Congressional leaders on the looming government default. The session lasted less than an hour, and the atmospherics appeared grim…. – CS Monitor, 7-23-11
- Debt crisis: Deal sought to head off stock plunge: Precariously short of time, congressional leaders struggled in urgent, weekend-long talks to avert an unprecedented government default, desperate to show enough progress to head off a plunge in stock prices when Asian markets open ahead of the U.S. workweek.
President Barack Obama met Saturday with Republican and Democratic leaders — but only briefly— the day after House Speaker John Boehner abruptly broke off his own once-promising compromise talks with the White House. Staff members kept up detailed efforts.
The goal now is to produce at least a framework agreement to raise the nation’s debt limit by Monday, congressional officials said. Even that would allow scarcely enough time for the House and Senate to clear legislation in time for Obama’s signature by the Aug. 2 deadline, a week from Tuesday.
House Speaker John Boehner told rank-and-file Republicans in a conference call after Saturday’s meeting that he hoped to be able to announce a “viable framework for progress” by 4 p.m. EDT on Sunday, before the stock markets open in Japan and elsewhere in Asia, according to two participants.
Lawmakers fear a big drop in investor confidence in U.S. stocks and bonds could start in Asia and sweep toward Europe and the Americas, causing U.S. stock values to plunge on Monday…. – AP, 7-23-11
- Congress Looks For New Debt Deal To Prevent Monday Panic: Lawmakers and President Barack Obama met at the White House Saturday, once again looking to renew talks to raise the debt limit and lower the deficit after a highly public breakdown.
The tense scene in the Cabinet Room was described by the pool reporter as “a school principal’s office with a handful of sullen suspects sitting grimly downcast as the boss says: ‘OK, we’re going to sit here all day until I find out who shot that spitball.’”
But a marathon session to iron out a deal before the end of the weekend it wasn’t — lasting just 50 minutes — and all signs point to a continued stalemate after Friday’s surprising events.
An agreement that seemed within reach to Obama on Thursday was left on the table Friday by Speaker of the House John Boehner, spurring hours of recriminations over who killed the deal.
In an hastily called press conference, Obama angrily claimed he had been “left at the altar” by Boehner for the second time in as many weeks. Boehner responded, accusing Obama of demanding new taxes at the last minute and saying “the White House moved the goalposts.”
Both leaders made themselves vulnerable in the negotiations — Obama accepting cuts to entitlements that already were inflaming his base, and Boehner agreeing to $800 billion in revenue increases — and moved quickly to blame the other for failing to agree to a historic deficit reduction package.
Obama appeared to be holding out hope Friday night that his deal with Boehner could be resurrected in some form, with an administration official saying “this offer is still available.”
But according to congressional aides, Boehner insists negotiations resume anew in Congress on a plan with spending cuts and few, if any, revenue increases — and without Obama. Additionally, they are drafting the so-called “last ditch” plan put forth by Senate Minority Leader Mitch McConnell and Senate Majority Leader Harry Reid to allow Obama to unilaterally raise the debt limit, to be taken up if all else fails….. – Business Insider, 7-23-11
- Debt crisis and market worries: Quick deficit-deal framework sought to head off stock sell-off: Precariously short of time, congressional leaders struggled in urgent, weekend-long talks to avert an unprecedented government default, desperate to show enough progress to head off a plunge in stock prices when Asian markets open ahead of the U.S. workweek. With the White House consigned to the periphery of negotiations, Republicans sought as much as $4 trillion in deficit cuts over a decade as a condition for raising the nation’s debt limit.
But after hours of staff negotiations followed by a meeting of Congress’ top four leaders, Senate Majority Leader Harry Reid accused GOP leaders of intransigence, adding he would not accept anything less than a deal that raised the debt limit through 2012. “Their unwillingness to compromise is pushing us to the brink of a default on the full faith and credit of the United States. We have run out of time for politics. Now is the time for cooperation,” he said in a sharply worded statement.
A spokesman for House Speaker John Boehner, Michael Steel, responded mildly. “Like the President and the entire bipartisan, bicameral Congressional leadership, we continue to believe that defaulting on the full faith and credit of the United States is not an option,” he said in a written statement.
Obama met earlier in the day with the Republican and Democratic leaders — but only briefly— the day after Boehner abruptly broke off his own once-promising compromise talks with the White House…. – WaPo, 7-23-11
- White House says Obama wants long-term debt solution to protect US economy: The White House says President Barack Obama won’t accept a short-term extension of the nation’s debt limit because it would do more harm than good.
Obama met with congressional leaders at the White House on Saturday for about an hour. In a written statement afterward, his spokesman said a temporary extension could hurt the U.S. credit rating and force Americans to pay higher interest rates on credit cards and other consumer debt. The White House said Congress shouldn’t be playing “reckless political games” with the economy.
Obama wants a debt-ceiling extension that will last through the end of 2012. Republicans have talked of a shorter extension…. – AP, 7-23-11
- Obama, congressional leaders gather at White House to try to save debt deal: Ahead of the Saturday talks, a House GOP aide signaled that the speaker’s most likely position would be to push for a shorter-term deal. Both sides have identified more than $1 trillion in cuts, and Boehner’s camp suggested that some of those reductions could be used to meet the Republican demand of lifting the debt ceiling by cutting more than the dollar value of that increase in borrowing authority.
The president has repeatedly objected to any short-term deal, calling it “kicking the can down the road,” because there is a likelihood that the two sides would reach the same gridlock next year once such an extension was set to expire, and he did so again on Friday. But on Saturday morning, the GOP aide said Obama was just trying to avoid dealing with the issue next year, when he will face reelection.
“Now, we do not know what size or shape a final package will take, but it would be terribly unfortunate if the president was willing to veto a debt-limit increase simply because its timing would not be ideal for his reelection campaign. “We want the most significant deficit-reduction possible, but linking the full faith and credit of the United States to presidential campaign politics is not a defensible position,” the aide added, speaking on the condition of anonymity to discuss Boehner’s strategy…. – WaPo, 7-23-11
- Fight over raising the debt ceiling almost sure to lead to bad policy: It’s quite likely that any deal reached by lawmakers to stave off default is going to involve compromises that were unthinkable even a few short weeks ago…. – LAT, 7-23-11
- Obama Calls For Leaders To Work Together On Debt ‘Neither Party Is Blameless,’ President Says: President Barack Obama called on Democratic and Republican leaders to come together and do “the right thing” to resolve the nation’s debt crisis Saturday in his weekly address.
He warned that unless an agreement is reached to raise the amount of money the federal government is allowed to borrow, debt will “weaken our economy, cause higher interest rates for families, and force us to scale back things like education and Medicare.”
The president summoned congressional leaders to the White House Saturday after House Speaker John Boehner announced Friday night he was pulling out of the debt-ceiling negotiations with the Obama administration.
“Neither party is blameless,” Obama said of the nation’s debt. “Both parties have a responsibility to do something about it.” Envisioning a way forward, the president said, “We need to put aside our differences to do what’s right for the country. Everyone is going to have to be willing to compromise. Otherwise, we’ll never get anything done.” Obama advocated a “balanced approach” to cutting the deficit that “goes after waste” and “makes some serious cuts to worthy programs” that wouldn’t be made “under normal circumstances.”… – CNN, 7-23-11
- Obama’s Weekly Address: There’s Still Time to Compromise on the Deficit: In a message that may be too little too late, President Obama used his weekly address to issue an urgent plea to Congress to compromise on a deal to raise the debt ceiling and reduce the deficit.
The morning after a deal to reduce the deficit broke down, Obama outlined his case for “a balanced approach to cutting the deficit” through spending cuts and revenue increases.
“We need an approach that goes after waste in the budget and gets rid of pet projects that cost billions of dollars,” Obama said. “We need an approach that makes some serious cuts to worthy programs – cuts I wouldn’t make under normal circumstances. And we need an approach that asks everybody to do their part.”
“There will be plenty of haggling over the details in the days ahead. But this debate boils down to a simple choice,” he said. “We can come together for the good of the country and reach a compromise; we can strengthen our economy and leave for our children a more secure future.
“Or we can issue insults and demands and ultimatums at each another, withdraw to our partisan corners, and achieve nothing,” he said. “Well, we know the right thing to do. And we know what the American people expect us to do.”… – ABC News, 7-23-11
- Debt Ceiling Talks Collapse as Boehner Walks Out: ….Republicans, though, said that the White House pushed for more revenue midway through the talks. “The White House moved the goal posts,” Mr. Boehner said in a news conference.
In his weekly radio address on Saturday, Mr. Obama continued to press the idea that it was “not right to ask middle class families to pay more for college before we ask the biggest corporations to pay their fair share of taxes.” “This debate boils down to a simple choice,” the president said. We can come together for the good of the country and reach a compromise; we can strengthen our economy and leave for our children a more secure future. Or we can issue insults and demands and ultimatums at each another, withdraw to our partisan corners, and achieve nothing.”
Representative Jeb Hensarling, Republican of Texas, pressed the idea that the deficit and government spending need to come down to help create jobs and bolster the economy. “If we’re going to avoid any type of default and downgrade — if we’re going to resume job creation in America _ the president and his allies need to listen to the people and work with Republicans to cut up the credit cards once and for all,” Mr. Hensarling said.
This time, however, Mr. Obama had also faced a firestorm from within his party, because of the spending cuts he was considering with Mr. Boehner. NYT, 7-23-11
- What Obama said in his 30-minute primal scream at the GOP: President Obama, clearly angry, let loose on House Republicans in what was, for him, an extraordinary fit of pique Friday night after talks with Speaker John Boehner broke down…. – CS Monitor, 7-23-11
- Failure to reach a ‘grand bargain’ on debt makes 2012 harder for Obama: Sometime this spring, President Barack Obama shifted course on the budget and started pursuing a “Big Deal” to dramatically curb runaway deficits. On Friday chances for that deal disappeared, and with it perhaps his last chance to fundamentally change the course of the 2012 elections.
Even a multitrillion-dollar package of spending cuts and tax increases would not have stopped the red ink. At best, the grand bargain being sought would have shaved about $4 trillion from deficits expected to total at least $8 trillion over the next 10 years. But it could have changed the storyline of the nation’s politics, if not its government. Obama would have been able to run for a second term claiming bipartisan success at fiscal restraint, a boast he hoped would help erase or at least blur the image of him as a tax-and-spend liberal.
Instead, the apparent failure of Obama and congressional leaders to reach a big deal likely means the stage is largely set for the pivotal 2012 elections. The two major parties are unable to agree on how much government people want and who should pay for it. Voters – who went for Obama and the Democrats in 2008 and for the Republicans in 2010 – will have to decide between two rival visions of government.
For Obama, who as the incumbent will be the centerpiece of the campaign, the big deal was something he came to cherish after first ignoring it…. – McClatchy Newspapers, 7-23-11
- Deficit negotiations: Myths and realities: For the better part of 2011, President Barack Obama and House Speaker John Boehner (R-Ohio) have been talking hypothetically — each from his own ideological perspective — about the potential fallout of their inability to reach a debt ceiling, deficit-cutting plan. The implications of their inability to get some deal done are about to become terrifyingly concrete — in the form of Monday’s skittish market opening and a potentially costly credit downgrade that will hike the price of everything from government borrowing to home mortgages. But that hasn’t stopped the spinning and posturing as each side seeks the most advantageous deal possible while selling the American public on the argument that it’s the other guy who is pushing the country over the abyss.
With that in mind, here’s a guide to the reality behind the spin in the debt ceiling battle:
Myth: Obama wins politically, no matter what happens…. Reality: That may have been true a week ago, but it’s less of a sure thing now.
Myth: The talks collapsed over Obama’s demand for $400 billion more in revenue over 10 years…. Reality: Boehner didn’t have the votes.
Myth: Obama could sell his end of the bargain to Democrats…. Reality: He probably could have.
Myth: The GOP owns the deficit-reduction debate…. Reality: Bye-bye high ground.
Myth: There are three branches of government…. Reality: Grover Norquist seems to have opened a fourth. And he says the McConnell-Reid compromise is the way to go, so don’t bet against everybody’s least favorite fallback. – Politico, 7-23-11
- What’s Happened to Obama?: Scarcely a week goes by without one of the big three liberal economists — Paul Krugman, Robert Reich, and Joseph Stiglitz — lambasting the president. Recently New York Times columnist Krugman lamented that Obama’s campaign slogan “Yes, we can” had become “No, we won’t.”…
What happened? Frank Rich complains about Obama’s “passivity.” Others grumble the supposedly great communicator has failed to control the political narrative — as is currently the case where the discussion in Washington centers on the Republican theme, “reduce the deficit,” when it should be on “increase the number of good jobs.” Writing in the New York Review, Yale Professor David Bromwich observed, “Obama has always preferred the symbolic authority of the grand utterance to the actual authority of a directed policy… protracted moods of extreme abstraction seem to alternate with spasmodic engagement.”
Not surprisingly, there’s recently been a spate of articles “psychoanalyzing” the president. Writing in the New Yorker, George Packer observed that Obama “takes responsibility as an end in itself.” In his blog, Packer explained, “there something in Obama’s character that needs to be seen as reasonable — as the one grown-up — in the room — and that is deeper than any partisan policy views he might hold.”…. – Huff Post, 7-23-11
JULY 22, 2011: DEBT TALKS BREAK DOWN, BOEHNER WALKS AWAY FROM OBAMA AND WHITE HOUSE NEGOTIATIONS
Boehner blames Obama for collapse of debt talks: House Speaker John Boehner said the White House “moved the goal posts” by demanding an additional $400 billion in revenue during talks over a deal to avoid default. He said he was confident the U.S. will not default but said the White House has “refused to get serious” about spending cuts. “Dealing with the White House is like dealing with a bowl of Jell-O,” Boehner said.
Obama says Boehner “walked away” from debt talks: President Obama said House Speaker John A. Boehner broke off talks over crafting a “big deal” that would avert a federal default. He called the deal the White House was offering “extraordinarily fair” and said that “if it was unbalanced it was unbalanced in the direction of not enough revenue.”
The president said he was summoning congressional leaders to the White House Saturday morning at 11 a.m. “We have run out of time and they are going to have to explain to me how it is that we are going to avoid default,” he said.
Talks in the effort to avert a government default have collapsed, GOP aides say: Negotiations between the White House and House Speaker John Boehner over an agreement to cut spending, overhaul the tax code and avert a government default have broken down, according to senior House Republican aides. Boehner planned to notify his caucus Friday night.
“In the end, we couldn’t connect. Not because of different personalities, but because of different visions for our country.” — House Speaker John Boehner
“This was an extraordinarily fair deal. If it was unbalanced, it was unbalanced in the direction of not enough revenue. It is hard to understand why Speaker Boehner would walk away from this kind of deal.” — President Barack Obama
McConnell Statement on Debt Talks: U.S. Senate Republican Leader Mitch McConnell made the following statement Friday regarding the announcement that Speaker Boehner will work with the Senate Leadership on deficit reduction legislation:
“It’s disappointing that the talks with the White House did not reach a favorable conclusion, and I appreciate the Speaker insisting on reduced spending and opposing the President’s call for higher taxes on American families and job creators. It is similarly disappointing that the White House has refused to join Republicans in our effort to cut Washington spending now, cap runaway spending in the future and save our entitlement programs and our country from bankruptcy by requiring the nation to balance its budget. Speaker Boehner has informed us that he will work on a new path forward with Leader Reid to develop a solution that will prevent default, without job killing tax hikes, while substantially reducing Washington spending.
“As I’ve said before, it’s time now for the debate to move out of a room in the White House and on to the House and Senate floors where we can debate the best approach to reducing the nation’s unsustainable debt.”
- Boehner confident government won’t default: Speaking Friday evening after withdrawing from talks on a “grand bargain” for $4 trillion or so in deficit cuts over the coming decade, Boehner said Congress will have to step in to forge an agreement to lift the government’s borrowing cap.
“We can work together here on Capitol Hill to forge an agreement and I’m hopeful the president will work with us,” Boehner said.
Boehner accused Obama of “moving the goal posts” by demanding $400 billion in tax increases on top of about $800 billion in revenues that would have been reaped through a comprehensive rewrite of the tax code.
“There was an agreement with the White House at $800 billion in revenue. It’s the president who walked away from his agreement and demanded more money at the last minute,” Boehner said. “And the only way to get that extra revenue was to raise taxes.” AP, 7-22-11
- Debt talks break down; “We have run out of time”: “We have run out of time,” Mr. Obama said in acknowledging the breakdown.
“It is hard to understand why Speaker Boehner would walk away from this kind of deal and frankly, if you look at the commentary out there, there are a lot of Republicans that are puzzled as to why it couldn’t get done,” he said. “In fact, there are a lot of Republican voters out there who are puzzled as to why it couldn’t get done.”
Mr. Obama at one point suggested he “couldn’t get a phone call returned” from Boehner earlier in the day, and said that when it comes to a deal, “I’ve been left at the altar now a couple of times.” He said he was unable to guarantee that Social Security checks and other obligations would go out after the August 2 deadline, and said the blame falls on House Republicans who have been unwilling to compromise to get a deal done.
Mr. Obama said he was calling Congressional leaders to the White House Saturday morning at 11:00 “to explain to me how we are going to avoid default,” acknowledging that discussions were basically back to square one.
“What this came down to is there doesn’t seem to be a capacity for them to say yes,” Mr. Obama said.
“I think the challenge really has to do with the seeming inability, particularly in the House of Representatives, to arrive at any kind of position that compromises any of their ideological preferences,” he said. “None. And you’ve heard it. I’m not making this up. I think there are a number of members of that caucus that have been very clear about that.”
Asked what he would say to calm skittish markets, Mr. Obama said, “I remain confident that we will get an extension of the debt limit and we will not default,” but he was less confident that the GOP will step up and deal with underlying debt and deficits “in a way that is fair.” He said he would be willing to sign a debt limit increase that did not include deficit reduction measures if presented such a bill by Congress.
The president acknowledged that the Democratic leadership in Congress had not signed off on the proposed deal. He said, however, that both he and the leadership “were willing to engage in serious negotiations despite a lot of heat from a lot of interest groups around the country in order to make sure that we actually dealt with this problem.”
The proposed cuts to entitlements had angered many Democrats and interest groups, and in announcing that he had offered $650 million in cuts on that front over ten years, Mr. Obama said, “We believed that it was possible to shape those in a way that preserved the integrity of the system, made them available for the next generation and did not affect current beneficiaries in an adverse way.”
“I was willing to try to persuade Democratic leadership as well as Democratic members of Congress that even a deal that is not as balanced as I think it should be, is better than no deal at all,” he said. “And I was willing to persuade Democrats that getting a handle on debt and deficit reduction is important to Democrats just as much as it’s important to Republicans. And frankly a lot of Democrats were persuaded by that.”… – CBS News, 7-22-11
- Boehner abruptly withdraws from talks with Obama: House Speaker John Boehner abruptly broke off talks with President Barack Obama Friday night on a deal to cut federal spending and avert a threatened government default, sending compromise efforts into an instant crisis.
Within minutes, an obviously peeved Obama virtually ordered congressional leaders to the White House for a Saturday meeting on raising the nation’s debt limit. “We’ve got to get it done. It is not an option not to do it,” he declared.
For the first time since negotiations began, he declined to offer assurances, when asked, that default would be avoided. Moments later, however, he said he was confident of that outcome.
At a news conference of his own a short while later, Boehner said, “I want to be entirely clear. No one wants default.”
In a letter circulated earlier to the House Republican rank and file, said he had withdrawn from the talks with Obama because “in the end, we couldn’t connect.”
He said the president wanted to raise taxes, and was reluctant to agree to cuts in benefit programs…. – AP, 7-22-11
- Debt Ceiling Talks Collapse as Boehner Walks Out: An angry and frustrated President Obama accused Republican leaders on Friday night of walking away from “an extraordinarily fair deal” to raise the nation’s debt limit.
In a hastily called news conference at the White house, a grim-faced Mr. Obama demanded that congressional leaders appear at the White House on Saturday.
“I want them here at 11 a.m. tomorrow,” Mr. Obama told reporters. “They are going to have to explain to me how it is that we are going to avoid default.”
The president spoke moments after House Speaker John A. Boehner, the Republican from Ohio, released a letter that he had sent to House colleagues, saying he was breaking off the budget negotiations because of differences over revenues and would instead try to strike an agreement with Senate leaders to raise the debt limit by Aug 2 and avoid sending the government into a potential default.
“In the end, we couldn’t connect,” Mr. Boehner said. “Not because of different personalities, but because of different visions for our country.”
In his comments, Mr. Obama described a deal of spending cuts that he said was more generous than what the so-called Gang of Six had offered and said it was “hard to understand” why Mr. Boehner would walk away…. – NYT, 7-22-11
- Boehner calls off debt talks with Obama: House Speaker John Boehner told President Obama tonight he is pulling out of debt negotiations to work directly with the Senate about a fall-back plan to lift the nation’s $14.3 trillion debt ceiling by the Aug. 2 deadline.
In response, Obama said he is summoning House and Senate leaders to the White House Saturday morning “to explain to me how we are going to avoid default.” “We are running out of time,” Obama said.
The Treasury Department has said that if the debt ceiling is not lifted by Aug. 2 — a week from Tuesday — it will lose borrowing authority to pay the government’s bills and face default…. – USA Today, 7-22-11
- Obama scolds GOP as debt talks break down: ‘Where’s the leadership?’: In an unusual display of emotion, President Obama angrily responded to House Speaker John A. Boehner’s abrupt withdrawal from talks on a debt ceiling increase, and summoned congressional leaders to the White House on Saturday for emergency talks to plot a new course before the Aug. 2 deadline.
“We have run out of time,” the president said in a hastily-called news briefing, just moments after Boehner informed him of his decision.
On Thursday, Obama and Boehner appeared to be closing in on a deal that would have raised the debt ceiling through 2013, combined with spending cuts and entitlement reforms to achieve $3 trillion in deficit reduction.
But talks apparently broke down in a dispute over taxes. Obama, prodded by Democrats, insisted that any deal include new revenues in addition to spending cuts…. – LAT, 7-22-11
- Boehner Pulls Out of Debt Talks: House Speaker John Boehner (R., Ohio) has decided to no longer pursue a major deficit-reduction deal with the White House and informed President Barack Obama of his decision Friday night, House Republican leadership aides said late Friday.
“In the end we couldn’t connect. Not because of different personalities, but because of different visions for our country,” Mr. Boehner wrote in a letter to his colleagues. “I have decided to end discussions with the White House and begin conversations with the Senate in an effort to find a path forward.”
The speaker’s office reached out to Senate leaders Friday to begin to figure out what the path forward is, Republican officials said. House and Senate negotiators will hold talks through the weekend to try to determine what kind of agreement they could reach to raise the government’s debt ceiling by Aug. 2 and prevent a government default.
Senior Republican aides said they didn’t know what shape a deal would ultimately take, but they said they needed to present House members with an agreement by Monday to have time to pass legislation in both chambers by Aug. 2.
“We know we have a short window of time here,” a senior Republican aide said.
After a series of discussions between administration officials and the House leadership, it became clear, the GOP aides said, that the White House and Congress’s interests were not aligned…. – WSJ, 7-22-11
- John Boehner walks away from debt talks: House Speaker John Boehner has walked away from negotiations with President Obama over a deal to raise the debt limit.
“In the end, we couldn’t connect. Not because of different personalities, but because of different visions for our country,” Boehner said in a letter to colleagues. He said Mr. Obama ” is emphatic that taxes have to be raised” and “adamant that we cannot make fundamental changes to our entitlement programs.”
“For these reasons, I have decided to end discussions with the White House and begin conversations with the leaders of the Senate in an effort to find a path forward,” he said. (Read the letter here)
House Republican leadership aides told CBS News that Boehner will work with the Senate leadership in an attempt to reach a deal that meets the GOP’s two central requirements: That spending cuts are equal to or greater than debt limit increase and that there are no new taxes…. – CBS New, 7-22-11
- Obama-Boehner talks collapse; each side blames the other: Debt-reduction negotiations between President Obama and House Speaker John A. Boehner collapsed Friday, derailing an effort to reach a landmark agreement to cut spending, overhaul the tax code and avert a government default.
In subsequent statements, both sides blamed the other for an impasse that threatens to plunge the nation into a fiscal crisis if the government fails to meet a looming deadline to raise the federal debt ceiling.
Announcing the collapse, Boehner (R-Ohio) said he could not overcome disputes with Obama on taxes and entitlements.
Appearing before reporters at the White House, Obama said he had been willing to agree to a deal that was more generous to Republican interests than to those of his fellow Democrats. “It’s hard to understand why Speaker Boehner would walk away from this kind of deal,” he said. “The vast majority of the American people believe we should have a balanced approach” between revenues and cuts.
Saying that “we have now run out of time,” Obama summoned Boehner, House Minority Leader Nancy Pelosi (D-Calif.), Senate Majority Leader Harry M. Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) to the White House at 11 a.m. Saturday.
“They’re going to have to explain to me how it is that we are going to avoid a default,” he said. He later said he was confident that a default could be avoided…. – WSJ, 7-22-11
- Obama allows for possibility of default, saying ‘if’ instead of expressing confidence US won’t: President Barack Obama for the first time has allowed for the possibility that the U.S. may default on its financial obligations.
At a hastily arranged White House appearance on Friday, Obama said: “If we default, then we’re going to have to make adjustments.”
But minutes later, the president said he remained confident that the debt limit will be extended. Said Obama: “We will not default. I am confident of that.”… – Washingtn Post, 7-22-11
- Debt talks break down; Volatility ahead: Shortly before the latest bust up in Washington, Kathy Lien Director, Global Research & Analysis at GFT wrote:
Barack Obama’s Presidency and his chance of reelection could very well be defined by what happens over the next week. If the Senate fails to raise the debt ceiling either temporarily or permanently, panic selling of U.S. dollars could drive the greenback to fresh lows against all of the major currencies. The weakness of USD/JPY and USD/CHF confirms that investors are worried about the developments or the lack thereof in the coming week.
Ultimately there are three scenarios, according to Lien:
Scenario 1 – Watered Down Debt Deal Passed – Very Dollar Bullish Scenario 2 – Temporary Increase to Debt Ceiling – Mildly Dollar Bullish Scenario 3 – Throw Up their Hands and Let the U.S. Default – Very Dollar Bearish
For not it appears we’ve moved closer to scenario 2…. – CBS Market Watch, 7-22-11
JULY 22, 2011: DEBT DEAL DEADLINE — OBAMA HOLDS TOWN HALL ON DEBT CRISIS — SENATE VOTES DOWN CUT, CAP, AND BALANCE
“Frankly, we are not close to an agreement. I would just suggest it is going to be a hot weekend here in Washington, D.C.” — House Speaker John Boehner
“I have talked to my lawyers. They are not persuaded that that is a winning argument. So, the challenge for me is to make sure that we do not default, but to do so in a way that is as balanced as possible and gets us at least a down payment on solving this problem.” President Obama said in response to a question about the Constitutional argument at a townhall at the University of Maryland.
“We’re going to dispose of this legislation as it needs to be, so that President Obama and the speaker can move forward on a [plan] that will have some revenue in it.” — Senate Majority Leader Harry Reid (D-Nev.)
“It’s a great opportunity for him to talk to young people, to students, about how this is really a debate about the economy and jobs and the need to stabilize the foundation of the economy and creating jobs and lessening the economic anxiety out there, felt by students.” — White House Press Secretary Jay Carney said Thursday aboutr President Obama’s Town Hall at the University of Maryland
- President Obama Discusses Debt Crisis at University of Maryland Town Hall – Transcript — WH, 7-22-11
- Obama stresses need for more tax revenue; Senate rejects House debt plan: President Obama insisted Friday that any broad deficit-reduction plan must include new tax revenue in addition to large spending cuts, and the Senate rejected a bill from the Republican-controlled House that would have required a balanced budget amendment and massive cuts, but no tax hikes.
Speaking at a town hall meeting at the University of Maryland in College Park, Obama told a largely supportive audience, “We can’t just close our deficit with spending cuts alone.” That would mean senior citizens would have to “pay a lot more for Medicare,” students would have trouble getting education loans, job training programs would be trimmed and there were be “devastating cuts” in medical and clean-energy research, he said.
“If we only did it with cuts, if we did not get any revenue to help close this gap . . . then a lot of ordinary people would be hurt, and the country as a whole would be hurt,” Obama said. “And that doesn’t make any sense. It’s not fair. And that’s why I’ve said, if we’re going to reduce our deficit, then the wealthiest Americans and the biggest corporations should do their part as well.”
“This idea of balance, this idea of shared sacrifice, of a deficit plan that includes tough spending cuts but also includes tax reform that raises more revenue, this isn’t just my position,” he said. “This isn’t just a Democratic position. This isn’t some wild-eyed socialist position.” Rather, it argued, it is a position taken in the past by presidents from both parties who have signed major deficit-reduction deals.
“So we can pass a balanced plan like this,” Obama said. “The only people we have left to convince are some folks in the House of Representatives. We’re going to keep working on that.”… – WaPO, 7-22-11
- Obama again presses GOP to move on taxes in debt deal: If President Obama is indeed pursuing a deal with House Speaker John Boehner that would lack an ironclad agreement to boost government receipts, he didn’t show his hand Friday.
At a town-hall-style event at the University of Maryland, Obama again restated his long-standing position that any accord to raise the federal debt ceiling must combine spending cuts with revenue generators stemming from a rewrite of the tax code.
“We can’t just close our deficit with spending cuts alone,” Obama said before a crowd in College Park, Md. “If we only do it with cuts … a lot of ordinary people would be hurt and the country as whole would be hurt.”… – LAT, 7-22-11
- Senate Rejects House Budget Plan; Obama Calls for Deal: The Senate on Friday rejected a House plan to substantially cut government spending and raise the federal debt limit contingent on a balanced budget proposal, leaving Congress up in the air about how to resolve its impasse over the federal debt ceiling and avoid a government default.
Senators voted 51 to 46 along party lines to set aside the measure, known as the “cut, cap and balance” bill, which was sent to the Senate by the House this week and seen by conservative House members as their preferred option for increasing the debt ceiling. For many House Republicans, the legislation was their best offer in the continuing standoff with President Obama and Congressional Democrats.
After the vote, Senator Harry Reid, the Nevada Democrat and majority leader, said the Senate was for the moment abandoning its fallback plan and would not immediately move ahead with a procedural maneuver proposed by Senator Mitch McConnell of Kentucky to increase the debt limit. He said the Senate would instead await the results of negotiations between Mr. Obama and the House speaker, John A. Boehner of Ohio, over a broad deficit reduction package.
“The path to avert default now runs through the House of Representatives,” Mr. Reid said after Democrats voted against the House plan. He said that he was canceling plans to keep the Senate in session over the weekend and that lawmakers would instead reconvene Monday, just more than a week before the Aug. 2 deadline set by the Treasury Department for increasing the $14.3 trillion limit.
Mr. Obama said at a town hall meeting where he was taking questions Friday morning that he was willing to agree to “historic” spending cuts in an effort to trim the nation’s budget deficit, and urged Congressional factions to come together and reach a deal. He said it was not conceivable that the United States would default on its debt.
“This is a rare opportunity for both parties to come together and choose a path where we stop putting so much debt on our credit card,” Mr. Obama said…. – NYT, 7-22-11
- Senate votes down GOP debt ceiling plan: The Senate on Friday defeated the Republican “Cut, Cap and Balance” proposal, a move that puts the onus on President Obama and House Speaker John Boehner to present a plan soon to raise the debt ceiling or risk a potentially catastrophic default.
The procedural vote to kill the measure that was approved by the Republican-controlled House on Tuesday was along party lines in the Democratic-controlled Senate.
“We’re going to dispose of this legislation as it needs to be, so that President Obama and the speaker can move forward on a [plan] that will have some revenue in it,” Senate Majority Leader Harry Reid (D-Nev.) said just before the roll call began.
Friday had been seen as a potentially critical date in the weeks-long budget debate. According to the Treasury Department, lawmakers must agree to a plan that raises the debt limit before Aug. 2 or the federal government could default on its obligations for the first time in the nation’s history…. – LAT, 7-22-11
- John Boehner: Debt talks will make for a “hot weekend here in Washington”: “It’s going to be a hot weekend here in Washington, D.C.,” House Speaker John Boehner said today.
Nevermind that the heat index for the District on Friday is 120 degrees — lawmakers will be sweating in their Washington offices as the clock ticks down toward a possible U.S. default.
The Senate on Friday rejected a Republican plan that would have made raising the debt ceiling contingent on passing a balanced budget amendment. Democratic leaders blasted the plan as bad policy and hardly worthy of consideration. But Boehner said today it’s still the only plan to raise the debt ceiling that he supports.
Calling himself a “happy warrior” on behalf of the GOP plan — dubbed “cut, cap and balance” — Boehner said, “The House has done its job.” The speaker refused to acknowledge the need for an alternative plan. “If [members of the Senate] don’t like our version of ‘cut, cap and balance’… then what’s their plan?” he asked. “They can make amendments and send it back over.”… – CBS News, 7-22-11
- Boehner: ‘We are not close’ to reaching a debt deal with Obama: Speaker John Boehner (R-Ohio) on Friday assured House Republicans that he is not on the verge of striking a deal with the White House to raise the debt ceiling.
“Frankly, we are not close to an agreement,” Boehner said. “I would just suggest it is going to be a hot weekend here in Washington, D.C.”
Boehner told reporters there “never was an agreement” with the White House on a grand bargain.
But he told the GOP conference that the House needs to be prepared to pass something related to the debt ceiling by next Wednesday, according to Rep. Peter King (R-N.Y.) Others in the meeting said Boehner was talking about fall-back options because it would be irresponsible not to.
GOP members on Friday insisted the Senate should amend “Cut, Cap and Balance” and send an alternative back to the House. Boehner claimed two-thirds of the pubic supports the plan, which would cut at least $6 trillion in spending over a decade without revenue increases.
“The House has done its job, and I hope the Senate will do theirs. And if they don’t our version of ‘Cut, Cap and Balance,’ guess what? That is what the legislative process if for. They can amend it, they can change it, they can send it back over to the House,” Boehner said…. – The Hill, 7-22-11
- Democrats, divided (on the debt ceiling): For weeks, the dominant storyline in the ongoing (and ongoing and ongoing) debt limit negotiations has been the fissure between establishment Republicans and the tea party wing of the GOP.
That all changed Thursday when reports began to surface that a deal that would include $3 trillion in spending cuts — including to entitlement programs — was being hashed out by the White House and House Republicans.
Congressional Democrats — as expertly detailed by the Post’s Paul Kane — reacted angrily to the idea, insisting that such a deal would amount to declaring defeat (politically and otherwise) when victory was in sight.
What the episode proves — for the billionth time in the history of politics — is that what’s good for the goose (Obama) is not always good for the gander (congressional Democrats).
What Obama needs and wants out of this protracted debate about the country’s financial future is a deal…. – WaPo, 7-22-11
- US Senate rejects House budget plan: The US Senate this morning rejected a House-backed budget and deficit plan, leaving Congress at a tense impasse over how to solve the nation’s looming debt limit problem before the US Treasury stops paying some of its bills on Aug. 2.
The Senate, along a 51-to-46 party-line vote, used a procedural vote to dispatch with the House-passed “Cut, Cap and Balance” plan, which would cut current spending, cap future spending, and require a constitutional amendment to balance the federal budget.
Senator Scott Brown, the Massachusetts Republican, supported moving forward with the measure. Senator John Kerry, the Massachusetts Democrat, was one of three senators who did not vote on it.
His staff did not immediately respond to a request for comment, but he has railed against the House GOP plan previously.
“ A balanced budget requirement is something we have in Massachusetts, and I think it would be good for the entire country at a time when we are $14.3 trillion dollars in debt and it is rising every day,” Brown said in a statement after the vote. “Now both parties need to come together on a plan that will allow us to avoid default, make substantial cuts in spending, which is reasonable and bipartisan and will have a chance of being signed into law.” “Let’s stop the negative politics and partisan bickering and get down to work,” he added. “Time is running short.”… – Boston Globe, 7-22-11
- Debt Ceiling Uncertainty Puts States at Risk: The federal debt ceiling debate is already complicating life for state and local governments. States whose economies rely on the federal government — including Maryland and Virginia, home to many federal employees and contractors — are at the greatest risk if there is no agreement and Washington has to decide which payments to make and which to skip. They were among the states warned by Moody’s Investors Service this week that their credit ratings were being jeopardized by Washington — which would make it more expensive for them to borrow for costs like construction, through no fault of their own.
Many state and local officials are still hoping that a deal will be reached, averting a situation in which federal payments to the states could start to be cut in August. But a number of states have begun preparing for the worst…. – NYT., 7-22-11
- Obama to talk debt at U-Md. town hall: President Obama will host a town hall meeting at University of Maryland on Friday to make his case for why he is pushing Congress for a “grand bargain” solution, 12 days before the United States faces a potentially catastrophic financial default.
Obama is set to appear at 11 a.m. at the 1,200-seat Ritchie Coliseum in College Park, in front of a mixed crowd of students, faculty and other locals. General admission seats were distributed within about 1 1 / 2 hours after the ticket booth opened, university spokesman Milree Williams said. A few dozen students camped out overnight.
After weeks of intense negotiations with Congress, Obama will tell the audience that now is the time for a major deficit reduction package that includes a mix of spending cuts and tax increases…. – WaPo, 7-22-11
- US debt talks begin critical phase: Efforts to avoid an unprecedented U.S. default enter crunch time on Friday, with President Barack Obama and top lawmakers engaged in a sometimes chaotic drive to strike a sweeping deficit-reduction deal.
With the clock ticking toward an Aug. 2 deadline to raise the U.S. debt ceiling, Obama and the senior Republican in Congress, House Speaker John Boehner, worked toward a plan that could include up to $3 trillion in spending cuts but might leave tax reform for later, congressional aides said.
The main obstacle remained the issue of tax increases that Obama’s Democrats demand and Republicans vehemently oppose. There were conflicting accounts of how and when higher revenue might kick in, and the White House vowed there would be no deal without this.
Negotiations have whipsawed between competing and even conflicting options, and leaders on both sides face resistance within their own ranks to some ideas now gaining traction…. – Reuters, 7-22-11
- Obama, Boehner Press for Broad Deficit Deal Amid Strife: President Barack Obama and House Speaker John Boehner, each facing strife within his own ranks and dwindling time to avert a U.S. default, pressed for a broad agreement to boost the debt limit while cutting spending by trillions of dollars and overhauling the tax code.
Negotiators are “not close to an agreement,” the speaker told reporters after meeting with rank-and-file House Republicans today. “I would suggest it is going to be a hot weekend here in Washington.”
Obama summoned top Democrats to the White House last night after Democrats balked at word of a potential deal between the president and Boehner that would reduce the long-term deficit by about $3 trillion over 10 years through deep spending cuts without an immediate increase in taxes. Democratic lawmakers said they feared the president was moving toward an agreement that undermined their party’s priorities…. – Bloomberg, 7-21-11
JULY 21, 2011: OBAMA & BOEHNER NEAR DEBT DEAL AGREEMENT?
President Obama USA Today Exclusive Op-ed: Go ‘big’ on debt deal: For years now, America has been spending more money than we take in. The result is that we have too much debt on our nation’s credit card — debt that will ultimately weaken our economy, lead to higher interest rates for all Americans, and leave us unable to invest in things like education, or protect vital programs like Medicare.
Neither party is blameless for the decisions that led to this debt, but both parties have a responsibility to come together and solve the problem. That’s what the American people expect of us. Every day, families are figuring out how to stretch their paychecks a little further, sacrifice what they can’t afford, and budget only for what’s truly important. It’s time for Washington to do the same…. – USA Today, 7-21-11
“In order for us to solve the debt and deficit problems, we’ve got to cut spending that we don’t need. We have to eliminate programs that may not be working. We’ve got to make some tough decisions around things like defense spending as well as domestic spending.
But we’re also going to have to have more revenues and we can do that in a way that is not hurting the economy — [and] in fact could potentially help the economy by closing up some loopholes that distort the economy.” — President Obama NPR’s Tell Me More
“There is no deal. We are not close to a deal.” — Jay Carney, White House Press Secretary
“While we are keeping the lines of communication open, there is no ‘deal’ and no progress to report.” — Kevin Smith, a spokesman for Speaker John Boehner
“Frankly, I think it would be irresponsible on behalf of the Congress and the president not to be looking at backup strategies for how to solve this problem. At the end of the day, we have a responsibility to act.” — Speaker John Boehner R-Ohio
“I only know what you know about the agreement — the potential agreement. What I have to say is this: The president always talked about balance. That there had to be some fairness in this. That this can’t be all cuts. There has to be a balance. There has to be some revenue.” — Senate Majority Leader Harry Reid, D-Nev.
“In case Senator Reid didn’t notice, a bipartisan ‘Gang of 234’ just sent him the way forward. It’s called the Cut, Cap, and Balance Act. This is the only plan that can fundamentally solve our debt problem, and it is waiting for Senator Reid to bring up on the Senate floor for an up-or-down vote. The House made its position in the debt debate crystal clear. It’s Cut, Cap, and Balance. — Jim Jordan, R-Ohio, Chairman of the House Republican Study Committee
Obama and Boehner Close to Major Budget Deal, Officials Say: The Obama administration has informed Democratic Congressional leaders that President Obama and Speaker John A. Boehner were starting to close in on a major budget deal that would enact substantial spending cuts and seek future revenues through a tax overhaul, Congressional officials said Thursday.
With the government staring at a potential default in less than two weeks, the officials said the administration on Wednesday night notified top members of Congress that a bargain with Mr. Boehner could be imminent. The Congressional leaders, whose help Mr. Obama would need to bring a compromise forward, were told that the new revenue tied to the looming agreement to increase the debt limit by Aug. 2 would be produced in 2012 through a tax code rewrite that would lower individual and corporate rates, close loopholes, end tax breaks and make other adjustments to produce revenue gains.
- Poll: Sharp Partisan Divide Over Debt Ceiling Deal: With the deadline to broker a debt ceiling deal fast approaching, Americans are craving a solution but remain strongly divided along party lines over how to achieve it, according to a CNN/ORC poll released today.
The poll finds 64% of Americans want a package that includes both spending cuts and tax increases, although the partisan divide is clear: 83% of Democrats and nearly two-thirds of independents support this combined approach, while only 37% of Republicans say they agree. A majority of Republicans and self-described tea party supporters support a plan that only includes spending cuts…. – NY Daily News, 7-21-11
- CNN Poll: Strong partisan divide on debt ceiling: Eighteen percent of people questioned say that if the debt ceiling is not raised, it would cause a crisis, with another 43 percent saying it would create major problems for the country. Three in ten say a failure to raise the debt ceiling would cause only minor problems and six percent say no problems would occur.
As expected, there’s a partisan divide. “Democrats and independents predict that not raising the debt ceiling will create a crisis or major problems in the U.S.” adds Holland. “Roughly half of all Republicans think that will create only minor problems or no problems at all.”
The survey is the sixth poll released over the past week to indicate that a solid majority of the public want any agreement to raise the debt ceiling to include both spending cuts and tax increases. Sixty-four percent of people questioned in the CNN/ORC survey say they want a budget plan with both spending cuts and tax hikes for businesses and higher-income Americans.
Again, there’s a partisan divide, with 83 percent of Democrats and nearly two-thirds of independents but just 37 percent of Republicans and 38 percent of self described tea party movement supports saying they prefer a combined approach. A majority of Republicans and tea party supporters prefer a plan that only includes spending cuts…. – CNN, 7-21-11
- 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.
Thursday’s developments: House Speaker John Boehner predicted a majority of House Republicans will end up supporting some kind of compromise to avoid a government default. Democrats insisted higher tax revenue be part of a deal. And both sides disputed reports that Obama and Boehner were near an agreement on a grand bargain. Hopes for a compromise ran into renewed resistance from Republicans opposed to higher taxes and Democrats hesitant to cut Medicare and other benefit programs. A new backup plan that would cut spending by $1 trillion or slightly more immediately and raise the debt limit by a similar amount appeared to be gaining momentum…. – AP, 7-21-11
- Administration, GOP downplay reports of deal: With time running short to raise the nation’s $14.3 trillion debt limit, President Obama and congressional leaders worked through another tumultuous day of negotiations Thursday with little public progress for weeks of work to reach a compromise that would let the government to keep borrowing money while cutting spending and, perhaps, increasing taxes.
Democratic sources close to the negotiations said the potential agreements discussed by the White House and Republicans include up to $3 trillion in spending cuts over 10 years and a tax code rewrite by the end of 2012 that would bring in up to $1 trillion, also over the course of a decade. The sources spoke on condition of anonymity because they weren’t authorized to speak publicly.
However, administration officials and congressional Republicans spent much of the day downplaying such reports.
“There is no progress to report,” White House press secretary Jay Carney told reporters just 12 days before the Aug. 2 deadline set by the Treasury Department to raise the debt limit or face a first-ever government default on its loans — and, economists and Obama have warned, economic catastrophe…. – USA Today, 7-21-11
- Obama and Boehner close in on plan with savings of $3 trillion: President Barack Obama and the Republican House speaker, John Boehner, once again struggled against resistance from their respective parties Thursday as they tried to shape a sweeping deficit-reduction agreement that could avert a government default in less than two weeks.
Congressional and administration officials said that the two men, who had abandoned earlier talks toward a deal when leaks provoked Republicans’ protests, were closing in on a package calling for as much as $3 trillion in savings from substantial spending cuts and future revenue produced by a tax code overhaul. If it could be sold to Congress, the plan could clear the way for a vote to increase the federal debt ceiling before an Aug. 2 deadline.
But the initial reaction to the still-unfinished proposal hardly suggested a quick resolution. This time, the blowback came mostly from senior congressional Democrats, who are angry at some of Obama’s concessions and at being excluded from the talks.
The president worked to ease concerns from members of his party, inviting Democratic leaders to a nearly two-hour White House meeting Thursday evening.
Obama and Boehner had maintained tight secrecy to prevent a recurrence of the rebellion that stymied their effort earlier this month. With only a few top advisers involved, the news that they were nearing an accord broke after administration officials told Democratic congressional leaders Wednesday night about
the outlines of talks earlier in the day between the president, Boehner and Rep. Eric Cantor of Virginia, the No. 2 House Republican…. – NYT, 7-21-11
- Obama, Boehner’s $3T debt deal bid takes fire from all sides: White House debt talks were described at the “fish-or-cut-bait” stage Thursday night, as President Barack Obama and House Speaker John Boehner sought to keep alive an estimated $3 trillion deficit-reduction package already taking fire from the left and right.
Budget director Jack Lew received a fierce, angry, even screaming reception at the Senate Democratic Caucus, and Democratic congressional leaders were called to the White House to meet with the president for nearly two hours Thursday evening.
At the same time, Boehner felt compelled to go on “The Rush Limbaugh Show” to deny any deal, and the timing is doubly sensitive for the speaker because the Senate is slated to vote Friday on a much tougher House-passed bill that would require Obama to accept twice the spending cuts in return for raising the debt ceiling on Aug. 2.
The Cut, Cap and Balance measure has become a cause célèbre for tea party forces, and Boehner was almost abject in his denials to Limbaugh even as the speaker and the president are desperate for a settlement to avert default.
“Well, Rush, there is no deal,” Boehner told the radio host. “No deal publicly, no deal privately; there is absolutely no deal.”
That’s not to say they aren’t trying…. – Politico, 7-21-11
- Debt-limit talks: As Obama, Boehner rush to strike deal, Democrats are left fuming: President Obama and House Speaker John A. Boehner rushed Thursday to strike agreement on a far-reaching plan to reduce the national debt but faced a revolt from Democrats furious that the accord appeared to include no immediate provision to raise taxes.
With 12 days left until the Treasury begins to run short of cash, Obama and Boehner (R-Ohio) were still pursuing the most ambitious plan to restrain the national debt in at least 20 years. Talks focused on sharp cuts in agency spending and politically painful changes to cherished health and retirement programs aimed at saving roughly $3 trillion over the next decade.
More savings would be generated through an overhaul of the tax code that would lower personal and corporate income tax rates while eliminating or reducing an array of popular tax breaks, such as the deduction for home mortgage interest. But the talks envisioned no specific tax increases as part of legislation to lift the debt limit, and the tax rewrite would be postponed until next year.
Democrats reacted with outrage as word filtered to Capitol Hill, saying the emerging agreement appeared to violate their pledge not to cut Social Security and Medicare benefits as well as Obama’s promise not to make deep cuts in programs for the poor without extracting some tax concessions from the rich.
When “we heard these reports of these mega-trillion-dollar cuts with no revenues, it was like Mount Vesuvius. . . . Many of us were volcanic,” said Sen. Barbara A. Mikulski (D-Md.).
White House budget director Jacob J. Lew denied that a deal without taxes was in the works. “We’ve been clear revenues have to be part of any agreement,” he told reporters…. – WaPo, 7-21-11
- Democrats erupt over latest plan on debt ceiling: Many worry that Obama might retreat from his demand that revenue increases, opposed by Republicans, be part of any plan to slash the federal deficit…. – LAT, 7-21-11
- Obama, Boehner — Deal? No deal?: There’s a report that President Obama and House Speaker John Boehner are “close” to a debt deal, but the principals deny it.
After The New York Times posted a headline that said “Obama and Boehner Close to Major Budget Deal, Congressional Leaders Are Told,” House Speaker John Boehner, R-Ohio, tweeted: “False.”
At the White House, Obama spokesman Jay Carney said bulletins are “incorrect — there is no deal, we are not close to a deal.”
Carney said there are no meetings scheduled between Obama and any other congressional leaders, but that could change. “As you know,”‘ Carney said, “this is a fluid situation.”
The Times reported that “the Obama administration has informed Democratic Congressional leaders that President Obama and Speaker John A. Boehner were starting to close in on a major budget deal that would enact substantial spending cuts and seek future revenues through a tax overhaul, Congressional officials said Thursday.”
White House communications director Dan Pfeiffer tweeted: “Anyone reporting a $3 trillion deal without revenues is incorrect. POTUS believes we need a balanced approach that includes revenues.”
In his tweet, Boehner urged the Senate to sign off on the House Republican plan known as “cut, cap and balance.”… – USA Today, 7-21-11
- Boehner and Obama Nearing Budget Deal, Leaders Told: The Obama administration has informed Democratic Congressional leaders that President Obama and Speaker John A. Boehner were starting to close in on a major budget deal that would enact substantial spending cuts and seek future revenues through a tax overhaul, Congressional officials said Thursday.
With the government staring at a potential default in less than two weeks, the officials said the administration on Wednesday night notified top members of Congress that an agreement between the president and Mr. Boehner could be imminent. The Congressional leaders, whose help Mr. Obama would need to bring a compromise forward, were told that the new revenue tied to the looming agreement to increase the debt limit by Aug. 2 would be produced in 2012 through a tax code rewrite that would lower individual and corporate rates, close loopholes, end tax breaks and make other adjustments to produce revenue gains.
Officials knowledgeable about the conversations between the administration and Congressional leaders said the details of the potential package remained unknown but they presumed it would include cuts and adjustments in most federal programs, including Medicare.
However, officials on all sides of the tense negotiations warned that no firm deal was in hand yet, and tried to play down the progress — if only to stave off attempts to block it or influence its shape by hardliners on both sides of the debate on taxes and spending.
“While we are keeping the lines of communication open, there is no ‘deal’ and no progress to report,” said Kevin Smith, a spokesman for Mr. Boehner.
The White House denied that any deal is imminent. Jay Carney, the White House press secretary, said that “there is no deal. We are not close to a deal.”… – NYT, 7-21-11
- Obama: Time to do ‘something big and meaningful’: President Barack Obama insists the negotiations to raise the nation’s debt limit gives him and Congress “the opportunity to do something big and meaningful” to reduce the government’s long-term deficits.
Obama says he is willing to cut “historic amounts of spending” and says that should be coupled with more revenue from “fundamental tax reform.” The president expressed himself in an opinion piece that appeared Thursday evening on USA Today’s website…. – AP, 7-21-11
- No debt ceiling deal, White House says: Talks between President Obama and congressional leaders are focusing on a possible $3 trillion deficit reduction deal that would accompany a debt ceiling increase, congressional aides told CNN on Thursday.
The aides, who spoke on condition of not being identified, said the possible deal remained in limbo over disagreement on whether to extend Bush-era tax cuts for families earning more than $250,000 a year, and nothing has been agreed to yet.
The possible deal would include spending cuts expected to total $1 trillion or more that were agreed to in earlier negotiations led by Vice President Joe Biden, the sources said. It also would reform entitlement programs by changing the eligibility age for Medicare over time and using a more restrictive inflation index for Social Security benefits, according to the sources.
On taxes, it would permanently extend the Bush era tax cuts for families earning less than $250,000 while allowing the cuts to expire at the end of 2012 for those earning more than that, the aides said. At the same time, the deal would include a commitment to reform the tax code next year, which is expected to lower all tax rates and eliminate loopholes and subsidies, the sources said…. – CNN, 7-21-11
- White House and House Speaker shoot down report that debt deal reached: Both the White House and House Speaker John Boehner shot down a report from the New York Times today that lawmakers in Washington are close to reaching a significant deal for raising the debt ceiling and reducing the deficit.
“There is no deal, we are not close to a deal,” White House Press Secretary Jay Carney said today. “The fact is there is no progress to report,” but President Obama and congressional leaders are still working on “getting the most significant deal possible.”
Lawmakers have until August 2 to raise the legal limit the U.S. government is allowed to borrow — which currently stands at $14.3 trillion — before the U.S. risks defaulting on its loans.
While he said they’re not close to a deal, Carney said the White House is “absolutely confident that the debt ceiling will be raised.”… – CBS News, 7-21-11
- Boehner: House will compromise on debt limit: House Speaker John Boehner predicted Thursday that a majority of House Republicans will end up supporting some kind of compromise to avoid a government default. Democrats insisted that higher tax revenue be part of a deal.
White House budget chief Jacob Lew told reporters at the Capitol that “I’m unaware of a deal” between President Barack Obama and congressional Republicans and he repeated that “we’ve made clear revenues have to be included.”
All sides pushed against media reports that Obama and House Speaker John Boehner, R-Ohio, were near an agreement on a grand bargain trading $3 trillion or so in spending cuts and a promise of $1 trillion in tax revenues through a later overhaul of the tax code as part of a deal to extend the government’s borrowing authority…. – AP, 7-21-11
- Obama, Boehner discuss possible $3 trillion in cuts: aide: President Barack Obama and House Speaker John Boehner are discussing a possible deal that would include $3 trillion in spending cuts over 10 years to avert an unprecedented U.S. default, a senior Democratic congressional aide said Thursday.
Their potential agreement would include a promise of tax reform in 2012, the aide said…. – AP, 7-21-11
- ‘Gang of Six’ Debt Ceiling Plan is DOA in House: The so-called “Gang of Six” plan has hit the U.S. House of Representatives with a resounding “thud.” There are a number of problems with it, the least of which is that it is not really a plan at all. Rather, it is an outline of a framework of a concept of a deal, one that would raise taxes considerably without doing very much, if anything, to bring spending under control.
The problem with deals of this sort, and we’ve seen them before, is that the new taxes, new revenues, and new spending all seem to kick in right away while the promised spending cuts, which always are set to go into effect in the so-called “out years” never seem to go into effect at all. [Read the U.S. News debate: Should Congress raise the debt limit?]
Senate Democratic Leader Harry Reid, who really hasn’t proposed much of anything up to now, asked his colleagues in the U.S. House Wednesday to send him a “path forward” in the debt debate.
Reid is playing political games—which he can do since he alone controls the Senate floor, where it is unlikely he will bring the Senate version of “Cut, Cap, and Balance” up for a vote, lest it pass…. – US News, 7-21-11
- Obama’s birthday wish: ‘A debt ceiling deal’: President Obama, who will turn 50 on Aug. 4, says he wants a special birthday present: “a debt ceiling deal.”
Obama told NPR’s Tell Me More program in an interview to be broadcast Friday that a proposal by the Senate’s “Gang of Six” underscores the value of a “balanced” approach to debt reduction.
The $3.7 trillion deal features “Republican senators acknowledging that revenues need to be part of a balanced package,” Obama told NPR’s Michel Martin. “And you had Democratic senators acknowledge that we’re going to have to make some difficult spending cuts.”… – USA Today, 7-21-11
- She’s b-a-a-c-k! GOP may need Nancy Pelosi to pass debt-ceiling deal: At times she has looked to be an afterthought, a relic of a bygone era. Republicans haven’t bothered to court her. And the White House, at times, has appeared to ignore her. But now they’re going to need Nancy Pelosi.
As the clock ticks down toward a possible government default, it appears to be less and less likely that a package can be crafted that will appease the large bloc of House conservatives who either oppose raising the debt ceiling on principle or won’t vote to hike it without massive cuts in federal spending. That means that Pelosi, the former speaker who presides over a shrunken Democratic minority in the House, likely will come into play. Any plan that passes the Senate, be it the fallback option by Senate Minority Leader Mitch McConnell or a more ambitious proposal like the one being crafted by the so-called Gang of Six, will only be able to pass the House if Democratic votes push it over the finish line.
So there Pelosi was Thursday, at a news conference at the Capitol, taking questions, mixing it up, almost like the old days had returned. She seemed to be in good spirits and enjoying the moment, even taking a few cracks at the George W. Bush administration for good measure. “We all have an obligation to prevent our country from going into default,” Pelosi said.
The Californian hasn’t been in this position very often this year. The Republican rout last November crippled Democrats in the House. She surprised many by deciding to stay on as minority leader, choosing to remain a lonely progressive voice in a chamber swept by “tea party” fever. The large GOP majority means that Democrats are rarely a legislative factor — and Pelosi has lost her status as conservatives’ Public Enemy No. 1.
That also has meant that the White House hasn’t had much use for her either. Earlier this month, she appeared blindsided by reports that President Obama was considering tinkering with Medicare and Social Security as a means of reaching a deficit-reduction deal with Speaker John Boehner. But she quickly became a ringing voice on the left pushing back on the proposal.
Most of the talks at the White House have been built around the dynamic between Obama and Boehner, with Senate leaders Harry Reid and McConnell serving in supporting roles. Pelosi, while present, didn’t seem to have a card to play.
Now she does. The GOP holds 241 seats in the House; it takes 218 to pass a bill. Already, 80 or so Republicans have signed off on a letter condemning the McConnell plan, which employs a procedural maneuver that allows the debt ceiling to be raised while giving Republicans a chance to vote against it with no consequences…. – LAT, 7-21-11
- Pressure mounts for debt deal, talk of progress: A possible deal was on the table to save the United States from an unprecedented debt default, congressional aides said on Thursday as Republicans came under mounting pressure to make concessions.
Two senior Democratic congressional aides said President Barack Obama and the top Republican in Congress, John Boehner, were working on a deal that would include $3 trillion in spending cuts over 10 years but leave tax reform for later.
Obama, in an interview with National Public Radio, said any deal must include some tax increases alongside defense and other spending cuts. “We’re also going to have to have more revenues and we can do that in a way that is not hurting the economy (and) in fact could potentially help the economy by closing up some loopholes that distort the economy,” Obama said in excerpts of the interview released by NPR…. – Reuters, 7-21-11
- Debt talks have senators angry about being left out: The White House faced a near rebellion from senators who were blindsided by word of a possible deal between President Barack Obama and House Speaker John Boehner, with Democrats worried the president would cave on taxes while Republicans complained about being left in the dark on a potentially historic deficit plan.
Furious Democrats directed their ire squarely at Obama’s budget director, Jack Lew, at a closed-door lunch meeting, while Republicans peppered their leaders with questions about the possibility of being jammed into a multitrillion-dollar bill with virtually no time for review.
The frustration was evident in virtually all corners of the Senate on Thursday as it became increasingly possible that the body where landmark deals are usually made could effectively be left out of this one…. – Politico, 7-21-11
- President’s debt offer: risky but could be win-win: It’s hard to know which is more surprising: a Democratic president pushing historic cuts in spending, including Social Security and Medicare. Or a Republican-controlled House refusing to accept the deal and declare a huge victory for long-sought GOP goals.
Political orthodoxy has been turned on its head ever since President Barack Obama stepped up his call for a bipartisan “grand bargain” to raise the national debt ceiling and avert a default on U.S. obligations. The deal would include $4 trillion in deficit reduction over 10 years, mainly through steep spending cuts but also including up to $1 trillion in new federal revenue.
Those are far bigger targets than typical budget negotiations. And the spending cuts would seem more appropriate for a Republican president than a Democrat.
Some pundits and political insiders say Republicans should leap at the offer. But there’s a hitch: The new revenue — mainly from overhauling the tax code and lowering rates by eliminating or limiting a broad swath of loopholes, deductions and tax breaks — presumably would violate a no-net-tax-hike pledge that scores of Republican lawmakers have signed.
Mostly for that reason, House Republicans so far have rejected Obama’s overture, despite the interest shown by Speaker John Boehner. Some pro-Republican analysts seem bewildered.
Obama’s offer of big spending cuts would have “brutally fractured the Democratic Party,” and congressional Republicans probably “will come to regret this missed opportunity,” wrote David Brooks, a moderate-to-conservative columnist for The New York Times…. – AP, 7-21-11
- Obama, House Republicans in endgame in debt talks: In secretive endgame negotiations, President Barack Obama and House Republican leaders reached anew on Thursday for an elusive “grand bargain” deal to cut deficits by $4 trillion or more and prevent a government default, officials said.
House Speaker John Boehner declared that his rank and file generally stood ready to compromise in order to reach an agreement as a way of “getting our economy going again and growing jobs.” Obama, in a newspaper opinion piece, said the talks provided an “opportunity to do something big and meaningful.”
Still, 12 days before the default deadline, officials stressed that no compromise appeared imminent and that significant differences remained. And new hope of one ran instantly into old resistance: from Republicans opposed to higher taxes and Democrats loath to cut Medicare and other benefit programs…. – AP, 7-21-11
- WaPo, 7-21-11
- WaPo, 7-21-11
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
- Debt Compromise Pressure Intensifies, Obama to Resume Talks: A bipartisan Senate proposal for a $3.7 trillion debt-cutting plan praised by President Barack Obama faces resistance from House Republicans, as lawmakers intensify efforts for a compromise on government spending less than two weeks before a threatened default.
Obama said he will renew talks at the White House this week with congressional leaders as the Democratic-led Senate and Republican House pursue divergent paths toward ending the stalemate over lifting the nation’s $14.3 trillion debt limit.
“The problem we have now is we’re in the 11th hour and we don’t have a lot more time left,” Obama said yesterday, referring to an Aug. 2 deadline officials have set for raising the debt cap. The president, in remarks at the White House, said he will urge congressional leaders “to start talking turkey” and get “down to the hard business of crafting a plan that can move this forward.”
House Republicans last night passed their debt-reduction plan 234-190 — legislation that stands little chance of passing the Senate and that Obama has said he would veto if it did. The measure would cut and cap government spending and allow the debt ceiling to be raised by $2.4 trillion only if Congress approves a balanced budget amendment to the Constitution…. – Bloomberg, 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 –
JULY 19, 2011: CONGRESS VOTES ON & PASSES DEBT PLAN — SENATE GANG OF SIX’S COMPROMISE PLAN
Obama calls new Senate plan a ‘very significant step’ in debt talks: President Obama on Tuesday praised a new bipartisan plan emerging in the Senate, calling it “broadly consistent” with the White House’s approach to raising the debt limit and describing it as a “very significant step.” “We’re in the same playing field,” he said.
“The framework that they put forward is broadly consistent with the approach that I’ve urged.” — President Barack Obama to reporters, understating his satisfaction at the credibility the bipartisan proposal lent to his plan.
Mitch McConnell: Republicans have tried to persuade the President of the need for a serious course correction, but weeks of negotiations have shown that his commitment to big government is simply too great to lead to the kind of long-term reforms we need to put us on a path to balance and economic growth. So we’ve decided to bring our case to the American people.
Washington Post-ABC News poll: Obama, Republicans viewed as not willing enough to compromise on debt ceiling: Majorities of Americans see both President Obama and congressional Republicans as not being willing enough to compromise in their stalemated budget negotiations, but the public sees the GOP leaders as particularly intransigent, according to a new Washington Post-ABC News Poll. There is also growing dissatisfaction among Republicans with the hard-line stance of their congressional representatives: 58 percent now say their leaders are not doing enough to strike a deal, up from 42 percent in March.
- President Obama on Deficit Talks: “We’re in the 11th Hour” — WH, 7-19-11
- House approves GOP debt reduction bill: The House of Representatives on Tuesday passed a Republican-backed plan to extend the nation’s borrowing capacity in return for a cap on future government spending and a balanced budget amendment.
The proposal would cut spending by $111 billion in 2012 and cap future outlays to 19.9% of the nation’s gross domestic output. It also would require that Congress send a balanced-budget constitutional amendment to the states for ratification, a lengthy process.
Some Republicans who voted no did so because they oppose any increase in the debt ceiling, even with spending cuts…. – LAT, 7-19-11
- ‘Gang of Six’ revives hope for big deal in stalled debt-ceiling talks: President Obama’s hopes for a ‘grand bargain’ both to raise the debt ceiling and rein in the deficit got a boost Tuesday when the Senate’s ‘Gang of Six’ proposed $3.7 trillion in deficit reductions…. – CS Monitor, 7-19-11
- ‘Gang of Six’ plan hailed as debt-ceiling breakthrough. What’s in it?: The proposal by the ‘Gang of Six’ senators Tuesday draws on ideas from the deficit commission. The middle-of-the-road plan will have to overcome partisan concerns and a lack of time…. – CS Monitor, 7-19-11
- 6 senators push bipartisan plan to cut deficit: The bipartisan “Gang of Six” senators on Tuesday offered a major plan to cut the deficit by almost $4 trillion over the coming decade, but whether it can break through the budget debate will depend on whether Republican lawmakers can find a way to endorse more than $1 trillion in new tax revenues reaped as Congress overhauls the loophole-choked U.S. tax code.
The plan would also repeal a new long-term care program established under last year’s health overhaul and force an additional $500 billion in cuts from federal health care programs over the upcoming decade, according to documents provided to senators but not publicly released.
The Gang of Six plan is separate from a politically freighted effort to lift the nation’s borrowing cap and avoid a first-ever default on U.S. obligations. President Barack Obama and Capitol Hill Republicans, however, have failed to reach an accord on what kind of spending cuts to pair with any increase in the borrowing cap.
The six senators are Tom Coburn, R-Okla., Mike Crapo, R-Idaho, Saxby Chambliss, R-Ga., Kent Conrad, D-N.D., Mark Warner, D-Va., and Dick Durbin, D-Ill.
Their plan calls for an immediate $500 billion “down payment” on cutting the deficit as the starting point toward cuts of more than $4 trillion over the coming decade that would be finalized in a second piece of legislation. Most of those savings would come from four years of caps imposed on the day-to-day budgets of Cabinet agencies set by the annual appropriations bills.
Depending on how one keeps score, the measure would save between $3.7 trillion and $4.7 trillion over the coming decade. The lower figure is measured against a lower spending “baseline” based on a fiscal 2011 budget law enacted earlier this year. But if measured against Obama’s request for the current 2011 budget year — the standard used by the fiscal commission — the plan would save the higher figure…. – AP, 7-19-11
- Bipartisan Plan for Budget Deal Buoys President: President Obama seized on the re-emergence of an ambitious bipartisan budget plan in the Senate on Tuesday to invigorate his push for a big debt-reduction deal, and he summoned Congressional leaders back to the bargaining table this week to “start talking turkey.”
The bipartisan proposal from the so-called Gang of Six senators to reduce deficits by nearly $4 trillion over the coming decade — and its warm reception from 43 other senators of both parties — renewed hopes for a deal days after talks between Mr. Obama and Congressional leaders had reached an impasse.
Financial markets rallied on the news. And with time running out before the deadline of Aug. 2 to raise the government’s $14.3 trillion debt ceiling, Mr. Obama’s quick embrace of the plan left House Republicans at greater risk of being politically isolated on the issue if they continue to rule out any compromise that includes higher tax revenues.
Representative Eric Cantor, the House majority leader who has led opposition to any deal including tax increases, later issued a statement saying the bipartisan Senate plan includes “some constructive ideas to deal with our debt.”…. – NYT, 7-20-11
- Gang of Six back from the brink: Tom Coburn reveals his ‘Back in Black’ plan to reduce the federal deficit, Monday, July 18, 2011, during a news conference. | AP Photo Coburn told the group that he was ‘back,’ which prompted a round of applause.
The once moribund Senate “Gang of Six” gained new life Tuesday after Oklahoma Sen. Tom Coburn unexpectedly rejoined the group and President Barack Obama praised a new effort to cut the debt by as much as $3.7 trillion over the next decade.
Speaking at the White House Tuesday afternoon, Obama gave the Gang of Six a big boost, saying its proposals were “roughly” in line with his negotiations during the stalled debt-ceiling talks. But he said there would need to be broader buy-in to the proposal and he said Congress needed to have “fail-safe” plan, being drafted by Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell, to avert a default. “I think we’re now seeing a potential for a bipartisan consensus,” Obama told reporters.
Other top senators are also getting behind the plan, including Sen. Lamar Alexander (R-Tenn.), the No. 3 Senate Republican, who told a group of senators Tuesday he would back the Gang of Six’s proposal, sources say. The fast-moving developments mean that elements of the proposal could influence the stalled talks to raise the debt-limit before the Aug. 2 deadline.
The Republican led House, which is on the verge of voting on the conservative “Cut, Cap and Balance” plan that has little chance of passing the Senate, remains a tough sell on the Gang of Six.
The House Republican leadership staff is reviewing the Gang of Six proposal, but has several concerns, according to aides….. – Politico, 7-20-11
- Short-term debt limit extension an option, Obama says: President Barack Obama would support a short-term extension of the debt limit if Democrats and Republicans reach agreement on a broader deficit-cutting deal but need more time to move it through Congress, White House Press Secretary Jay Carney said Wednesday.
“If both sides agree to something significant, we will support the measures needed to finalize details,” Carney said.
By loosening the president’s opposition to a short-term extension, the White House ups the pressure on Congress to seriously consider a bipartisan Senate proposal released Tuesday.
The $3.7 trillion plan offered by the “Gang of Six” received largely positive reviews from both parties, but Senate leaders questioned whether there is enough time before the Aug. 2 deadline to put the framework into legislative language, receive a cost estimate from the Congressional Budget Office and round up support.
Additionally, Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) have never been enthused by the Gang of Six, concerned that rank-and-file members would cut a budget deal that muddied their respective party’s 2012 campaign strategies. For Republicans, the “Gang of Six” plan would mean a package that included new revenues, and for Democrats, a willingness to make serious changes to entitlement programs.
Obama spoke by phone Tuesday night with House and Senate leaders, and he’s scheduled to meet Wednesday afternoon with Democratic leaders. It is unclear when he will sit down again with Republicans…. – Politico, 7-20-11
- Republicans and Democrats praise ‘Gang of Six’ debt reduction plan: On Tuesday morning the so-called “Gang of Six” unveiled a revamped version of their debt-reduction plan, which could become the breakthrough Congress has been waiting for. The group, which began working on debt talks weeks ago, also welcomed back Sen. Tom Coburn of Oklahoma. Coburn quit the group in May.
The new plan offered by the Gang reduces the federal deficit by $3.7 trillion over the next decade, and increases revenues by $1 trillion through reforms in the tax code.
Coburn praised the plan on Tuesday, saying it has a good chance of garnering the support of at least 60 Senators.
The plan was negotiated by the Gang, sans Coburn: Democrat Sens. Kent Conrad of North Dakota, Mark Warner of Virginia, and Dick Durbin of Illinois, and Republican Sens. Saxby Chambliss of Georgia and Mike Crapo of Idaho.
The group presented the plan during a meeting where more than 50 Senators were in attendance. Afterward, both Republicans and Democrats alike praised the proposal…. – The Daily Caller, 7-19-11
- Boehner considers alternatives to GOP debt plan: House Speaker John Boehner says he is considering alternative budget plans even as the House takes up a GOP proposal to cap spending and eventually require a balanced budget.
Speaking at a Tuesday press conference, Boehner said his preference is to pass the House GOP plan, which would increase the government’s ability to borrow but only after Congress passes a balanced budget constitutional amendment.
The House is scheduled to vote on the plan Tuesday. But, Boehner said, “I do think it’s responsible for us to look at what Plan B would look like.”… – AP, 7-19-11
- Bill Clinton: I Would Use 14th Amendment To Raise The Debt Ceiling: With the deadline to raise the debt ceiling just two weeks away, former President Bill Clinton said that if he were in President Obama’s shoes, he would use the 14th amendment to raise the debt ceiling “without hesitation.” Clinton told The National Memo’s Joe Conason that he would invoke the constitutional option and “force the courts to stop me” if “it came to that” and a deal could not be reached with Congress.
“I think the Constitution is clear and I think this idea that the Congress gets to vote twice on whether to pay for [expenditures] it has appropriated is crazy,” Clinton said.
Clinton said lifting the debt ceiling “is necessary to pay for appropriations already made” by Congress. “You can’t say, ‘Well, we won the last election and we didn’t vote for some of that stuff, so we’re going to throw the whole country’s credit into arrears,” he added.
Despite saying he would raise the debt ceiling without congressional legislation, Clinton thinks the issue will be resolved by the August 2 deadline. “It looks to me like they’re going to make an agreement, and that’s smart,” he said. – ABC News, 7-19-11
- House set to vote on GOP debt cutting measure:
The House is to vote Tuesday on a “cut, cap, and balance” plan favored by conservatives
Members of the “Gang of Six” are to present their own debt reduction plan Tuesday
Leaders are working on a fallback plan initially proposed by the Senate minority leader
The United States must raise its $14.3 trillion debt ceiling by August 2 or risk a default
The Republican-controlled House of Representatives is set to vote Tuesday on a measure that would impose strict caps on all future federal spending while making it significantly tougher to raise taxes — the solution favored by hard-line conservatives to the current debt ceiling crisis.
The so-called “cut, cap and balance” plan has virtually no chance of clearing the Democratic-controlled Senate or overcoming a promised presidential veto. It would, however, allow Republicans to clearly demonstrate their preference for steps favored by many in the tea party movement even as their leadership seeks a middle ground with Democrats.
Top administration and congressional officials have been actively exploring a fallback plan proposed by Senate Minority Leader Mitch McConnell, R-Kentucky, that would raise the debt ceiling by up to $2.5 trillion through the 2012 election and avoid a potentially devastating default next month.
At the same time, a bipartisan group of senators who worked for months to forge an agreement is scheduled Tuesday to unveil their plan to slash trillions of dollars off the debt over the next decade. The “Gang of Six” members will reveal their plan privately to a group of 40 to 50 senators…. – CNN, 7-19-11
- Symbolic House vote on debt ceiling approaches: The Republican proposal calls for deep spending cuts. Negotiations to avert a federal default continue behind the scenes.
The House prepared to vote on a Republican proposal to raise the debt ceiling in exchange for steep spending cuts, in defiance of President Obama’s vow to veto the bill if it passed both chambers of Congress.
The standoff underscored the largely symbolic nature of the Republican measure amid ongoing behind-the scenes negotiations to avert a federal default.
The talks revolved around a Senate-led plan to let Obama act alone to increase the debt ceiling through 2012. The plan also would include as much as $1.5 trillion in budget cuts identified by Republican and Democratic negotiators after weeks of closed-door debate…. – LAT, 7-19-11
- GOP’s Plan for Debt Reform: Win in 2012, Senate GOP Doesn’t Believe Obama on Big Debt Deal:
“There’s only one thing that is going to change the long-term trajectory on debt and spending in the federal government: the next election.” — Aide to a Senate Republican leader to Power Play on the way forward on debt-ceiling negotiation
As the chances for a big deal on debt and deficits evaporate in the heat of deadline negotiations, fiscal hawks are growing increasingly frustrated.
Sen. Tom Coburn, R-Okla., is releasing his “Back in Black” plan for massive debt reduction and four of his former compadres from the Gang of Six are rolling out their less-ambitious deficit plan.
House Republicans, meanwhile, are pushing through the conservative-backed proposal for deep cuts now, spending caps later and a balanced budget amendment farther down the road.
None of these big-ticket items seem to be going anywhere before a projected government shutdown begins sometime in the next few weeks, so why bring them up now?
Part of it is the hope for a miraculous ending to this months-long debate in which a very liberal president and very conservative members of Congress decide to ditch their dogmas in the name of bipartisan compromise. It’s never happened before, but hey, there’s a first time for everything, right?
Part of it is the desire to be able to say “I told you so” when the grubby, short-sighted final product is produced. By putting a plan out now, lawmakers can take the high ground later on. “My plan would have tripled the [cuts/taxes on millionaires and billionaires/savings/etc.] compared to the compromise package.”… – Fox News, 7-19-11
- Analysis: McConnell plan may be reckoning for Republicans: Senator Mitch McConnell’s plan to avert an imminent U.S. debt default could lead to a day of reckoning for his Republicans as they weigh the prospect of fiscal disaster against the demands of Tea Party activists. With other efforts to raise the federal government’s debt ceiling at a standstill, McConnell’s “Plan B” to avoid default is increasingly seen as “Plan A” in Washington.
The proposal by the top Republican in the Senate would dump the task into the laps of President Barack Obama and his Democrats, forcing them to back a $2.4 trillion increase in borrowing before the November 2012 elections as recession-weary voters worry about the country’s growing mountain of debt. Pinning the debt increase on Obama and the Democrats could help McConnell pick up the four seats needed to win Republican control of the Senate and further his stated goal of making Obama a one-term president. It also may ensure his party avoids getting blamed for an August 2 default that could push the United States back into recession and upend financial markets across the globe.
Surprisingly, Democrats have embraced the plan as the best possible way to get an increase in the debt ceiling through a divided Congress. Obama could also turn the situation to his advantage. “Obama’s answer (could be) that Republicans in Congress didn’t step up and deal with this so I’m making the tough decisions and showing leadership,” said Jennifer Duffy, an analyst with the Cook Political Report.
The Democratic-controlled Senate is expected to pass the McConnell measure if it comes up for a vote this week, but prospects are less certain in the Republican-controlled House of Representatives…. – Reuters, 7-19-11
- Group of House Republicans Aim to Stop McConnell Debt-Ceiling Plan: A group of House Republicans is moving to try and upend an effort by Senate Minority Leader Mitch McConnell (R., Ky.) to give President Barack Obama more power to raise the government’s borrowing authority, complicating efforts by the White House to broker a deal before the government begins defaulting on its obligations after Aug. 2.
Rep. Joe Walsh (R., Ill.) circulated a letter to other House Republicans Monday that urges House Speaker John Boehner (R., Ohio) and Rep. Eric Cantor (R., Va.) not to bring Mr. McConnell’s proposal to the House floor for a vote…. – WSJ, 7-19-11
- Reed demands Obama produce deficit plan: Rep. Tom Reed, R-Corning, today led several dozen House Republicans in demanding that President Obama release a detailed deficit reduction plan as the nation moves perilously closer to reaching its debt ceiling on Aug. 2.
“Because you have not presented any written detailed proposal to raise the debt ceiling, our constituents are left in the dark as to what specific cuts you propose as well as what taxes you are planning to raise,” Reed wrote in the letter to the president, which 64 other members of Congress co-signed.
“It is regrettable that we have reached this point, but the time for blame is long past,” Reed said. “This is not a partisan crisis. It is a national crisis. However, we remain optimistic that the current negotiations give us an unusual opportunity to ensure we put our country on a path to fiscal solvency once and for all.”… – Buffalo News, 7-19-11
- Developments in U.S. debt talks: The House of Representatives is set to vote on the Republican “cut, cap and balance” plan that calls for immediate spending cuts and capping the level of federal spending at a percentage of the economy — 18 percent by 2021. The largely symbolic measure sets the stage for the Republican-controlled House to consider a constitutional amendment requiring a balanced federal budget.
House Speaker John Boehner and other House Republican leaders will hold a news conference at 10 a.m. EDT (1400 GMT) to discuss the debt limit after a closed-door meeting of Republican members of the House.
House Democratic Whip Steny Hoyer is likely to discuss the status of debt negotiations at a weekly news briefing after a closed-door meeting of House Democrats. The news conference is set for 11:30 a.m. EDT (1530 GMT)…. – Reuters, 7-19-11
- Congress to vote on plans to cut, balance budget: Congress plans two largely symbolic but politically significant votes starting today on proposals that conservative groups vow will be remembered during the 2012 elections: a plan to slash federal spending and a balanced budget amendment to the Constitution.
But the real action continues to be behind the scenes, where the White House and congressional leaders are frantically trying to work out a deal that will raise the federal debt limit while cutting future federal budget deficits. Senate Majority Leader Harry Reid, D-Nev., said Monday that until a deal is done, the Senate will stay at work seven days a week. “The Senate will stay in session every day, including Saturdays and Sundays, from now until Congress passes legislation that prevents the United States from defaulting on our obligations,” he said.
Meanwhile, the coming two votes are significant for a couple of reasons – one political, one tactical. Supporters will feel a strong political wind at their backs: A well-funded network of conservative groups is spotlighting the votes as defining ones…. – McClatchy Newspapers, 7-19-11
- In Debt Crisis, a Legislative Trick Up the Sleeve: With Republicans and Democrats still deeply divided over how to shrink the budget deficit and the national debt, the only way for them to avoid a financial crisis at this late date may be to perform a legislative magic trick. The idea, conjured by Senator Mitch McConnell of Kentucky, the Republican leader, would allow Republicans to accede to an increase in the government’s debt limit without actually voting for it or giving in to President Obama’s demand for tax increases as part of any deal. It would give the White House a way out of the box that it is in and avert a potential deeper blow to the economy. And it would allow Democrats to head into an election year having backed substantial spending cuts without having, so far, buckled to pressure to bite into the entitlement programs that represent core values to many liberal voters.
That, at least, is the goal of the approach offered last week by Mr. McConnell, who continued to work with Senator Harry Reid, the Democratic majority leader, on Monday to refine their fallback proposal even as the parties exchanged fire leading up to coming floor fights in the House and Senate over a Republican deficit-reduction plan. The Senate leaders are developing cuts and other deficit-reduction provisions to provide some lubricant to pass the measure, which has been ridiculed by many Republicans as a slick effort to dodge accountability.
While negotiations continued, House and Senate Republicans plan to focus their energy this week on the so-called cut, cap and balance proposal embraced by conservatives. It would reduce spending next year by more than $100 billion, cap future spending based as a percentage of the economy and require a balanced-budget amendment to be approved by Congress and sent to the states for ratification before the debt limit could be increased.
Before the House debate scheduled for Tuesday even began, the administration issued a veto threat on behalf of Mr. Obama, who on Sunday had a private meeting at the White House with the two top House Republicans — Speaker John A. Boehner of Ohio and Representative Eric Cantor of Virginia, the majority leader.
“The bill would undercut the federal government’s ability to meet its core commitments to seniors, middle-class families and the most vulnerable, while reducing our ability to invest in our future,” the White House said in a statement. It said the measure “would set unrealistic spending caps that could result in significant cuts to education, research and development, and other programs critical to growing our economy and winning the future.”… – NYT, 7-18-11
JULY 18, 2011: BIPARTISAN SENATE DEBT PLAN EMERGES
“We’re making progress. We can’t let politics stand in the way of doing the right thing.” — President Barack Obama
- USA Today/Gallop Poll: Low ratings for Obama, Congress on debt talks: Half of Americans surveyed in a USA TODAY/Gallup Poll say President Obama and Congress are doing a worse job than their predecessors in dealing with the nation’s problems. Four in 10 call it the worst they’ve seen in their lifetimes.
At least two-thirds say congressional Republicans and Democrats put their own political interests ahead of the country’s best interests. Just 7% see both sides as negotiating in good faith.
Obama fares better on that question, though he scores only an even split between those who say he’s protecting his own interests and those who say he’s looking out for the nation…. – USA Today, 7-18-11
- CBS News Poll: Support for debt ceiling increase doubles: Support for increasing the debt ceiling has risen 22 points from last month, from 24 percent to 46 percent. Opposition has fallen 20 points in that period, from 69 percent to 49 percent. (See graphic at left.)
The poll found that the more one follows the debt ceiling debate, the more likely he or she is to support an increase: 51 percent of those who are following the debate very closely think the debt ceiling should be raised, compared to just 29 percent of those who are not following it closely.
The shift toward more support for an increase can be seen across the political spectrum. Last month, 54 percent of Democrats opposed raising the debt ceiling. Now 61 percent support increasing it. And while a majority of Republicans and independents oppose an increase, it’s by a narrower margin than last month. Thirty-three percent of Republicans now say the debt ceiling should be raised, up from 16 percent last month; 40 percent of independents say it should be raised, up from 21 percent last month.
Two thirds of Americans back the Obama administration position that a deal to increase the debt ceiling should include both spending cuts and tax increases, while just 28 percent back the Republican position of only spending cuts. Three in four say an agreement they do not fully support would be preferable to having the U.S. default on its debts…. – CBS News, 7-18-11
- 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.
Monday’s developments: Obama says the two sides are “making progress” in negotiations. Senate Majority Leader Harry Reid, D-Nev., says the Senate will meet each day until the issue is resolved.
What’s Next: Republican House to vote Tuesday on bill to cut and cap spending and require that Congress pass a balanced budget amendment before the debt ceiling can be raised. While the bill is unlikely to pass the Democratic Senate, Obama threatens to veto it. – AP, 7-18-11
- Boehner, Cantor met with Obama on Sunday: House Speaker John Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) met Sunday with President Obama at the White House to discuss the path forward on raising the debt ceiling.
Michael Steel, a spokesman for Boehner, confirmed the Sunday morning meeting and said that while the lines of communication “are being kept open,” there remains “nothing to report in terms of an agreement or process.” News of the meeting was first reported by Politico.
“We believe cut, cap and balance represents the best path forward, and we are looking forward to the House vote on it tomorrow,” Steel said, referring to the chamber’s planned vote on a measure that would call for any increase in the debt limit to be accompanied by significant spending cuts, statutory spending caps and congressional passage of a balanced budget amendment to the Constitution…. – WaPo, 7-19-11
- 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
- Reid to keep Senate in session until debt ceiling raised: Majority Leader Harry Reid (D-Nev.) announced Monday the Senate will remain in session every day — including weekends — until Congress approves an increase to the nation’s debt ceiling.
“The Senate has no more important task than making sure the United States does not fail to pay our bills for pre-existing obligations like Social Security for the first time in our history,” Reid said in a statement. “To ensure that we meet this responsibility, the Senate will stay in session every day, including Saturdays and Sundays, from now until Congress passes legislation that prevents the United States from defaulting on our obligations.”… – Politico, 7-18-11