Political Buzz Debt Ceiling Showdown, July 25, 2011: Reid & Boehner Unveil Debt Plans — Obama Supports Reid Plan — Addresses Nation at 9PM on Debt Crisis

POLITICAL BUZZ

By Bonnie K. Goodman

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

THE HEADLINES: DEBT CEILING SHOWDOWN: OBAMA VS CONGRESSIONAL LEADERS

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JULY 25, 2011: REID & BOEHNER UNVEIL DEBT PLANS — WHITE HOUSE SUPPORT REID PLAN — PRESIDENT OBAMA TO ADDRESS NATION AT 9PM

Obama to address nation on debt at 9 p.m. ET: President Obama will address the nation on the “stalemate over avoiding default and the best approach to cutting deficits” Monday at 9 p.m. ET, White House Press Secretary Jay Carney announced via Twitter.

White House: Obama backs a proposal by Sen. Harry Reid to cut spending by $2.7 trillion, raise debt limit through 2012.

House Leaders Call for Short-Term Rise in Debt Ceiling: House Republicans intend to push for a vote this week on a two-step plan that would allow the federal debt limit to immediately rise by about $1 trillion and tie a second increase next year to the ability of a new joint Congressional committee to produce more deficit reduction.
Top Republicans were to try to sell the proposal to their rank-and file in a crucial meeting Monday afternoon as House Republicans and Senate Democrats readied competing plans in an effort avoid a federal default next week.
The proposal would cut current spending and put legal limits on future spending, saving what Republicans estimate to be about $1.2 trillion over 10 years. The plan calls for no new revenue.

“We’re about to go over a cliff here.” — Senate Majority Leader Harry Reid, D-NV

“Speaker Boehner’s plan, no matter how he tries to dress it up, is simply a short-term plan, and is, therefore, a non-starter in the Senate and with the president.” — Senate Majority Leader Harry Reid

“Republicans are more interested in trying to embarrass the president than trying to do what’s right for the country.” — Senate Majority Leader Harry Reid

“Does anyone think it would be a good idea to do this all over again in six months? … This is an offer that Republicans can’t refuse.” Sen. Charles Schumer

“Senator Reid’s plan is a reasonable approach that should receive the support of both parties, and we hope the House Republicans will agree to this plan so that America can avoid defaulting on our obligations for the first time in our history. The ball is in their court.” — Press Secretary Jay Carney

“I know the president’s worried about his next election. But my God, shouldn’t we be worried about the country?” John Boehner on “Fox News Sunday”

Eric Cantor: The House plan will responsibly prevent default and meets the President’s request for a debt limit increase over time. The President’s reason for opposing this plan is to avoid an election year fight on spending and taxes.

Mitch McConnell: “Congressional leaders of both parties have shown they are willing to work in good faith. I would suggest that the President reconsider their offer rather than veto the country into default.”

Press Secretary Jay Carney’s Statement that the Obama White House Supports Senate Majority Leader Harry Reid’s Debt Plan

Republican Senate Minority Leader Mitch McConnell Statement that Obama Should Reconsider the Bipartisan Debt Proposal to Prevent Default

  • Two proposals, but no clear path toward debt ceiling deal: The Republican leader in the House and Democratic leader of the Senate issued dueling proposals Monday to allow the federal debt ceiling to be raised – both with steep spending cuts, but neither with a clear route to ending the standoff over the government’s ability to pay its bills.
    Both plans will face key tests on Wednesday, when Speaker John Boehner (R-Ohio) and Majority Leader Harry Reid (D-Nev.) each plan to bring their proposals to the floors of their respective chambers.
    In the House, the issue will be whether conservative Republicans will remain united behind Boehner even though his plan received mixed reviews from conservatives, with some influential Tea Party-affiliated lawmakers and groups denouncing it as too weak. In the Senate, the question will be whether Reid can attract the seven Republican votes he would need to cut off a threatened filibuster and claim bipartisan backing for his plan.
    President Obama was scheduled to address the nation at 6:30 Pacific about the importance of quickly resolving the impasse as the threat to the economy was imminent. Boehner will deliver the Republican response shortly after…. – LAT, 7-25-11
  • White House backs Reid debt plan: The White House on Monday endorsed a deficit reduction plan put forward by Senate Democratic leader Harry Reid, saying it would remove the cloud of a possible default from the U.S. economy through 2012.
    “Senator Reid’s plan is a reasonable approach that should receive the support of both parties, and we hope the House Republicans will agree to this plan,” White House press secretary Jay Carney said in a statement. “The ball is in their court.”…. – Reuters, 7-25-11
  • Senate and House Still Far Apart on Debt in 2 New Plans: The Democratic Senate and Republican House put themselves on a legislative collision course Monday as they moved forward with significantly different plans on how to raise the debt limit and avert a possible federal default next week.
    House Republican leaders pushed for a vote Wednesday on a two-step plan that would allow the federal debt limit to immediately be raised by about $1 trillion and tie a second increase next year to the ability of a new joint Congressional committee to produce more deficit reduction.
    But top Senate Democrats called the proposal a “non-starter” and said they would advance their own plan to reduce the deficit by $2.7 trillion and raise the debt ceiling until after next year’s elections, saying it met the conditions that Republicans had laid down during the ongoing debt fight….
    Hoping to beat the Senate to the punch, the House Republican leadership was trying to sell its plan to the party membership in the hopes of forcing it through the House by Wednesday…. – NYT, 7-25-11
  • Democrats offer debt plan they say GOP “can’t refuse”: Senate Democrats unveiled a plan to raise the debt ceiling Monday that abandoned President Obama’s call for revenue increases as part of a deal, putting forth a plan they said would cut spending by $2.7 trillion.
    The plan would include a $1.2 trillion reduction in both defense and non-defense discretionary spending. It also counts $1 trillion in spending cuts from winding down the cost of the wars in Iraq and Afghanistan, something critics say should not count in the total savings.
    Senate Majority Leader Harry Reid, joined by Sen. Charles Schumer, unveiled the plan Monday afternoon in a combative news conference in which they ruled out a rival plan from Senate Republicans that would create a two-step process for a debt limit increase…. – CBS News, 7-25-11
  • House, Senate leaders unveil dueling debt-limit plans: House and Senate leaders formally unveiled dueling backup plans Monday afternoon to raise the federal debt limit after a weekend of intense negotiations failed Sunday to break a partisan impasse that threatens to throw the government into default next week.
    The White House promptly threw its support behind a Democratic plan advanced by Senate Majority Leader Harry M. Reid (D-Nev.) and heaped criticism on House Republicans, accusing them of intransigence in trying to balance the budget “on the backs of seniors and the middle class.”
    House Speaker John A. Boehner (R-Ohio) proposed a two-step plan to cut spending by nearly $3 trillion, laying out the details to his rank-and-file Republicans in a closed-door meeting in the Capitol basement. Shortly afterward,Reid outlined a plan to slash $2.7 trillion.
    Rather than heading toward a compromise to meet the Aug. 2 deadline, however, the two leaders publicly dug in for a fight. Neither of their rival strategies appeared sure to win approval in their respective chambers, as opposition remained high in some quarters. The result was to leave Congress locked in bitter and messy legislative warfare, even as financial markets reopened Monday for the first time since Boehner abruptly abandoned debt-limit talks with the White House on Friday…. – WaPo, 7-25-11
  • John Boehner’s debt ceiling plan pushes even deeper spending cuts: Speaker John Boehner’s two-step plan to raise the debt ceiling by upwards of $2.5 trillion would require the White House to accept much deeper spending cuts than he was negotiating only last week with President Barack Obama.
    Unveiled Monday, the proposal appears to take back Boehner’s prior offers to allow an $800 billion increase in tax revenues but his new spending demands are significant in themselves and could amount to $600 billion more over 10 years when compared with the White House talks.
    Two installments on the debt increase are anticipated, according to a summary document released prior to a House Republican conference on the proposal…. – Politico, 7-25-11
  • Last-ditch GOP debt plan emerges: With skittish markets preparing for the possibility of economic catastrophe, lawmakers worked behind closed doors Monday to craft dueling plans that they hope could somehow, someway get a polarized Washington to pass an increase in the debt limit.
    House Speaker John Boehner, who walked out of negotiations with the White House Friday, planned to present his caucus Monday afternoon with a nearly $3 trillion package that broke the process into two parts.
    Senior GOP aides familiar with the negotiations said the deal would mandate immediate cuts and caps in discretionary spending, potentially saving $1.2 trillion over a decade. (The nonpartisan Congressional Budget Office has yet to score the proposal.) In exchange, the debt ceiling would be raised by less than $1 trillion, enough to last the nation through the end of the year. The as-yet-unspecified spending caps would trigger automatic across-the-board spending cuts if not met…. – CBS News, 7-25-11
  • GOP whip holds firm to balanced budget amendment: The man charged with rounding up Republican votes in the House said he expects that whatever debt-ceiling plan initially makes its way through that chamber will include some kind of balanced budget amendment — or a plan to implement one soon.
    “I think it will have some form,” House Majority Whip Kevin McCarthy (R-CA) told Chuck Todd on MSNBC’s “Daily Rundown.”
    “Maybe it has a balanced budget amendment right now, maybe it has some vote in the near future,” McCarthy added.
    The House majority whip said that Friday’s 51-46 party-line Senate vote to not move forward on the House-approved “Cut, Cap and Balance” bill doesn’t mean it’s over for that approach right now. “It did not get rejected; it got tabled,” he said…. – MSNBC, 7-25-11
  • Treasurys dip as debt ceiling debate continues: Treasury bond prices are edging lower as Washington continues to debate plans to raise the nation’s debt ceiling before an Aug. 2 deadline.
    A failure to raise the debt ceiling could lead the U.S. government to default on its bond payments. Treasury bonds are considered the safest and most liquid investments in the world…. – AP, 7-25-11
  • Obama still pushing deficit deal with tax revenue: President Barack Obama is reiterating his call for a deficit-cutting plan that cuts spending and that also increases tax revenue by making the wealthy and corporations pay more to help stabilize the long-term debt. The president made his comments to the National Council of La Raza on Monday as congressional leaders struggled against time to come up with a plan to meet an Aug. 2 deadline to raise the nation’s debt ceiling. Obama said the wealthy and big corporations have to “pay their fair share, too.” And he alluded to the difficulty of cutting a deal, saying “compromise is becoming a dirty word.” – AP, 7-25-11
  • Analysis: The politics behind Boehner’s two-step debt hike: So many Americans are so sick of political acrimony over raising the U.S. debt limit that it might seem unfathomable to have to do it all over again early next year. But that is exactly what the top U.S. Republican, John Boehner, is proposing for some practical political reasons.
    If Boehner, the Speaker of the House of Representatives, prevails, President Barack Obama will sign legislation by August 2 to raise U.S. borrowing authority by about $1 trillion, or just enough to carry the government through March.
    That would set up a second tortured debt limit debate to avert default just as the U.S. presidential campaign heats up…. – Reuters, 7-25-11
  • Dueling debt-ceiling plans: Can either pass Congress?: House Republicans and Senate Democrats introduced their plans to resolve the debt-ceiling impasse before Aug. 2. But bipartisan hopes appear thin.

    With eight days before the US loses its authority to borrow funds, House and Senate leaders launched dueling plans to resolve the crisis.
    Both deliberately avoid calls to raise taxes – a nonstarter for Republicans that derailed previous bids at a solution. But neither plan can yet claim a clear or even likely path to a bipartisan majority.
    “What they have in common is that neither one is likely to pass – even its own house,” says Larry Sabato, a political scientist at the University of Virginia. “Here’s a case where you really do need a bipartisan agreement, and there’s no bipartisanship left…. – CS Monitor, 7-25-11

  • Ezra Klein: Obvious compromise between Reid and Boehner debt plans: When it comes to cutting the national deficit, the plans proposed by Senate Majority Leader Harry Reid and House Speaker John Boehner are much more similar than they are different. It’s on the issue of raising the debt ceiling that the consensus cracks.
    Both plans call for $1.2 trillion in reductions to discretionary spending. Both envision the formation of a bipartisan “supercommittee,” which would try to find consensus on a larger deficit-reduction package that, if it won a majority on the panel, would be immune to amendments and filibusters and be fast-tracked for an up-or-down vote in the House and the Senate…. – WaPo, 7-25-11
  • Emily Miller: Congress agrees: Keep spending Democratic and Republican leaders preserve status quo on Capitol Hill: Congressional Democrats and Republicans waged a war of words on Monday over their debt-ceiling plans, but their agendas amount to pretty much the same thing. Washington just can’t kick its spending habit.
    Both the blueprints cooked up by House Speaker John A. Boehner, Ohio Republican, and Senate Majority Leader Harry Reid, Nevada Democrat, claim 10-year domestic spending reductions equivalent to a bit over $1 trillion with the creation of new committees to find more spending reforms. Neither leader will provide hard numbers for budget reductions in 2012, the only enforceable year. That means borrowing is immediate and spending cuts delayed. Neither plan raises taxes. The primary distinction between them is that Mr. Boehner seeks a smaller debt-ceiling increase, forcing President Obama to come back hat-in-hand in 2012 for more borrowing authority…. – Washington Times, 7-25-11
  • Congress Can Learn From 1995-96 Debt-Ceiling Debate: Failure to raise the Federal debt ceiling limit could “roil the financial markets and cause severe economic problems,” “cause profound damage to our country,” and have “dire consequences.” So wrote the Los Angeles Times, Washington Post, and New York Times. But the year was 1995, not 2011.
    Other ills predicted during that contentious debate were rising unemployment, reduced GDP growth, and soaring interest rates. That was at a time when President Clinton and Democrats were fighting off attempts by Republicans to link cutting the deficit to the increase in the debt ceiling.
    Then as now, there was a widespread misperception that failure to increase the debt ceiling would produce a default: “congressional Republicans are threatening to provoke the nation’s first-ever default” (Washington Times). The Los Angeles Times reported: “the first real risk of a government default could occur November 15 [1995].” Even the then Chairman of the Federal Reserve, Alan Greenspan, warned that congressional Republicans should drop their efforts, declaring: “To default for the first time in the history of this nation is not something anyone should take in any tranquil manner.” … – Fox News, 7-25-11
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4 Comments

  1. In trying to puzzle out the meaning and relevance of the obscure provision identified by President Clinton in the 14th Amendment, noted in the New York Times: Some see way out of debt impasse, found on page A7 of the Boston Globe, July 25, 2011 is simple.
    The provision, “The validity of the public debt of the United States, authorized by law, including debts incurred for payments or pensions and bounties for services in suppressing insurrection or rebellion shall not be questioned”, is quite easy for me to understand. Some law professors, economists and reporters can’t figure it out because it’s a paradox. Debt IS Money. Without the current debt there would be no money. Money is anything the government declares is money. Money declared by the government is called fiat money. Sovereign Nations are supposed to have as it main focus, the control of the expansion and contraction of that declared money, fiat money, for the ease and convenience of trading goods and services for the people of that nation. It should be issued interest and debt free. Every sovereign nation’s debt limit is unlimited or rather limited to the full faith and credit of its people, which in the long-term is unlimited but limited in the present. Without that paradoxical understanding, the current bantering is for favorable positioning of either the Democratic or Republican Party and has nothing to do with the debt. It also makes for great headlines and high anxiety. Enjoy the mindset change!

    David Snieckus
    99 Crescent street
    Newton, MA 02466
    617-964-2951

    This is good: Workings of a Public Money System: http://www.monetary.org/yamaguchipaper.pdf

    ALSO:

    For Immediate Release:
    Contact: Nathan White (202)225-5871
    Kucinich Briefing on Eliminating the Debt and Creating Jobs without Raising Taxes
    Congressional Briefing: Tuesday, July 26, 2011 at 11:30 AM
    WASHINGTON, D.C. (July 20, 2011) — Congressman Dennis Kucinich (D-OH) will sponsor a Congressional briefing by Professor Kaoru Yamaguchi, PhD. Dr. Yamaguchi will present the results of his breakthrough macroeconomic analysis demonstrating how Congress can solve the debt crisis while promoting the economy to run at its full potential – without inflation.

    Date: Tuesday, July 26, 2011
    Time: 11:30 AM ET
    Location: Cannon 402
    Professor Yamaguchi, who now teaches at the prestigious Doshisha University in Kyoto, Japan, will lead a discussion about the means for Congress to:
    • Pay off the national debt – in full.
    • Provide the funding needed to rebuild America’s crumbling infrastructure – creating millions of good jobs in the process.
    • Reduce or even eliminate federal deficits and solve the fiscal problems of State and local governments.
    • Make the U.S. dollar a stable currency which maintains purchasing power over time.
    • Without creating inflation
    And the pdf here

    http://www.monetary.org/yamaguchipaper.pdf

    MAKES FOR AN INTERESTING STORY…YES?

    David Snieckus

    Reply
  2. Juanita elmore

     /  July 25, 2011

    Dear Sir, {John oehner} I would like to know where were you when the bush Administration was running up our debt, with two unnessary wars? You are talking about the debt, but when does the rich pay. Our president needs to whole and not give in to those who only think about the rich and being elected next time.

    Reply
  3. Margie Froelich

     /  July 25, 2011

    I agree with President Obama, we need a balanced budget. Senior citizens deserve their social security check. They earned it.
    The middle class deserve to have Medicare in the system. Healthcare is so expensive to the average citizen. Margie Froelich of Pgh.

    Reply
    • Margie Froelich

       /  July 25, 2011

      We need a balanced budget a soon as possible. People are getting very nervous and anxious over all this stubborness from the Republican’s over this mess.

      Reply

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