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
President Obama speaks in support of a bipartisan deal to reduce the nation’s deficit and avoid default.
White House Photo, Pete Souza, 7/31/11
JULY 31, 2011: PRESIDENT OBAMA & REPUBLICAN, DEMOCRATIC CONGRESSIONAL LEADERS REACH DEBT DEAL
- President Obama Announces Debt Deal: Rundown of the Debt Debate 9:25 p.m. ET | President Obama announced Sunday evening that he had reached an agreement with party leaders in Congress that will cut the deficit, raise the debt ceiling and create a bipartisan, bicameral committee of members of Congress to identify further deficit cuts.
The deal will cut $1 trillion from the deficit over ten years and allow President Obama to raise the debt ceiling in a series of steps that Congress could then vote against, but they would need a likely unattainable two-thirds majority in both chambers to reject the debt limit increase.
The deficit reduction committee must identify a way to cut at least an additional $1.5 trillion from the deficit over the next ten years and then send that proposal to Congress by the end of the year. If it does not pass, there will be a series of automatic cuts in Medicare and defense and non-defense domestic spending. This measure is meant to force the committee to reach a workable agreement.
“Is this the deal I would have preferred? No. I believe that we could’ve made the tough choices required on entitlement reform and tax reform right now, rather than through a special Congressional committee process. But this compromise does make a serious down payment on the deficit reduction we need and gives each party a strong incentive to get a balanced plan done before the end of the year,” President Obama said. “Most importantly it would allow us to avoid default and end the crisis that Washington imposed on the rest of America. It ensures also that we will not face this same kind of crisis in six months, or eight months or 12 months.”
President Obama urged members of Congress to support the deal, but that support is not guaranteed. House Speaker John Boehner, R-Ohio, held a conference call Sunday evening to sell the deal to House Republicans. He used this slide show to make his case.
The Senate will also have to vote to pass the plan, but the math is more uncertain in the House, where Democratic votes will be needed to pass a bill that some conservative Republicans will likely reject. The deal must be passed in both chambers before 12 a.m. Wednesday in order to avoid a default on the debt and an overnight reduction of 40 percent of government spending…. – PBS Newshour, 7-31-11
- Obama, Congress reach a debt deal: Ending a perilous stalemate, President Barack Obama announced agreement Sunday night with Republican congressional leaders on a compromise to avoid the nation’s first-ever financial default. The deal would cut more than $2 trillion from federal spending over a decade.
Default “would have had a devastating effect on our economy,” Obama said at the White House, relaying the news to the American people and financial markets around the world. He thanked the leaders of both parties.
House Speaker John Boehner telephoned Obama at mid-evening to say the agreement had been struck, officials said.
No votes were expected in either house of Congress until Monday at the earliest, to give rank-and-file lawmakers time to review the package. But leaders in both parties were already beginning the work of rounding up votes…. – AP, 7-31-11
- It’s a deal: Obama, Congress will avert default: Ending a perilous stalemate, President Barack Obama and congressional leaders announced historic agreement Sunday night on emergency legislation to avert the nation’s first-ever financial default.
The dramatic resolution lifted a cloud that had threatened the still-fragile economic recovery at home – and it instantly powered a rise in financial markets overseas.
The agreement would slice at least $2.4 trillion from federal spending over a decade, a steep price for many Democrats, too little for many Republicans. The Treasury’s authority to borrow would be extended beyond the 2012 elections, a key objective for Obama, though the president had to give up his insistence on raising taxes on wealthy Americans to reduce deficits… – AP, 7-31-11
- Obama announces deal reached to end debt crisis: President Barack Obama announced on Sunday that Democrats and Republicans leaders have reached an agreement to reduce the U.S. deficit and avoid default. Obama said the agreement will cut about $1 trillion over 10 years…. – Reuters, 7-31-11
- Obama announces debt deal to end U.S. debt crisis: President Barack Obama said on Sunday that Democrat and Republican leaders have reached an agreement to reduce the U.S. deficit and avoid default, but it was not clear if the spending cuts were deep enough to stave off a credit rating downgrade.
Obama said the agreement will cut about $1 trillion over 10 years and cuts would not happen so quickly that they would drag on the fragile U.S. economy. Another $1.2 trillion would be cut if a joint committee fails to find at least that much in budget savings.
The deal would still have to be passed in the House and the Senate.
U.S. S&P 500 stock futures bounced 1.4 percent and U.S. Treasuries futures slid on news of the deal. Gold and then yen also fell.
Standard & Poor’s and Moody’s rating agencies indicated earlier that deficit-cutting measures of around $4 trillion would be enough for the U.S. to avoid losing its prized AAA rating…. – Reuters, 7-31-11
- Leaders Report Accord on Debt Limit Increase: 9:05 p.m. | Updated Democratic and Republican leaders in Congress announced Sunday night that they have reached a deal to raise the nation’s debt ceiling and avert a default.
President Obama spoke moments later at the White House, telling reporters that “the leaders of both parties in both chambers have reached an agreement that will reduce the deficit and avoid a default.”
“My message to the world tonight is that this nation and this Congress are moving forward and we are moving forward together,” Senator Harry Reid of Nevada said from the floor of the Senate.
Senator Mitch McConnell of Kentucky, the Republican leader said “there is now a framework to review that will ensure significant cuts in Washington’s spending.”
The announcement came even as House Speaker John A. Boehner was holding conference call with Republican House members.
In the Senate, Mr. Reid called the deal a “historic bipartisan compromise” and said it is “remarkable” for what it does and for what it prevents: a “first-ever default on the full faith and credit of the United States.”
“Sometimes it seems, our two sides disagree on almost everything,” he said. “But in the end, reasonable people were able to agree on this: The United States could not take the chance of defaulting on our debt.”
“This is an important moment for our country,” Mr. McConnell said, adding later that “I think I can say with a high degree of confidence that there is now a framework to review that will ensure significant cuts in Washington spending. And we can assure the American people tonight that the United States of America will not for the first time in our history default on its obligations.”… – NYT, 7-31-11
- White House, congressional leaders reach debt deal: Two days before the deadline for a possible U.S. government default, President Barack Obama and congressional leaders reached agreement Sunday on a legislative package that would extend the federal debt ceiling while cutting spending and guaranteeing further deficit-reduction steps.
The proposed $3 trillion deal, which still requires congressional approval, brought some immediate relief to global markets closely watching the situation play out and a nation filled with anger and frustration over partisan political wrangling that threatened further economic harm to an already struggling recovery…. – CNN, 7-31-11
- Leaders agree on framework of a deal to end the debt crisis: President Barack Obama and congressional leaders of both parties said late Sunday that they had agreed to a framework for a budget deal that would cut trillions of dollars in federal spending over the next decade and clear the way for an increase in the government’s borrowing limit.
With the health of the fragile economy hanging in the balance and financial markets watching closely, the leaders said they would present the compromise to their caucuses Monday morning in hopes of narrowly averting a default before a Tuesday deadline.
Obama spoke from the White House on Sunday night, telling reporters that “the leaders of both parties in both chambers have reached an agreement that will reduce the deficit and avoid a default.”
Just before Obama spoke on TV, the two Senate leaders, Harry Reid and Mitch McConnell, took the floor to endorse the pact as well.
“I am relieved to say that leaders from both parties have come together for the sake of our economy to reach a historic, bipartisan compromise that ends this dangerous standoff,” said Reid, the majority leader.
The agreement came after a day of wrangling over Pentagon cuts and must still be sold to the Senate and the House, with the House providing a particular challenge.
As conversations flowed between the White House and Capitol Hill, Reid, the majority leader, publicly embraced the compromise that would tie deep spending cuts to a debt increase, though
his plans to bring it to a vote as early as Sunday were put off as was a tentative meeting of Senate Democrats to review it…. – NYT, 7-31-11
- Obama, Congress Reach Debt Deal: President Barack Obama on Sunday said that leaders of both parties have reached an agreement to lift the U.S. debt ceiling, reduce the federal deficit and avoid a U.S. credit default, an announcement welcomed in early trading on the Asia financial markets.
Both the U.S. House and Senate were expected to meet Monday to discuss the details of the plan, which calls for increasing the debt ceiling by $2.4 trillion through the end of 2012 along with $2.4 trillion in deficit reduction.
“It will allow us to avoid default,” said Mr. Obama, who spoke at the White House … WSJ, 7-31-11
- Parties agree to debt-ceiling deal, pending votes in Congress: Senate Majority Harry Reid and Senate Minority Leader Mitch McConnell announced Sunday night that they had come to an agreement on a deal that would raise the federal debt limit and reduce the deficit.
In back-to-back speeches on the Senate floor, Reid (D-Nev.) called the compact an “historic, bipartisan compromise that ends this dangerous standoff,” while McConnell (R-Ky.) said there was now a framework in place to “ensure significant cuts in Washington spending.”
“Sometimes it seems our two sides disagree on almost everything. But in the end, reasonable people were able to agree on this: The United States could not take the chance of defaulting on our debt, risking a United States financial collapse and a worldwide depression,” Reid said.
Speaking from the White House, President Obama acknowledged that the “messy” fight over the nation’s debt and deficits has “taken far too long,” but he thanked leaders for finding “their way toward compromise” and urged Americans to continue putting pressure on lawmakers until the deal is voted out of Congress.
The agreement “will begin to lift the cloud of debt and the cloud of uncertainty that hangs over our economy,” Obama said.
As the Senate leaders announced the accord, House Speaker John A. Boehner (R-Ohio) addressed his members on a conference call – briefing them on the outline of the plan.
“There’s no agreement until we’ve talked to you,” Boehner told the members, according to excerpts of the conversation released by his office.
All sides planned to meet Monday morning to go over details…. – LAT, 7-31-11
- Obama, Boehner Announce Agreement to Raise Debt Ceiling, Avoid Default: It took the threat of economic collapse and a long, contentious negotiation — and there will still be votes in Congress before it’s truly done — but lawmakers from both parties and the White House have reached a deal to raise the nation’s credit limit — the debt ceiling — by $2.4 trillion, likely through 2012.
President Obama made a hastily arranged address from the White House at 8:40 p.m. at the same time House Speaker John Boehner was pitching the deal to House Republicans on a conference call.
“This will allow us to avoid default, allow us to pay our bills,” the president said.
On the senate floor, Minority Leader Mitch McConnell appeared alongside Majority Leader Harry Reid and seemed confident that the deal would gain enough support to pass through Congress.
“We can assure the American people tonight that the United States of America will not for the first time in our history default on its obligations,” he said.
Boehner told House Republicans, according to an account released by his office, that the framework he and the president have agreed upon is true to the principles of small government because it relies entirely on spending cuts, although it includes promises of entitlement and tax reform in the future…. – ABC News, 7-31-11
- Obama Says Congressional Leaders Approve Debt-Limit Increase: President Barack Obama said tonight that leaders of both parties in the U.S. House and Senate had approved an agreement to raise the nation’s debt ceiling and cut the federal deficit that must now be sold to Congress.
“The leaders of both parties in both chambers have reached an agreement that will reduce the deficit and avoid default,” Obama said at the White House. “This compromise does make a serious down payment on the deficit-reduction we need. Most importantly it will allow us to avoid default.”
Congressional leaders are sifting through the details of the tentative bipartisan agreement to raise the debt ceiling by $2.1 trillion, sufficient to serve the nation’s needs into 2013. They are preparing to sell to members the deal to cut $917 billion in spending over a decade, raising the debt limit initially by $900 billion, and to charge a special committee with finding another $1.5 trillion in deficit savings by the year’s end. They confront an Aug. 2 deadline for approval…. – Bloomberg, 7-31-11
- Obama Announces Debt-Reduction Deal Approved by Senate, House Leaders: President Obama announced Sunday night that leaders of both parties in both chambers have reached an agreement on a debt-reduction deal that will “lift the cloud of uncertainty that hangs over our economy.”
According to the president, the deal means an immediate cut of $1 trillion over a 10-year period, followed by the creation of a committee to come up with additional cuts worth $1.5 trillion to be voted on by the end of the year.
Each chamber will nominate lawmakers to the committee to report back in the fall. Tax hikes are not part of the package and a pledge for a Balanced Budget Amendment vote is.
Obama said everything will be on the table and both parties will find some of the cuts objectionable.
The Senate adjourned Sunday night without a vote on a debt reduction deal, but Senate Democratic Leader Harry Reid said that the parties are going to have to give ground and compromise so the country doesn’t default.
“I am relieved to say that leaders from both parties have come together for the sake of our economy to reach a historic, bipartisan compromise that ends this dangerous standoff. The compromise we have agreed to is remarkable not only because of what it does, but because of what it prevents: a first-ever default on the full faith and credit of the United States,” Reid said.
Reid and Senate Republican Leader Mitch McConnell will both present the agreement to their caucuses on Monday morning. Several objections are expected, including from Republican defense hawks who don’t want the military gutted and from the Congressional Black Caucus, which called the deal a “sugar-coated Satan sandwich.”
House Speaker John Boehner told his Republican caucus on a Sunday night conference call that the deal isn’t done yet.
“The press has been filled with reports all day about an agreement. There’s no agreement until we’ve talked to you,” he said.
But Boehner of Ohio said the deal does not violate GOP principles. “We got 98 percent of what we wanted,” he said adding gthat the framework cuts more spending than it raises the debt limit. It also caps future spending to limits in the growth of government.
“It would also guarantee the American people the vote they have been denied in both chambers on a balanced budget amendment, while creating, I think, some new incentives for past opponents of a BBA to support it,” Boehner said…. – Fox News, 7-31-11
- Debt deal: Obama, Hill leaders break through: Facing the imminent prospect of default, the White House and congressional leaders reached a debt ceiling deal that gives President Barack Obama greater certainty in managing the Treasury’s borrowing needs while making a joint commitment to major deficit reduction without any explicit concessions by the GOP on new tax revenues.
Obama announced the deal at 8:40 p.m. on live TV in the White House briefing room as Speaker John Boehner was simultaneously briefing his own Republican conference on the deal.
“Is this the deal I would have preferred?” No,” Obama said. “We could have made the tough choices required on entitlement reform and tax reform right now rather than through a special congressional committee process. But this compromise does make a serious down payment on the deficit reduction we need … and ensures also that will we not face this same kind of crisis in six months or eight months or twelve months.”
“Both parties gave more than they wanted,” said Senate Majority Leader Harry Reid in making the announcement on the Senate floor. “But that’s the essence of compromise.”
Senate Minority Leader Mitch McConnell (R-Ky.), a central player together with Vice President Joe Biden in the final talks, had been confident all of Sunday that a resolution was possible. But Boehner’s silence had remained a concern for the administration, having twice seen the Ohio Republican walk away from negotiations with the president.
It was not until the evening that Boehner announced an 8:30 p.m. conference call with his members, and even then his staff said there had no agreement yet on a stubborn dispute over 2012 defense funding. But that issue was resolved finally when it appears the administration agreed to use a broader definition of security spending that also includes funding for Homeland Security, the State Department and foreign aid…. – Politico, 7-31-11
- President Obama: Deal reached on debt crisis: President Barack Obama announced that an agreement with Republicans has been struck to raise the debt ceiling in exchange for $1 trillion in spending cuts over the next ten years.
Mr. Obama said the deal will result in the lowest level of domestic spending since the Eisenhower administration in the 1950s, but still allow the U.S. to create jobs.
Still clinging to his idea of a balanced approach, Obama said “we have to ask wealthiest Americans to give up tax breaks,” as well as make modest adjustments to entitlement programs like Medicare and Medicaid.
The second part of the agreement reached was a previously mentioned bipartisan Congressional committee, which will report back by November with a proposal to further reduce the deficit. Their proposals will then be put in front of congress for up or down vote…. – CBS News, 7-31-11
- Obama: Deal raises debt ceiling and reduces deficits: President Barack Obama announced Sunday an agreement with congressional leaders would extend the federal debt ceiling and reduce deficits.
He said that, under the debt agreement reached by congressional leaders from both parties, which must still must be approved by lawmakers, a bipartisan commission would report back by November with suggested cuts and potentially revenue increases to address the nation’s budget deficit.
“At this stage, everything will be on the table,” Obama said of this second round of cuts, which are in addition to an agreed-upon $1 trillion in cuts over the next 10 years.
Obama said the debt reduction plan that’s been backed by congressional leaders – but that still must be approved by the House and Senate – “ensures that we will not face this kind of crisis in six months, in eight months, or in 12 months.”… – CNN, 7-31-11
Harry Reid Supports Debt Ceiling Compromise; Defense Cuts a Sticking Point: Senate Majority Leader Harry Reid’s spokesman says the majority leader has signed off on the debt-ceiling agreement “pending caucus approval,” but there’s nothing yet from Republicans.
So, what’s the delay? There’s one last bone of contention.
Republicans are objecting to the amount of defense spending cuts in the first year of the deal. This has nothing to do with the trigger — if further spending cuts are not enacted by Congress next year, the deal would mandate they occur. This disagreement has to do with how much of next year’s cuts will apply to defense.
Reid is trying to put pressure on House Speaker John Boehner to give in on this last point by saying that everybody is now on board –- except for the Speaker…. – ABC News, 7-31-11