Political Headlines January 16, 2013: President Barack Obama — Partier In Chief?

POLITICAL HEADLINES

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OBAMA PRESIDENCY & THE 113TH CONGRESS:

THE HEADLINES….

President Obama — Partier In Chief?

Source: ABC News Radio, 1-16-13

Alex Wong/Getty Images

President Obama pushed back against criticism earlier this week that he is too insular and not social enough in Washington. He said simply, “I like a good party.”

Leaving a farewell reception at the Treasury Department for Secretary Timothy Geithner, Obama was asked “So, you like a good party?” “They didn’t serve any alcohol,” Obama responded with a big grin, as he appeared to munch on something. “Still on a budget,” he quipped….READ MORE

Political Headlines January 10, 2013: President Barack Obama’s Cabinet Shuffle: Who Is Leaving, Who Was Asked to Stay

POLITICAL HEADLINES

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OBAMA PRESIDENCY & THE 113TH CONGRESS:

THE HEADLINES….

Obama’s Cabinet Shuffle: Who Is Leaving, Who Was Asked to Stay

Source: ABC News Radio, 1-10-13

JEWEL SAMAD/AFP/Getty Images

With the departure of Hilda Solis at the Labor Department, we have now seen five members of the President Obama’s Cabinet announcing their intention to leave since the election: Secretary of State Hillary Clinton, Treasury Secretary Timothy Geithner, Defense Secretary Leon Panetta, Environmental Protection Agency Administrator Lisa Jackson and now, Secretary of Labor Solis.

Transportation Secretary Ray Lahood has also long suggested he would not stay for a second term.

At least three other cabinet secretaries have been asked to stay as the Obama begins his second term:

  • Attorney General Eric Holder
  • Health and Human Services Secretary Kathleen Sebelius
  • Veterans Affairs Secretary Eric Shinseki

READ MORE

Political Headlines December 3, 2012: John Boehner, Timothy Geithner Report Little Progress on ‘Fiscal Cliff’

POLITICAL HEADLINES

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OBAMA PRESIDENCY & THE 112TH CONGRESS:

THE HEADLINES….

John Boehner, Timothy Geithner Report Little Progress on ‘Fiscal Cliff’

Source: ABC News Radio, 12-2-12

TOBY JORRIN/AFP/Getty Images

Negotiations between Congress and the White House over the “fiscal cliff” may be continuing in private this weekend, but on television airwaves the top Republican on Capitol Hill reported talks are still at an impasse.

“I would say we’re nowhere. Period,” House Speaker John Boehner said in an interview aired on “Fox News Sunday.” “We’ve put a serious offer on the table by putting revenues up there to try to get this question resolved. But the White House has responded with virtually nothing. They’ve actually asked for more revenue than they’ve been asking for the whole entire time.”…READ MORE

Full Text Obama Presidency March 23, 2012: President Barack Obama Nominates Dartmouth College President Dr. Jim Yong Kim to Head World Bank

POLITICAL SPEECHES & DOCUMENTS

OBAMA PRESIDENCY & THE 112TH CONGRESS:

President Obama Nominates Dartmouth College President to Lead World Bank

Source: WH, 3-23-12

President Barack Obama announces Dr. Jim Yong Kim as his nominee to head the World Bank (March 23, 2012)
President Barack Obama announces Dr. Jim Yong Kim, second from left, as his nominee to head the World Bank, during a statement in the Rose Garden of the White House, March 23, 2012. Secretary of State Hillary Rodham Clinton and Treasury Secretary Timothy Geithner also attended the announcement. (Official White House Photo by Sonya N. Herbert)

This morning, President Obama named Dr. Jim Yong Kim, a global health and development expert, as his choice to head the World Bank. Dr. Kim is the president of Dartmouth College and a co-founder of Partners In Health.

In announcing his decision, President Obama talked about the World Bank’s capacity for improving the lives of real people all over the world:

[Despite] its name, the World Bank is more than just a bank. It’s one of the most powerful tools we have to reduce poverty and raise standards of living in some of the poorest countries on the planet. And in a world that is growing smaller and more connected every day, that’s a critical mission -– not just for those who are struggling, but for all of us.

Dr. Kim has worked as both an anthropologist and a physician in communities from Asia to Africa to the Americas. He’s the former head of a World Health Organization team that worked to treat 3 million patients with HIV/AIDS.

The bank will select its new president before its spring meeting in April.

POLITICAL QUOTES & SPEECHES

Remarks by the President on the Nomination of Dr. Jim Kim for World Bank President

The Rose Garden

10:09 A.M. EDT

THE PRESIDENT:  Good morning, everybody.

In February, Bob Zoellick, the current President of the World Bank, announced that he would be stepping down at the end of his term in June.  Bob has been a strong and effective leader at the bank for the last five years, and when he told me about his plans, I immediately began to search for someone to fill his shoes.

Now, despite its name, the World Bank is more than just a bank.  It’s one of the most powerful tools we have to reduce poverty and raise standards of living in some of the poorest countries on the planet.  And in a world that is growing smaller and more connected every day, that’s a critical mission -– not just for those who are struggling, but for all of us.

When we reduce hunger in the world, or help a farmer recover from a flood or a drought, it strengthens the entire world economy.  When we put an end to a preventable disease, all of us are safer because of it.  When an entrepreneur can start a new business, it creates jobs in their country, but also opens up new markets for our country.  And ultimately, when a nation goes from poverty to prosperity, it makes the world stronger and more secure for everybody.

That’s why the World Bank is so important.  And that’s why the leader of the World Bank should have a deep understanding of both the role that development plays in the world, and the importance of creating conditions where assistance is no longer needed.

I believe that nobody is more qualified to carry out that mission than Dr. Jim Kim.  It’s time for a development professional to lead the world’s largest development agency.  And that’s why today, after a careful and thorough search, I am nominating Dr. Jim Kim to be the next president of the World Bank.

Jim has spent more than two decades working to improve conditions in developing countries around the world.  As a physician and an anthropologist, he co-founded Partners in Health, and led a World Health Organization campaign to treat 3 million patients with HIV/AIDS.  I have made HIV/AIDS and the fight against that dreaded disease and the promotion of public health a cornerstone of my development agenda, building on some of the outstanding work that was done by President Bush.

We pursue these efforts around the globe because it’s the right thing to do, and also because healthy populations enable growth and prosperity.  And I’m pleased that Jim brings this particular experience with him to his new job.

Jim was also the chair of the Department of Global Health and Social Medicine at Harvard Medical School.  He has earned a MacArthur “Genius” Fellowship.  And for the last three years, he has served as the president of Dartmouth College.

I should also mention that, after immigrating to this country from Korea at age five, Jim went on to become the president of his high school class, the quarterback of the football team, the point guard of the basketball team.  I just found out he is a five handicap in golf.  I’m a little resentful about that last item.  (Laughter.)  But he does it all.

Jim has truly global experience.  He’s worked from Asia to Africa to the Americas — from capitals to small villages.  His personal story exemplifies the great diversity of our country and the fact that anyone can make it as far as he has as long as they’re willing to work hard and look out for others.  And his experience makes him ideally suited to forge partnerships all around the world.

So I could not be more pleased to nominate Jim for this job, and I think I can speak for Secretary Clinton and Secretary Geithner when I say that we are looking forward to working with him.

And I also want to take a minute to thank Bob Zoellick once again for all his hard work.  Over the last five years, Bob has made the bank more transparent, he has helped shore up progress made in places like Afghanistan.  He’s raised billions of dollars to help some of the world’s poorest communities.

Jim is the right person to carry on that legacy, and I know his unique set of skills and years of experience will serve him well.  So I’m grateful to Jim for his willingness to serve.  I do not think that the World Bank could have a better leader.  So, thank you.

DR. KIM:  Mr. President, thank you.

THE PRESIDENT:  Thank you.

DR. KIM:  Thank you, sir.

THE PRESIDENT:  You’re going to do great.  Thank you.  All right?

Q    Mr. President, may I ask you about this current case in Florida, very controversial, allegations of lingering racism within our society — the so-called do not — I’m sorry — Stand Your Ground law and the justice in that?  Can you comment on the Trayvon Martin case, sir?

THE PRESIDENT: Well, I’m the head of the executive branch, and the Attorney General reports to me so I’ve got to be careful about my statements to make sure that we’re not impairing any investigation that’s taking place right now.

But obviously, this is a tragedy.  I can only imagine what these parents are going through.  And when I think about this boy, I think about my own kids.  And I think every parent in America should be able to understand why it is absolutely imperative that we investigate every aspect of this, and that everybody pulls together — federal, state and local — to figure out exactly how this tragedy happened.

So I’m glad that not only is the Justice Department looking into it, I understand now that the governor of the state of Florida has formed a task force to investigate what’s taking place.  I think all of us have to do some soul searching to figure out how does something like this happen.  And that means that examine the laws and the context for what happened, as well as the specifics of the incident.

But my main message is to the parents of Trayvon Martin.  If I had a son, he’d look like Trayvon.  And I think they are right to expect that all of us as Americans are going to take this with the seriousness it deserves, and that we’re going to get to the bottom of exactly what happened.

Thank you.

END
10:15 A.M. EDT

Full Text US Economy in Crisis August 8, 2011: President Barack Obama’s Remarks to the Nation on S&P’s (Standard & Poor’s) Downgrade of the US Credit Rating from AAA to AA+ & Repercussions on the Economy

POLITICAL SPEECHES & DOCUMENTS

OBAMA PRESIDENCY & THE 112TH CONGRESS:

White House Photo, Samantha Appleton, 8/8/11

QUOTES

Remarks by the President

State Dining Room

1:52 P.M. EDT

THE PRESIDENT:  Good afternoon, everybody.  On Friday, we learned that the United States received a downgrade by one of the credit rating agencies — not so much because they doubt our ability to pay our debt if we make good decisions, but because after witnessing a month of wrangling over raising the debt ceiling, they doubted our political system’s ability to act.  The markets, on the other hand, continue to believe our credit status is AAA.  In fact, Warren Buffett, who knows a thing or two about good investments, said, “If there were a quadruple-A rating, I’d give the United States that.”  I, and most of the world’s investors, agree.

That doesn’t mean we don’t have a problem.  The fact is, we didn’t need a rating agency to tell us that we need a balanced, long-term approach to deficit reduction.  That was true last week.  That was true last year.  That was true the day I took office.  And we didn’t need a rating agency to tell us that the gridlock in Washington over the last several months has not been constructive, to say the least.  We knew from the outset that a prolonged debate over the debt ceiling — a debate where the threat of default was used as a bargaining chip — could do enormous damage to our economy and the world’s.  That threat, coming after a string of economic disruptions in Europe, Japan and the Middle East, has now roiled the markets and dampened consumer confidence and slowed the pace of recovery.

So all of this is a legitimate source of concern.  But here’s the good news:  Our problems are eminently solvable.*  And we know what we have to do to solve them.  With respect to debt, our problem is not confidence in our credit — the markets continue to reaffirm our credit as among the world’s safest.  Our challenge is the need to tackle our deficits over the long term.

Last week, we reached an agreement that will make historic cuts to defense and domestic spending.  But there’s not much further we can cut in either of those categories.  What we need to do now is combine those spending cuts with two additional steps:  tax reform that will ask those who can afford it to pay their fair share and modest adjustments to health care programs like Medicare.

Making these reforms doesn’t require any radical steps.  What it does require is common sense and compromise.  There are plenty of good ideas about how to achieve long-term deficit reduction that doesn’t hamper economic growth right now.  Republicans and Democrats on the bipartisan fiscal commission that I set up put forth good proposals.  Republicans and Democrats in the Senate’s Gang of Six came up with some good proposals.  John Boehner and I came up with some good proposals when we came close to agreeing on a grand bargain.

So it’s not a lack of plans or policies that’s the problem here.  It’s a lack of political will in Washington.  It’s the insistence on drawing lines in the sand, a refusal to put what’s best for the country ahead of self-interest or party or ideology.  And that’s what we need to change.

I realize that after what we just went through, there’s some skepticism that Republicans and Democrats on the so-called super committee, this joint committee that’s been set up, will be able to reach a compromise, but my hope is that Friday’s news will give us a renewed sense of urgency.  I intend to present my own recommendations over the coming weeks on how we should proceed.  And that committee will have this administration’s full cooperation.  And I assure you, we will stay on it until we get the job done.

Of course, as worrisome as the issues of debt and deficits may be, the most immediate concern of most Americans, and of concern to the marketplace as well, is the issue of jobs and the slow pace of recovery coming out of the worst recession in our lifetimes.

And the good news here is that by coming together to deal with the long-term debt challenge, we would have more room to implement key proposals that can get the economy to grow faster.  Specifically, we should extend the payroll tax cut as soon as possible, so that workers have more money in their paychecks next year and businesses have more customers next year.

We should continue to make sure that if you’re one of the millions of Americans who’s out there looking for a job, you can get the unemployment insurance that your tax dollars contributed to.  That will also put money in people’s pockets and more customers in stores.

In fact, if Congress fails to extend the payroll tax cut and the unemployment insurance benefits that I’ve called for, it could mean 1 million fewer jobs and half a percent less growth.  This is something we can do immediately, something we can do as soon as Congress gets back.

We should also help companies that want to repair our roads and bridges and airports, so that thousands of construction workers who’ve been without a job for the last few years can get a paycheck again.  That will also help to spur economic growth.

These aren’t Democratic proposals.  These aren’t big government proposals.  These are all ideas that traditionally Republicans have agreed to, have agreed to countless times in the past.  There’s no reason we shouldn’t act on them now.  None.

I know we’re going through a tough time right now.  We’ve been going through a tough time for the last two and a half years.  And I know a lot of people are worried about the future.  But here’s what I also know:  There will always be economic factors that we can’t control –- earthquakes, spikes in oil prices, slowdowns in other parts of the world.  But how we respond to those tests — that’s entirely up to us.

Markets will rise and fall, but this is the United States of America.  No matter what some agency may say, we’ve always been and always will be a AAA country.  For all of the challenges we face, we continue to have the best universities, some of the most productive workers, the most innovative companies, the most adventurous entrepreneurs on Earth.  What sets us apart is that we’ve always not just had the capacity, but also the will to act — the determination to shape our future; the willingness in our democracy to work out our differences in a sensible way and to move forward, not just for this generation but for the next generation.

And we’re going to need to summon that spirit today.  The American people have been through so much over the last few years, dealing with the worst recession, the biggest financial crisis since the 1930s, and they’ve done it with grace.  And they’re working so hard to raise their families, and all they ask is that we work just as hard, here in this town, to make their lives a little easier.  That’s not too much to ask.  And ultimately, the reason I am so hopeful about our future — the reason I have faith in these United States of America — is because of the American people.  It’s because of their perseverance, and their courage, and their willingness to shoulder the burdens we face -– together, as one nation.

One last thing.  There is no one who embodies the qualities I mentioned more than the men and women of the United States Armed Forces.  And this weekend, we lost 30 of them when their helicopter crashed during a mission in Afghanistan.  And their loss is a stark reminder of the risks that our men and women in uniform take every single day on behalf of their county.  Day after day, night after night, they carry out missions like this in the face of enemy fire and grave danger.  And in this mission –- as in so many others -– they were also joined by Afghan troops, seven of whom lost their lives as well.

So I’ve spoken to our generals in the field, as well as President Karzai.  And I know that our troops will continue the hard work of transitioning to a stronger Afghan government and ensuring that Afghanistan is not a safe haven for terrorists.  We will press on.  And we will succeed.

But now is also a time to reflect on those we lost, and the sacrifices of all who serve, as well as their families.  These men and women put their lives on the line for the values that bind us together as a nation.  They come from different places, and their backgrounds and beliefs reflect the rich diversity of America.

But no matter what differences they might have as individuals, they serve this nation as a team.  They meet their responsibilities together.  And some of them — like the 30 Americans who were lost this weekend –- give their lives for their country.  Our responsibility is to ensure that their legacy is an America that reflects their courage, their commitment, and their sense of common purpose.

Thank you very much.

END  2:03 P.M. EDT

 

President Obama on Common Sense Steps to Grow the Economy

Souce: WH, 8-8-11
Download Video: mp4 (100MB) | mp3 (10MB)

This afternoon, while speaking to the press from the State Dining Room, President Obama addressed the news from Friday that the United States received a downgrade by one of the credit rating agencies:

The fact is, we didn’t need a rating agency to tell us that we need a balanced, long-term approach to deficit reduction.  That was true last week.  That was true last year.  That was true the day I took office.  And we didn’t need a rating agency to tell us that the gridlock in Washington over the last several months has not been constructive, to say the least.  We knew from the outset that a prolonged debate over the debt ceiling — a debate where the threat of default was used as a bargaining chip — could do enormous damage to our economy and the world’s.  That threat, coming after a string of economic disruptions in Europe, Japan and the Middle East, has now roiled the markets and dampened consumer confidence and slowed the pace of recovery.

The President discussed the need to tackle our deficits over the long term through tax reform that asks those who can afford it to pay their fair share and modest adjustments to health care programs like Medicare. Though the issues of debt and deficits have dominated much of the recent conversation in Washington, the most immediate concern of most Americans is job creation and growing our economy. That is why President Obama laid out some common sense steps that can be taken right away to spur economic growth such as extending the payroll tax cut and unemployment insurance:

Specifically, we should extend the payroll tax cut as soon as possible, so that workers have more money in their paychecks next year and businesses have more customers next year.

We should continue to make sure that if you’re one of the millions of Americans who’s out there looking for a job, you can get the unemployment insurance that your tax dollars contributed to.  That will also put money in people’s pockets and more customers in stores.

In fact, if Congress fails to extend the payroll tax cut and the unemployment insurance benefits that I’ve called for, it could mean 1 million fewer jobs and half a percent less growth.  This is something we can do immediately, something we can do as soon as Congress gets back.

President Obama Delivers a Statement to the Press

President Barack Obama delivers a statement to the press in the State Dining Room of the White House, Aug. 8, 2011. (Official White House Photo by Chuck Kennedy)

Despite the economic hardship and challenges we face as a nation, the President is hopeful about our future:

No matter what some agency may say, we’ve always been and always will be a AAA country.  For all of the challenges we face, we continue to have the best universities, some of the most productive workers, the most innovative companies, the most adventurous entrepreneurs on Earth.  What sets us apart is that we’ve always not just had the capacity, but also the will to act — the determination to shape our future; the willingness in our democracy to work out our differences in a sensible way and to move forward, not just for this generation but for the next generation.

As the President said, there is no one who embodies these qualities of excellence more than our men and women in uniform. The President reflected on the 30 Americans who were lost in Afghanistan this weekend:

[N]ow is also a time to reflect on those we lost, and the sacrifices of all who serve, as well as their families.  These men and women put their lives on the line for the values that bind us together as a nation.  They come from different places, and their backgrounds and beliefs reflect the rich diversity of America.

But no matter what differences they might have as individuals, they serve this nation as a team.  They meet their responsibilities together.  And some of them — like the 30 Americans who were lost this weekend –- give their lives for their country.  Our responsibility is to ensure that their legacy is an America that reflects their courage, their commitment, and their sense of common purpose.

President Obama: Our Problems Are Eminently Solvable

Source: WH, 8-8-11

The President today outlined a series of steps Congress can take to quickly add momentum to our nation’s economic growth. Click on the links below to find out more about how each of these proposals can help propel our economy forward:

  • Extend the payroll tax cut so that middle class families have more money in their paychecks next year.  If you’ve got more money in your paycheck, you’re more likely to spend it, and that means businesses of all sizes will have more customers.  They’ll be in a better position to hire.

We also need to make sure that millions of workers who are still pounding the pavement looking for jobs to support their families are not denied needed unemployment benefits.

If Congress fails to extend the payroll tax and unemployment insurance it could mean one million fewer jobs and half a percent less growth.

  • Pass a bipartisan infrastructure bill. There are over a million construction workers out of work after the housing boom went bust, just as a lot of America needs rebuilding.  We can connect the two by helping private companies rebuild our roads and bridges and railways.
  • Pass the patent reform bill to give our entrepreneurs the chance to get their job-creating ideas to market faster by streamlining the patent process.
  • Pass the trade agreements that will help businesses sell more American-made goods and services to Asia and South America, supporting tens of thousands of jobs here at home.

Trade Adjustment Assistance Fact Sheet
South Korea Free Trade Agreement
Colombia Free Trade Agreement
Panama Free Trade Agreement

Full Text US Economy in Crisis August 6, 2011: Republican GOP Candidates React to S&P’s Downgrade of US Credit Rating from AAA to AA+

POLITICAL SPEECHES & DOCUMENTS

OBAMA PRESIDENCY & THE 112TH CONGRESS:

QUOTES

GOP candidates react to credit rating downgrade

Source: USA Today, 8-6-11
JON HUNTSMAN

“Out-of-control spending and a lack of leadership in Washington have resulted in President Obama presiding over the first downgrade of the United States credit rating in our history.

“For far too long we have let reckless government spending go unchecked and the cancerous debt afflicting our nation has spread.

“We need new leadership in Washington committed to fiscal responsibility, a balanced budget, and job-friendly policies to get America working again.”

MICHELE BACHMANN

“Tonight’s decision by S&P to downgrade our credit rating to AA+ is a historically significant and serious event for the United States. The United States has had a AAA credit rating since 1917.

“That rating has endured the great depression, World War II, Korea, Vietnam and the terrorist attacks on 9/11. This president has destroyed the credit rating of the United States through his failed economic policies and his inability to control government spending by raising the debt ceiling.

“We were warned by all of the credit agencies that a failure to deal with our debt would lead to a downgrade in our credit rating, but instead he submitted a budget that had a $1.5 trillion deficit and then requested a $2.4 trillion blank check. President Obama is destroying the foundations of the U.S. economy one beam at a time.

“I call on the president to seek the immediate resignation of Treasury Secretary Timothy Geithner and to submit a plan with list of cuts to balance the budget this year, turn our economy around and put Americans back to work.”

NEWT GINGRICH

“The Obama disaster continues,” he said in a Twitter message at 8:54 p.m. “Highest food stamp level and lowest credit rating in history in the same 24 hours.”

MITT ROMNEY

“America’s creditworthiness just became the latest casualty in President Obama’s failed record of leadership on the economy.

“Standard & Poor’s rating downgrade is a deeply troubling indicator of our country’s decline under President Obama.

“His failed policies have led to high unemployment, skyrocketing deficits, and now, the unprecedented loss of our nation’s prized AAA credit rating. Today, President Obama promised that ‘things will get better.’

“But it has become increasingly clear that the only way things will get better is with new leadership in the White House.”

HERMAN CAIN

“On Tuesday, April 19, 2011, Treasury Secretary Tim Geithner promised that America faced ‘no risk’ of a credit downgrading. Less than six months later, he is proven shamefully wrong. As I have feared for months, the S&P has chosen to downgrade America’s credit rating from AAA, which we have always enjoyed, to AA+.

“Perhaps this is because the Obama Administration and Congressional Democrats never once demonstrated a willingness to propose its own ideas for meaningful spending cuts, something credit agencies signaled were necessary to redeem America’s financial standing in the world.

“As a corporate executive, I’ve rescued companies from the brink of bankruptcy and returned them to profitability. That involved balancing budgets or even creating them in the first place, something that the Democratic leadership in Congress hasn’t done for 828 days. If I couldn’t run companies without budgets, how can the government?

“I also had to make tough budgetary cuts to save companies. Leadership is about doing what’s right, even when it’s difficult. But somehow, that sort of idea was never floated among those within the Obama Administration.

“Now, Americans are fearful for their retirements and for their children’s educational savings. This is a country known for dreamers and innovators, for thinkers and doers. And now, we are a nation living in fear.

“This is a sad day for America. Such a rating is unfitting of the greatest and most prosperous nation the world has ever known. And such a weak leader is, as well.”

RON PAUL

“We have just learned that for the first time in our history, the United States’ top credit rating has been downgraded by credit rating agency S&P.

“We were told by proponents of increasing the debt ceiling that a credit downgrade would come if we didn’t raise the limit, but the opposite was true.

“The ratings agencies had been warning us for some time that it is imperative upon the U.S. government to get its fiscal house in order and tackle its debt and deficit problem by taking serious steps.

“Unfortunately, the game in Washington has been one of partisan blaming and bipartisan out-of-control spending.

“America has been dealing with this severe economic crisis for years because the Washington establishment failed to focus on the true issues at hand: a declining dollar and out-of-control spending.

“Last November, millions of frustrated Americans let it be known that they wanted our debt crisis solved and our spending problem to end. They sent a group of new lawmakers to Washington to end business as usual.

“But the old crowd of elites still refuses to budge on doing everything it takes to get us out of this hole they’ve dug. Instead of real substantial budget cuts, we get minor or ‘fake’ cuts and budget tricks that may or may not happen far off into the future. We get a Congress that abdicates its responsibility to an unconstitutional ‘Super Congress’ with the power to make things worse than they already are.

“The American people realize that our nation can no longer afford to stay on this same path of reckless spending and follow the status quo of Washington. They will not tolerate any further ineffective stimulus schemes that do nothing to help our economy and actually do the opposite to the tune of trillions of dollars in money being spent and printed, and millions of people remaining unemployed and without much economic stability or security.

“If Washington refuses to take heed, there is little cause for optimism.

“Growing inflation, rising gasoline and food prices, and trillion-dollar budget deficits will all soon seem like minor issues if our nation does not immediately change our monetary and spending policies.

“We must take bold actions to reduce out-of-control government spending, and get the federal government out of the way of small business and entrepreneurs so that they can start hiring again.

“If elected President, I pledge to veto any unbalanced budget and to balance the federal budget in the first year of my term. I will fight to reduce taxes and remove unconstitutional regulations so that businesses can hire, Americans can get back to work, and our economy can truly recover.”

RICK SANTORUM

“If this downgrade holds, then it’s another example in a long line of examples of the President’s failure of leadership. Is anyone surprised at this point? There are 14 million people out of work and looking to the White House for answers – but they are receiving nothing but a blank stare.

“The markets are scared and the credit downgrade has happened because the President and this Congress continue to address the symptoms and not the disease.

“This nation is spending more money than it takes in and the world knows it – now, it’s time to show the world that the United States has the fortitude and resolve to pass a Balanced Budget Amendment to stop out of control spending and shrink the scope of government once and for all. The deal the President cut with Congress was supposed to avoid this downgrade but all it did was once again kick the can down the road.

“President Obama and his Administration have been a failure.

“I understand the US Treasury is going back to Standard and Poors to say that a two trillion dollar mathematical error by S&P contributed to the downgrade. So, in addition to blaming President Bush for all of its problems, now the White House is blaming S&P – but this happened on the President’s watch – and he has to deal with it. I guess President Obama is left to cling to the ‘hope’ that a mathematical error caused this. Is that the “hope” the President was talking about?

“Folks, an AA rating should be so far in our rear view mirror that no mathematical error should affect it.

“Tonight, I’m saddened for the millions out of work – but I’m hopeful that I will replace Barack Obama as President and get this country and its economy moving again.”

TIM PAWLENTY

“This is a sad moment for the United States, but it’s a reflection that our country is in trouble. President Obama is inept when it comes to creating the conditions or job creation and economic growth. It’s time for a new direction and a new President.”

“The S&P downgrade blemishes our free Republic’s revolutionary experiment in liberty and self-government; consequently, it heartens tyrants and terrorists.

THADDEUS MCCOTTER

“We must reject recriminations, and unite to squarely face and fully conquer the fiscal challenge that threatens our prosperity and security.

“For as this downgrade underscores, only by restructuring big government into citizen-government will we keep our nation the world’s leading economy and affirm American exceptionalism throughout the 21st Century.”

Political Buzz US Economy in Crisis, August 6, 2011: S&P (Standard & Poor’s) Downgrades United States Credit Rating from Coveted AAA to AA+ Friday After Debt Bill & Repeated Warnings — US has Maintained AAA Rating since 1917

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.

OBAMA PRESIDENCY & THE 112TH CONGRESS:

S&P rating downgrade

These 15 countries (and the Isle of Man) have the world’s highest credit rating, AAA from both Moody’s and Standard & Poor’s. The U.S. lost that high standing Friday, when S&P downgraded it to a AA+ rating. (Note: New Zealand has also been downgraded from AAA to AA)

THE HEADLINES….

S&P downgrades U.S. credit rating: The United States credit rating was downgraded for the first time Friday night, after a bipartisan debt deal signed into law this week failed to assuage concerns about the nation’s growing spending, according to a person familiar with the matter.
Standard & Poor’s said it was reducing the U.S. credit rating from AAA to AA for the first time since it began assigning grades to countries in 1941. The credit rating agency warned several times this year that unless the government took steps to tame its debt, it could face a downgrade.

U.S. Long-Term Debt Downgraded by Standard & Poor’s: Standard & Poor’s removed the United States government from its list of risk-free borrowers on Friday night, citing concern about the rising burden of long-term federal debt.
The ratings agency had threatened the downgrade if the government did not act to reduce the federal debt by at least $4 trillion over the next decade. Earlier this week, Congress instead passed a plan to reduce the debt by at least $2.1 trillion.
Two other ratings agencies, Moody’s and Fitch, both have said that they have no immediate plan to downgrade the country’s credit rating, giving the government more time to make progress on debt reduction. The split verdict limits the impact of the S.&P. downgrade as many consequences would only be triggered by a reduction by at least two agencies.

“The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.” — S&P

“The political brinkmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.”… – S&P

“The dysfunctional status of Washington has resulted in the first ever downgrade of the credit rating of the United States’ debt by Standard and Poor’s. Only time will tell whether this will have an adverse effect on prevailing interest rates paid on new U.S debt. If it does, it will only serve to compound our current economic challenges and longer-term fiscal outlook.” — Former Comptroller General David Walker.

“The action by S&P reaffirms the need for a balanced approach to deficit reduction that combines spending cuts with revenue-raising measures like closing taxpayer-funded giveaways to billionaires, oil companies and corporate jet owners. This makes the work of the joint committee all the more important, and shows why leaders should appoint members who will approach the committee’s work with an open mind — instead of hardliners who have already ruled out the balanced approach that the markets and rating agencies like S&P are demanding.” — Senate Majority Leader Harry Reid.

“This is a wake-up call for Washington to get serious about fixing our debt problem. Many of us have long argued that Congress must make the hard choices to address this issue immediately, and I can only hope this helps others in Washington and around the country understand our urgency. Substantial, meaningful reform that results in a pro-growth tax system, entitlement reforms and spending reductions must be implemented as soon as possible.” — Republican Sen. Chris Chambliss of Georgia.

“The deal Congress just passed over conservative objections has already had its obvious effect, the loss of America’s credibility around the world. The deal was not a serious attempt to solve our spending and debt problem, it was a political solution meant to kick the can down the road. The only real solution to our spending and debt crisis was Cut, Cap & Balance that the president rejected out of hand.” — Republican Sen. Jim DeMint of South Carolina.

“As S&P stated, ‘The transparency and accountability of institutions bear directly on sovereign creditworthiness because they reinforce the stability and predictability both of political institutions and the political framework.’ The American people are watching to see if the bipartisan Joint Committee will develop a plan to responsibly reduce the deficit in a balanced way while promoting economic growth and creating jobs.” — House Democratic leader Nancy Pelosi.

“Tonight’s decision by S&P to downgrade our credit rating to AA+ is a historically significant and serious event for the United States. The United States has had a AAA credit rating since 1917. That rating has endured the great depression, World War II, Korea, Vietnam and the terrorist attacks on 9/11. This president has destroyed the credit rating of the United States through his failed economic policies and his inability to control government spending by raising the debt ceiling.” — GOP presidential candidate Michelle Bachmann, a Minnesota congresswoman.

“America’s creditworthiness just became the latest casualty in President Obama’s failed record of leadership on the economy. Standard & Poor’s rating downgrade is a deeply troubling indicator of our country’s decline under President Obama. His failed policies have led to high unemployment, skyrocketing deficits, and now, the unprecedented loss of our nation’s prized AAA credit rating.” — GOP presidential candidate Mitt Romney, former Massachusetts governor.

    • GOP candidates react to credit rating downgrade: Standard & Poor’s, a major investment consulting agency, downgraded the United States from its top status on Friday night, saying that the dependability of US policy making had reached a significant low. … – USA Today, 7-29-11

AAA to AA+: Here come the battery jokes! — CNN Money, 8-6-11

“They’ve changed the US from AAA to AA. All this time and they didn’t realise they were using the wrong batteries.”…
“Until today I didn’t even know America ran on batteries, never mind what size.”…
“Until today I didn’t even know America ran on batteries, never mind what size.”…
“Caught a just downgraded AA+ 11-inch Maine bass. Gotta cross to Canada across lake for AAA fish!” — Economist Nouriel Roubini

    • Ouch! U.S. booted from Triple-A debt club CNN Money, 8-6-11
    • Barack Obama under fire as blame game follows US credit downgrade: Left and right turn on president, raising questions over his chances of winning the White House again… – Guardian, UK, 8-6-11
    • S&P downgrades US credit rating from AAA: The United States has lost its coveted top AAA credit rating. Credit rating agency Standard & Poor’s on Friday downgraded the nation’s rating for the first time since the U.S. won the top ranking in 1917. The move came after Congress haggled over budget cuts and the nation’s borrowing limit — and failed to cut enough government spending to satisfy S&P. The issue has contributed to convulsions in financial markets.
      The drop in the rating by one notch to AA-plus was expected. The three main credit agencies, which also include Moody’s Investor Service and Fitch, had warned during the budget fight that if Congress did not cut spending far enough, the country faced a downgrade. S&P said that it is making the move because the deficit reduction plan passed by Congress on Tuesday did not go far enough to stabilize the country’s debt situation. Moody’s said Friday it was keeping its AAA rating on the nation’s debt, but that it might still lower it…. – AP, 8-5-11
    • U.S. sources: S&P focused too much on debt-limit politics: Standard & Poor’s focused too much on the messy political process leading to a debt-limit hike and made a $2-trillion error in its calculations about U.S. finances, sources familiar with the discussions claimed on Friday night.
      The error was centered in the ratings agency’s estimates of discretionary spending and was pointed out by Treasury and it raised questions about S&P’s credibility, the sources said…. – Reuters, 8-5-11
    • S& P’s Analysis Was Flawed by $2 Trillion Error, Treasury Says: The Standard & Poor’s decision to downgrade the U.S. credit rating was flawed by a $2 trillion error, according to a Treasury Department spokesman.
      S& P lowered the nation’s AAA credit rating one level to AA+ yesterday, after warning on July 14 that it would reduce the ranking in the absence of a “credible” plan to lower deficits even if the nation’s $14.3 trillion debt limit were lifted. The outlook was kept as “negative.”
      The ratings company said that the deficit-cutting plan signed by President Barack Obama this week after months of wrangling with Congress falls short of what “would be necessary to stabilize the government’s medium-term debt dynamics.”
      The Treasury disagreed with S& P’s assessment and judged the analysis was carried out hastily, said a person familiar with the matter who declined to be identified because the discussions were private.
      The ratings firm erred in estimating discretionary spending levels at $2 trillion higher than what the Congressional Budget Office estimates, the person said…. – Bloomberg, 8-5-11
    • Obama briefed on S&P downgrade before leaving White House: President Barack Obama was briefed in advance on Friday on Standard & Poor’s intention to downgrade the United States’ top-notch AAA credit rating and has continued receiving updates from top aides, an administration official said.
      Obama left the White House for the Camp David presidential retreat outside Washington in late afternoon just hours before S&P’s announcement. “He was briefed before he left for Camp David and has been receiving updates through the night,” the official said…. – Reuters, 8-6-11
    • US loses AAA rating for first time: Standard & Poor’s has cut the US credit rating for the first time in history, saying the country’s politicians are increasingly unable to come to grips with its massive fiscal deficit and debt load.
      S&P cut the US rating from its top-flight triple-A one notch to AA+, and added a negative outlook to it, saying there was a chance it could be downgraded again within two years if progress is not made cutting the huge government budget gap. amp; It was the first time the US was downgraded since it received an AAA rating from Moody’s in 1917; it has held the S&P rating since 1941…. – AFP, 8-5-11
    • S&P Strips U.S. of Top Credit Rating: Unprecedented Downgrade Comes After Last-Minute Standoff; Treasury Says Decision Is ‘Flawed by a $2 Trillion Error’
      A cornerstone of the global financial system was shaken Friday when officials at ratings firm Standard & Poor’s said U.S. Treasury debt no longer deserved to be considered among the safest investments in the world.
      S&P removed for the first time the triple-A rating the U.S. has held for 70 years, saying the budget deal recently brokered in Washington didn’t do enough to address the gloomy long-term picture for America’s finances. It downgraded U.S. debt to AA+, a score that ranks below Liechtenstein and more than a dozen other countries, and on par with Belgium and New Zealand.
      The unprecedented move came after several hours of high-stakes drama. It began in the morning, when word leaked that a downgrade was imminent and stocks tumbled. Around 1:30 p.m., S&P officials notified the Treasury Department that they planned to downgrade U.S. debt and presented the government with their findings. Treasury officials noticed a $2 trillion error in S&P’s math that delayed an announcement for several hours. S&P officials decided to move ahead anyway, and after 8 p.m. they made their downgrade official…. – WSJ, 8-5-11
    • S& P downgrades U.S. credit rating for first time: Standard & Poor’s announced Friday night that it has downgraded the United States credit rating for the first time, dealing a huge symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system.
      Lowering the nation’s rating one-notch below AAA, the credit rating company said “political brinkmanship” in the debate over the debt had made the U.S. government’s ability to manage its finances “less stable, less effective and less predictable.” It said the bi-partisan agreement reached this week to find $2.1 trillion in budget savings “fell short” of what was necessary to tame the nation’s debt over time and predicted that leaders would have no luck achieving more savings later on.
      The decision came after a day of furious back-and-forth between the Obama administration and S&P. Government officials fought back hard, arguing that S&P made a flawed analysis of the potential for political agreement and had mathematical errors in its initial analysis, which was submitted to the Treasury earlier in the day. The analysis overstated the U.S. deficit over 10 years by $2 trillion. “A judgment flawed by a $2 trillion error speaks for itself,” a Treasury spokesperson said Friday…. – WaPo, 8-5-11
    • S&P Cuts US Credit Rating For First Time In Modern History: Standard & Poor’s took the unprecedented step of downgrading the U.S. government’s “AAA” sovereign credit rating Friday in a move that could send shock waves through global financial markets and potentially undermine world economic growth.
      In a press release, S&P, cut its top-notch long-term credit rating for the U.S. Treasury’s debt to AA+ with a negative outlook. It is the first time in modern history that one of the three main ratings firms has stripped the U.S. of its coveted AAA rating.
      S&P warned last month that if the U.S. government didn’t approve a credible medium-term plan to shrink its fiscal shortfall, it would downgrade the rating even if Congress approved a debt deal that raised the Treasury’s borrowing limit. On Tuesday, just in time for a deadline to avoid default, U.S. lawmakers passed a bill increasing the U.S. debt ceiling by $2.1 trillion. However, the amount of planned quid- pro-quo deficit cuts ran to $2.4 trillion, well short of the $4 trillion that S&P had suggested was needed to put the nation’s fiscal house in order.
      Some market participants have warned that the tepid pace of economic recovery means that even deeper fiscal cuts may be needed to reduce the share of public debt to U.S. gross domestic product, a closely watched gauge of a nation’s fiscal health…. – WSJ, 8-5-11
    • S&P downgrades U.S. credit rating: The agency says the level of cuts in the debt ceiling compromise ‘falls short’ and that intense partisanship in Washington hurts prospects for a solution.
      Standard & Poor’s downgraded the U.S. government’s credit rating Friday for the first time in history, saying the recent plan worked out to raise the federal debt ceiling “falls short” of what’s needed to stabilize the nation’s longer-term finances.
      The credit rating agency also said the partisan stalemate that put the U.S. on the brink of default this week did not bode well for efforts to reduce the nation’s soaring debt…. – LAT, 8-6-11

“On one hand, there is a case to be made that the madness of the right has made America a fundamentally unsound nation. And yes, it is the madness of the right: if not for the extremism of anti-tax Republicans, we would have no trouble reaching an agreement that would ensure long-run solvency,” he said, referring to protracted negotiations on the US debt ceiling in which conservative Republicans insisted on deep budget cuts.
“it’s hard to think of anyone less qualified to pass judgment on America than the rating agencies. The people who rated subprime-backed securities are now declaring that they are the judges of fiscal policy? Really?” — Liberal economist Paul Krugman, a Nobel Prize winner, in the New York Times

    • US media concerned over rating downgrade: US commentators have expressed concern on Standard & Poor’s decision to cut the US credit rating, with some blaming the setback on conservative Republicans…. – AP, 8-6-11

“No risk,” Timothy Geithner told Fox Business at the time. When asked whether S&P was wrong and that the U.S. would keep its top credit rating, Geithner said, “Absolutely”

    • Republicans Want Geithner to Walk The Plank After Credit Downgrade: With the U.S. losing its Triple-A credit rating for the first time ever, Republican lawmakers and presidential contenders are calling on President Obama to fire Treasury Secretary Timothy Geithner. Fox News, 8-6-11
    • After Downgrade, Debt Panel May Be Congress’s First Test: Friday’s downgrade of U.S. government debt raises pressure on a special “super committee” that lawmakers formed this week to try—once again—to reach a far-reaching budget deal. How Washington’s political culture responds to that charge could be one of the more important repercussions of the downgrade, outside the reactions of financial markets. And the special debt committee stands as the capital’s first test: Will lawmakers and the administration redouble their efforts to reach a broad budget-cutting deal or again descend into squabbles?… – WSJ, 8-6-11
    • S&P downgrade of US credit rating sends clear message to Congress: shape up: S&P, one of the three major credit-rating firms, downgraded its rating for US debt Friday night – a move that has the potential to further sppok global markets and drive up borrowing costs in the US. The reason for the downgrade, S&P said, was congressional dysfunction…. – CS Monitor, 8-6-11

“Americans expect to be No. 1 at everything… a great insult and humiliating to the country…. If this brings rising interest rates on credit cards and mortgages, it is going to send a political shockwave throughout the system, and there will definitely be a ‘throw-the-bums-out’ mentality.” — Republican strategist Ron Bonjean.

“Most people understand the inability to satisfy the bond-ratings agencies was not Obama’s alone… Congress gets much more than half of the blame for this. Blame generally falls on the president when something like this happens.” — Ross Baker, a political scientist at Rutgers University in New Brunswick, New Jersey

  • S&P Downgrade May Cloud Obama Re-Election Bid Even as It Damages Congress: The downgrade of the U.S.’s AAA credit rating by Standard &’ Poor’s darkens President Barack Obama’s re-election chances while also damaging members of Congress from both parties as they prepare for the 2012 campaign, political analysts said.
    With Obama’s job-approval rating at 48 percent and an all- time high of 82 percent of Americans giving Congress negative marks in a New York Times/CBS News Poll taken this week, the downgrade will hurt the president and lawmakers by fueling economic uncertainty, possibly raising interest rates and wounding national pride, analysts said.
    S&P’s move deals a blow to Obama’s political standing by giving Republican presidential candidates the chance to attack him for being the first U.S. president to preside over a downgrade, said Ross Baker, a political scientist at Rutgers University in New Brunswick, New Jersey…. Bloomberg, 8-6-11

Political Highlights Debt Ceiling Showdown Recap July 18-24, 2011: 2 Plans, 8 Days No Debt Deal in Sight — Will the US Default on August 2, 2011?

POLITICAL HIGHLIGHTS

By Bonnie K. Goodman

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

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 NecessaryHuff 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…
    TALKS RESUME…
    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 EconomyWH, 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 —

    NYT, 7-19-11

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

Political Buzz Debt Ceiling Showdown, July 24, 2011: Debt Plan Goal — Asian Markets Opening, Boehner Promises Republicans Unilateral Debt Plan, Reid Works on Backup Plan — Obama Meets with Reid & Pelosi

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 LEADER

U.S. Speaker of the House John Boehner (R-OH) arrives at the U.S. Capitol on Sunday.
Win McNamee/Getty
U.S. Speaker of the House John Boehner (R-OH) arrives at the U.S. Capitol on Sunday.

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
  • 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
  • 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

Political Buzz Debt Ceiling Showdown, July 23, 2011: Obama’s Unsucessful Meeting with Congressional Leaders Day After Debt Deal Talks Break Down with Speaker Boehner

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 LEADERPresident Barack Obama sits next to House Speaker John Boehner of Ohio, left, in the Cabinet Room of the White House, Saturday, July 23, 2011, in Washington, as they meet to discuss the debt. (AP Photo/Carolyn Kaster) Photo: Carolyn Kaster / AL

President Barack Obama sits next to House Speaker John Boehner of Ohio, left, in the Cabinet Room of the White House, Saturday, July 23, 2011, in Washington, as they meet to discuss the debt. (AP Photo/Carolyn Kaster)

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 EconomyWH, 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

Political Buzz Debt Ceiling Showdown, July 18, 19, 2011: Congress Votes & Passes Debt Plan, Speaker John Boehner’s Press Conference, Gang of Six’s Compromise Gains Traction

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

House Speaker John A. Boehner

House Speaker John A. Boehner passes a poster urging President Obama to offer his own debt plan after a news conference Monday on Capitol Hill. (Mark Wilson, Getty Images)

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.

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

Full Text July 19, 2011: President Obama Speech to Press on Deficit Talks: “We’re in the 11th Hour”

POLITICAL SPEECHES & DOCUMENTS

DEBT CEILING SHOWDOWN: OBAMA VS CONGRESSIONAL LEADERS

President Barack Obama on Efforts to Find a Balanced Approach to Deficit Reduction

President Barack Obama delivers a statement in the James S. Brady Press Briefing Room on the status of efforts to find a balanced approach to deficit reduction, July 19, 2011. (Official White House Photo by Chuck Kennedy)

President Obama on Deficit Talks: “We’re in the 11th Hour”

Source: WH, 7-19-11Transcript

Download Video: mp4 (69MB) | mp3 (7MB)
Over the weekend, President Obama continued to urge both parties to come together around a balanced package to deficit reduction. Today, the President provided an update on the efforts to lift the debt ceiling and also tackle the underlying challenges we face with our national debt and deficits:

Remarks by the President on the Status of Efforts to Find a Balanced Approach to Deficit Reduction

James S. Brady Press Briefing Room

1:32 P.M. EDT

THE PRESIDENT:  Hello, everybody.  I wanted to give folks a quick update on the progress that we’re making on the debt ceiling discussions.

I was in contact with all the leadership over the course of the weekend and continued to urge both Democrats and Republicans to come together around an approach that not only lifts the debt ceiling but also solves the underlying challenges that we face when it comes to debt and deficits.

Some progress was made in some of the discussions, some narrowing of the issues.  Speaker Boehner and the Republican House caucus felt it necessary to put forward the plan that they’re going to be voting on today.  I think everyone’s estimation is, is that that is not an approach that could pass both chambers, it’s not an approach that I would sign and it’s not balanced.  But I understand the need for them to test that proposition.

The problem we have now is we’re in the 11th hour and we don’t have a lot more time left.  The good news is that today a group of senators, the Gang of Six, Democrats and Republicans — I guess now Gang of Seven, because one additional Republican senator added on — put forward a proposal that is broadly consistent with the approach that I’ve urged.  What it says is we’ve got to be serious about reducing discretionary spending both in domestic spending and defense; we’ve got to be serious about tackling health care spending and entitlements in a serious way; and we’ve got to have some additional revenue so that we have an approach in which there is shared sacrifice and everybody is giving up something.

And so, for us to see Democratic senators acknowledge that we’ve got to deal with our long-term debt problems that arise out of our various entitlement programs, and for Republican senators to acknowledge that revenues will have to be part of a balanced package that makes sure that nobody is disproportionately hurt from us making progress on the debt and deficits I think is a very significant step.  And as I said, the framework that they put forward is broadly consistent with what we’ve been working on here in the White House and with the presentations that I’ve made to the leadership when they’ve come over here.

So here’s where we stand.  We have a Democratic President and administration that is prepared to sign a tough package that includes both spending cuts, modifications to Social Security, Medicaid and Medicare that would strengthen those systems and allow them to move forward, and would include a revenue component.  We now have a bipartisan group of senators who agree with that balanced approach.  And we’ve got the American people who agree with that balanced approach.

My hope, and what I will be urging Speaker Boehner, Nancy Pelosi, as well as Leader Reid and Mitch McConnell, is that they, tomorrow, are prepared to start talking turkey and actually getting down to the hard business of crafting a plan that can move this forward in time for the August 2nd deadline that we’ve set forward.

Just a couple of other points I will make.  Some of you may ask, what does it mean for the plan that Senator McConnell and Senator Reid had been working on?  Our attitude is, is that that continues to be a necessary approach to put forward.  In the event that we don’t get an agreement, at minimum, we’ve got to raise the debt ceiling.  So that’s the bare minimum that has to be achieved, but we continue to believe that we can achieve more.

And so I want to congratulate the Gang of Six for coming up with a plan that I think is balanced.  We just received it, so we haven’t reviewed all the details of it.  It would not match perfectly with some of the approaches that we’ve taken, but I think that we’re in the same playing field.  And my hope is, is that we can start gathering everybody over the next couple of days to choose a clear direction and to get this issue resolved.
So far, at least, the markets have shown confidence that leadership here in Washington are not going to send the economy over a cliff.  But if we continue to go through a lot of political posturing, if both sides continue to be dug in, if we don’t have a basic spirit of cooperation that allows us to rise above immediate election-year politics and actually solve problems, then I think markets here, the American people, and the international community are going to start reacting adversely fairly quickly.

So I think it’s very important for in these next couple of days to understand we don’t have any more time to engage in symbolic gestures; we don’t have any more time to posture.  It’s time to get down to the business of actually solving this problem.  And I think we now are seeing the potential for a bipartisan consensus around what that would take.

It will be hard.  It will be tough.  There are still going to be a lot of difficult negotiations that have to take place in order for us to actually get something done.  And as I said, we have to have that failsafe that Senator McConnell and Senator Reid are working on.  But the hope is, is that everybody seizes this opportunity.

All right?  Okay, guys, I’m going to let Jay answer questions today.  I think I’ve been pretty good to you guys.  (Laughter.)  But after the votes today in the House, I’ll call up Speaker Boehner and the other leadership and we’ll arrange for times where we bring folks back here, and hopefully we’ll be able to report on some additional progress over the next few days.

All right?  Thank you very much, guys.

Q    When will you announce whether you will be supporting the Gang of Six plan?  Would that be in the next day?

THE PRESIDENT:  Well, as I said, I think what you’re going to be seeing is an evaluation of that plan versus the things that we’ve been looking at.  I think what you’re going to see is some significant overlap.  But obviously just because we might agree in principle with a range of issues with six senators or seven senators, that doesn’t get us out of the House of Representatives; that doesn’t get us out of the Senate.  There’s going to have to be a broader agreement on the part of all the leadership that we’re going to get this done in a serious way, and we’ve got a tight deadline to do it.

All right?  Thanks, guys.

END 1:38 P.M. EDT

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

POLITICAL HIGHLIGHTS

By Bonnie K. Goodman

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

By Bonnie K. Goodman

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

THE HEADLINES: DEBT CEILING SHOWDOWN: OBAMA VS CONGRESSIONAL LEADERS

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

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

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

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

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

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

JULY 18, 2011: BIPARTISAN SENATE DEBT PLAN EMERGES

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

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

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

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

JULY 16, 2011: DEBT CEILING DEAL DEADLINE

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

JULY 12, 2011: WHITE HOUSE MEETINGS CONTINUE

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

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

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

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

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

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

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

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

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

    WaPo, 7-7-11

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

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

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

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

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

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

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

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

    END 1:05 P.M. EDT — WH, 7-11-11

JULY 5, 2011: OBAMA’S SUMMONS CONGRESS

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

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

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

    END 4:54 P.M. EDT

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

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

Political Buzz July 15, 2011: Debt Ceiling Showdown: Obama’s Second Press Conference This Week — Boehner also Speaks to Press

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

President Obama holds a news conference
White House Photo, Lawrence Jackson, 7/15/11

According to a Gallup poll released this week, 20% of Americans favor an approach that includes only spending cuts. Nearly a third — 32% — said they favored a deal created “equally with spending cuts and tax increases” and 30% said the deal should be made “mostly with spending cuts.” Only 4% favored a deal done just with tax increases. – USA Today, 7-15-11

Various options for Obama, debt showdown foes in Congress: President Barack Obama, House Republicans and Senate leaders Mitch McConnell, R-Ky., and Harry Reid, D-Nev., have competing ideas about how to handle the need to increase the government’s borrowing limit and cut the budget. Highlights include…. – WaPo, 7-15-11

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

House Speaker John A. Boehner spoke to reporters at the Capitol on Friday morning about the debt negotiations.

Philip Scott Andrews/The New York TimesHouse Speaker John A. Boehner spoke to reporters at the Capitol on Friday morning about the debt negotiations.

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

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

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

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

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

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

Full Text Debt Ceiling Showdown, July 15, 2011: President Obama’s Second Press Conference This Week on the Debt Ceiling Negotiations

POLITICAL SPEECHES & DOCUMENTS

DEBT CEILING SHOWDOWN: OBAMA VS CONGRESSIONAL LEADERS

President Obama holds a news conference
White House Photo, Lawrence Jackson, 7/15/11

The President on Debt Negotiations: 80 Percent of the American People Support a Balanced Approach

Source: WH, 7-15-11

President Obama today challenged Congressional leaders to step back and look at what is good for the country in a press conference held to address the ongoing negotiations on raising the debt ceiling.

He stressed that while Washington has been “obsessing” over the debate, what the “American people are obsessing about right now is that unemployment is still way too high and too many folks’ homes are still underwater, and prices of things that they need, not just that they want, are going up a lot faster than their paychecks are if they’ve got a job.”

The President also said that he retains hope that the talks will produce a meaningful outcome and that there is still time to put together a “big deal”.

Press Conference by the President

James S. Brady Press Briefing Room

Source: WH Transcript, 7-15-11

10:58 A.M. EDT

THE PRESIDENT:  Hello, everybody.  As you know, yesterday we had another meeting with the congressional leaders.  We’re not having one today, so I thought it would be useful to give you guys an update on where we are.

All the congressional leaders have reiterated the desire to make sure that the United States does not default on our obligations, and that the full faith and credit of the United States is preserved.  That is a good thing.  I think we should not even be this close to a deadline on this issue; this should have been taken care of earlier.  But it is encouraging that everybody believes that this is something that has to be addressed.

And for the general public — I’ve said this before but I just want to reiterate — this is not some abstract issue.  These are obligations that the United States has taken on in the past.  Congress has run up the credit card, and we now have an obligation to pay our bills.  If we do not, it could have a whole set of adverse consequences.  We could end up with a situation, for example, where interest rates rise for everybody all throughout the country, effectively a tax increase on everybody, because suddenly whether you’re using your credit or you’re trying to get a loan for a car or a student loan, businesses that are trying to make payroll, all of them could end up being impacted as a consequence of a default.

Now, what is important is that even as we raise the debt ceiling, we also solve the problem of underlying debt and deficits.  I’m glad that congressional leaders don’t want to default, but I think the American people expect more than that.  They expect that we actually try to solve this problem, we get our fiscal house in order.

And so during the course of these discussions with congressional leaders, what I’ve tried to emphasize is we have a unique opportunity to do something big.  We have a chance to stabilize America’s finances for a decade, for 15 years, or 20 years, if we’re wiling to seize the moment.

Now, what that would require would be some shared sacrifice and a balanced approach that says we’re going to make significant cuts in domestic spending.  And I have already said I am willing to take down domestic spending to the lowest percentage of our overall economy since Dwight Eisenhower.

It also requires cuts in defense spending, and I’ve said that in addition to the $400 billion that we’ve already cut from defense spending, we’re willing to look for hundreds of billions more.

It would require us taking on health care spending.  And that includes looking at Medicare and finding ways that we can stabilize the system so that it is available not just for this generation but for future generations.

And it would require revenues.  It would require, even as we’re asking the person who needs a student loan or the senior citizen or people — veterans who are trying to get by on a disability check — even as we’re trying to make sure that all those programs are affordable, we’re also saying to folks like myself that can afford it that we are able and willing to do a little bit more; that millionaires and billionaires can afford to do a little bit more; that we can close corporate loopholes so that oil companies aren’t getting unnecessary tax breaks or that corporate jet owners aren’t getting unnecessary tax breaks.

If we take that approach, then I am confident that we can not only impress the financial markets, but more importantly, we can actually impress the American people that this town can actually get something done once in a while.

Now, let me acknowledge what everybody understands:  It is hard to do a big package.  My Republican friends have said that they’re not willing to do revenues and they have repeated that on several occasions.

My hope, though, is that they’re listening not just to lobbyists or special interests here in Washington, but they’re also listening to the American people.  Because it turns out poll after poll, many done by your organizations, show that it’s not just Democrats who think we need to take a balanced approach; it’s Republicans as well.

The clear majority of Republican voters think that any deficit reduction package should have a balanced approach and should include some revenues.  That’s not just Democrats; that’s the majority of Republicans.  You’ve got a whole slew of Republican officials from previous administrations.  You’ve got a bipartisan commission that has said that we need revenues.

So this is not just a Democratic understanding; this is an understanding that I think the American people hold that we should not be asking sacrifices from middle-class folks who are working hard every day, from the most vulnerable in our society — we should not be asking them to make sacrifices if we’re not asking the most fortunate in our society to make some sacrifices as well.

So I am still pushing for us to achieve a big deal.  But what I also said to the group is if we can’t do the biggest deal possible, then let’s still be ambitious; let’s still try to at least get a down payment on deficit reduction.  And that we can actually accomplish without huge changes in revenue or significant changes in entitlements, but we could still send a signal that we are serious about this problem.

The fallback position, the third option and I think the least attractive option, is one in which we raise the debt ceiling but we don’t make any progress on deficit and debt.  Because if we take that approach, this issue is going to continue to plague us for months and years to come.  And I think it’s important for the American people that everybody in this town set politics aside, that everybody in this town set our individual interests aside, and we try to do some tough stuff.  And I’ve already taken some heat from my party for being willing to compromise.  My expectation and hope is, is that everybody, in the coming days, is going to be willing to compromise.

The last point I’ll make and then I’ll take questions — we are obviously running out of time.  And so what I’ve said to the members of Congress is that you need, over the next 24 to 36 hours, to give me some sense of what your plan is to get the debt ceiling raised through whatever mechanisms they can think about, and show me a plan in terms of what you’re doing for deficit and debt reduction.

If they show me a serious plan, I’m ready to move, even if requires some tough decisions on my part.  And I’m hopeful that over the next couple of days we’ll see logjam break — this logjam broken, because the American people I think understandably want to see Washington do its job.  All right?

So with that, let me see who’s on the list.  We’re going to start with Jake Tapper.

Q    Thank you, Mr. President.  You’ve said that reducing the deficit will require shared sacrifice.  We know — we have an idea of the taxes that you would like to see raised on corporations and on Americans in the top two tax brackets, but we don’t yet know what you specifically are willing to do when it comes to entitlement spending.  In the interest of transparency, leadership, and also showing the American people that you have been negotiating in good faith, can you tell us one structural reform that you are willing to make to one of these entitlement programs that would have a major impact on the deficit?  Would you be willing to raise the retirement age?  Would you be willing to means test Social Security or Medicare?

THE PRESIDENT:  We’ve said that we are willing to look at all those approaches.  I’ve laid out some criteria in terms of what would be acceptable.  So, for example, I’ve said very clearly that we should make sure that current beneficiaries as much as possible are not affected.  But we should look at what can we do in the out-years, so that over time some of these programs are more sustainable.

I’ve said that means testing on Medicare, meaning people like myself, if — I’m going to be turning 50 in a week.  So I’m starting to think a little bit more about Medicare eligibility.  (Laughter.)  Yes, I’m going to get my AARP card soon — and the discounts.

But you can envision a situation where for somebody in my position, me having to pay a little bit more on premiums or co-pays or things like that would be appropriate.  And, again, that could make a difference.  So we’ve been very clear about where we’re willing to go.

What we’re not willing to do is to restructure the program in the ways that we’ve seen coming out of the House over the last several months where we would voucherize the program and you potentially have senior citizens paying $6,000 more.  I view Social Security and Medicare as the most important social safety nets that we have.  I think it is important for them to remain as social insurance programs that give people some certainty and reliability in their golden years.

But it turns out that making some modest modifications in those entitlements can save you trillions of dollars.  And it’s not necessary to completely revamp the program.  What is necessary is to say how do we make some modifications, including, by the way, on the providers’ side.  I think that it’s important for us to keep in mind that drug companies, for example, are still doing very well through the Medicare program.  And although we have made drugs more available at a cheaper price to seniors who are in Medicare through the Affordable Care Act, there’s more work to potentially be done there.

So if you look at a balanced package even within the entitlement programs, it turns out that you can save trillions of dollars while maintaining the core integrity of the program.

Q    And the retirement age?

THE PRESIDENT:  I’m not going to get into specifics.  As I said, Jake, everything that you mentioned are things that we have discussed.  But what I’m not going to do is to ask for even — well, let me put it this way:  If you’re a senior citizen, and a modification potentially costs you a hundred or two hundred bucks a year more, or even if it’s not affecting current beneficiaries, somebody who’s 40 today 20 years from now is going to end up having to pay a little bit more.

The least I can do is to say that people who are making a million dollars or more have to do something as well.  And that’s the kind of tradeoff, that’s the kind of balanced approach and shared sacrifice that I think most Americans agree needs to happen.

Q    Thank you.

THE PRESIDENT:  Hans.

Q    Yes.  Thank you, Mr. President.  I just thought I heard you kind of open up the door to this middle-of-the-road possibility.  I think you said, “Show me a serious plan, and then I’m prepared to move.”  Just a few minutes before you came here, House Republicans said they’d be voting on this $2.4 trillion package as a balanced budget amendment.  Is that a serious plan?  Is it dead on arrival, or does it short-circuit what you expect to happen in the next 24, 36 hours?

THE PRESIDENT:  I haven’t looked at it yet, and I think — my expectation is that you’ll probably see the House vote on a couple of things just to make political statements.  But if you’re trying to get to $2.4 trillion without any revenue, then you are effectively gutting a whole bunch of domestic spending that is going to be too burdensome and is not going to be something that I would support.

Just to be very specific, we’ve identified over a trillion dollars in discretionary cuts, both in defense and domestic spending.  That’s hard to do.  I mean, that requires essentially that you freeze spending.  And when I say freeze, that means you’re not getting inflation so that these are programmatic cuts that, over the course of 10 years, you’d be looking at potentially a 10 percent cut in domestic spending.

Now, if you then double that number, you’re then, at that point, really taking a big bite out of programs that are really important to ordinary folks.  I mean, you’re talking then about students accumulating thousands of dollars more in student loan debt every year; you’re talking about federal workers and veterans and others potentially having to pay more in terms of their health care.

So I have not seen a credible plan — having gone through the numbers — that would allow you to get to $2.4 trillion without really hurting ordinary folks.  And the notion that we would be doing that, and not asking anything from the wealthiest among us or from closing corporate loopholes — that doesn’t seem like a serious plan to me.

I mean, the notion that, for example, oil company tax breaks, where the oil executives themselves say that they probably don’t need them, to have an incentive to go out and drill oil and make hundreds of billions of dollars — if we haven’t seen the other side even budge on that, then I think most Democrats would say that’s not a serious plan.

One last point on the balanced budget amendment.  I don’t know what version they’re going to be presenting, but some of the balanced budget amendments that have been floating up there — this cap — or cut, cap and balance, for example, when you look at the numbers, what you’re looking at is cuts of half-a-trillion dollars below the Ryan budget in any given year. I mean, it would require cutting Social Security or Medicare substantially.

And I think it’s important for everybody to understand that all of us believe that we need to get to a point where eventually we can balance the budget.  We don’t need a constitutional amendment to do that; what we need to do is to do our jobs.

And we have to do it the same way a family would do it.  A family, if they get over-extended and their credit card is too high, they don’t just stop paying their bills.  What they do is they say, how do we start cutting our monthly costs?  We keep on making payments, but we start cutting out the things that aren’t necessary.  And we do it in a way that maintains our credit rating.  We do it in a way that’s responsible — we don’t stop sending our kids to college; we don’t stop fixing the boiler or the roof that’s leaking.  We do things in a sensible, responsible way.  We can do the same thing when it comes to the federal budget.

Q    So within that $2 trillion band, if you end up going for this middle-of-the-road package, which I think you referred to as “the second option,” would that need to have, for your signature, some sort of stimulative measures — either payroll tax extension or the extension of the unemployment insurance?

THE PRESIDENT:  I think both would be good for the economy.  A payroll tax cut is something that has put a thousand dollars in the pocket of the typical American family over the last six, seven months and has helped offset some of the rising costs in gasoline and food.  And I think that American consumers and American businesses would benefit from a continuation of that tax cut next year.

Unemployment insurance.  Obviously unemployment is still too high.  And there are a lot of folks out there who are doing everything they can to find a job, but the market is still tight out there.  And for us to make sure that they are able to stay in their homes, potentially, or they’re able to still support their families, I think is very important and contributes to the overall economy.

So I think there are ways that you can essentially take a little over a trillion dollars in serious discretionary cuts, meaningful discretionary cuts, and then start building on top of that some cuts in non-health care mandatory payments, ethanol programs, or how we calculate various subsidies to various industries.  That could potentially be layered on.  And we could still do something like a tax cut for ordinary families that would end up benefiting the economy as a whole.

That is not my preferable option, though.  I just want to be clear.  I think about this like a layer cake.  You can do the bare minimum and then you can make some progressively harder decisions to solve the problem more and more.

And we’re in a position now where if we’re serious about this and everybody is willing to compromise, we can, as I said before, fix this thing probably for a decade or more.  And that’s something that I think would be good for the overall business climate and would encourage the American people that Washington actually is willing to take care of its business.

Q    Good for the business — for the climate, though, but not required for your signature — is that what I heard?

THE PRESIDENT:  I’m sorry, I lost you on that one.

Q    So you’re saying these stimulative measures would be good for the business climate and good for the economy, but you’re not saying that they need to be included for you to sign either a $2 trillion or $4 trillion —

THE PRESIDENT:  I’ve got to look at an overall package, Hans.  I don’t know what the Speaker or Mr. McConnell are willing to do at this point.

Okay.  Chuck Todd.

Q    Mr. President, this process got kind of ugly in the last week.  And it appears from the outside that things even got a little futile at these meetings.  Any regrets on your role in how this went?  And do you have any regrets that you never took Bowles-Simpson, which was $4 trillion over 10 years, and spent the last six months selling that, which was a balanced package, to the American people?

THE PRESIDENT:  No.  First of all, I think this notion that things got ugly is just not true.  We’ve been meeting every single day and we have had very constructive conversations.

The American people are not interested in the reality TV aspects of who said what and did somebody’s feelings get hurt.  They’re interested in solving the budget problem and the deficit and the debt.  And so that may be good for chatter in this town; it’s not something that folks out in the country are obsessing about.

I think with respect to Bowles-Simpson, it was important for us to — Bowles-Simpson wouldn’t have happened had I not set up the structure for it.  As you will recall, this was originally bipartisan legislation that some of the Republican supporters of decided to vote against when I said I supported it — that seems to be a pattern that I’m still puzzled by.  And so we set it up.  They issued a report.  And what I said was this provides us an important framework to begin discussions.

But there were aspects of Bowles-Simpson that I said from very early on were not the approach I would take.  I’ll give you an example.  On defense spending, a huge amount of their savings on the discretionary side came out of defense spending.  I think we need to cut defense, but as Commander-in-Chief, I’ve got to make sure that we’re cutting it in a way that recognizes we’re still in the middle of a war, we’re winding down another war, and we’ve got a whole bunch of veterans that we’ve got to care for as they come home.

And so what we’ve said is a lot of the components of Bowles-Simpson we are willing to embrace — for example, the domestic spending cuts that they recommend we’ve basically taken.  Others, like on defense, we have taken some but not all the recommendations, because it’s important for it to be consistent with our defense needs and our security needs.

The bottom line is that this is not an issue of salesmanship to the American people; the American people are sold.  The American people are sold.  I just want to repeat this.  The whole —

Q    You don’t think the whole debate would have been different?  You had Republican support on it.

THE PRESIDENT:  Chuck —

Q    Tom Coburn, the Republican senator, signed onto it.

THE PRESIDENT:  Chuck, you have 80 percent of the American people who support a balanced approach.  Eighty percent of the American people support an approach that includes revenues and includes cuts.  So the notion that somehow the American people aren’t sold is not the problem.  The problem is members of Congress are dug in ideologically into various positions because they boxed themselves in with previous statements.

And so this is not a matter of the American people knowing what the right thing to do is.  This is a matter of Congress doing the right thing and reflecting the will of the American people.  And if we do that, we will have solved this problem.

Lori Montgomery.

Q    Thank you, Mr. President.  I wanted to ask you about the two trains that seem to be rolling down the tracks on the Hill.  Specifically, Leader McConnell has laid out an elaborate plan to raise the debt limit.  He said last night that it looks like they’re going to pair that with a new committee that would be tasked with coming up with the big solution that you talk about by the end of the year.  Your comment on that proposal.

Meanwhile, in the House, they’re saying, well, we can be flexible on some of our demands if we could get a balanced budget amendment.  And they note that Vice President Biden voted for a BBA in 1997.  Is there any way that that could be part of a solution?  Is there any version of a BBA that you would support?

THE PRESIDENT:  First of all, for the consumption of the general public, BBA meaning a balanced budget amendment.

Q    Thank you.

THE PRESIDENT:  I think I already addressed this question earlier.  We don’t need a constitutional amendment to do our jobs.  The Constitution already tells us to do our jobs — and to make sure that the government is living within its means and making responsible choices.

And so, this notion that we’re going to go through a multiyear process instead of seizing the moment now and taking care of our problems is a typical Washington response.  We don’t need more studies.  We don’t need a balanced budget amendment.  We simply need to make these tough choices and be willing to take on our bases.  And everybody knows it.  I mean, we could have a discussion right here about what the numbers look like and we know what’s necessary.

And here’s the good news — it turns out we don’t have to do anything radical to solve this problem.  Contrary to what some folks say, we’re not Greece, we’re not Portugal.  It turns out that our problem is we cut taxes without paying for them over the last decade; we ended up instituting new programs like a prescription drug program for seniors that was not paid for; we fought two wars, we didn’t pay for them; we had a bad recession that required a Recovery Act and stimulus spending and helping states — and all that accumulated and there’s interest on top of that.

And to unwind that, what’s required is that we roll back those tax cuts on the wealthiest individuals, that we clean up our tax code so we’re not giving out a bunch of tax breaks to companies that don’t need them and are not creating jobs, we cut programs that we don’t need, and we invest in those things that are going to help us grow.

And every commission that’s been out there has said the same thing and basically taken the same approach, within the margin of error.

So my general view is that if the American people looked at this, they’d say, boy, some of these decisions are tough, but they don’t require us to gut Medicare or Social Security.  They don’t require us to stop helping young people go to college.  They don’t require us to stop helping families who’ve got a disabled child.  They don’t require us to violate our obligations to our veterans.  And they don’t require “job-killing tax cuts.” [sic]  They require us to make some modest adjustments to get our house in order, and we should do it now.

With respect to Senator McConnell’s plan, as I said, I think it is a — it is constructive to say that if Washington operates as usual and can’t get anything done, let’s at least avert Armageddon.  I’m glad that people are serious about the consequences of default.

But we have two problems here.  One is raising the debt ceiling — this is a problem that was manufactured here in Washington, because every single one of the leaders over there have voted for raising the debt ceiling in the past — and has typically been a difficult, but routine process. And we do have a genuine underlying problem that our debt and deficits are too big.  So Senator McConnell’s approach solves the first problem.  It doesn’t solve the second problem.  I’d like to solve that second problem.

Q    But are you looking at this option as a more likely outcome at this point?  Or can you share with us why you have some hope that the talks that have been going on might actually produce an outcome?

THE PRESIDENT:  I always have hope.  Don’t you remember my campaign?  (Laughter.)  Even after being here for two-and-a-half years I continue to have hope.  You know why I have hope?  It’s because of the American people.  When I talk to them and I meet with them, as frustrated as they are about this town, they still reflect good common sense.  And all we have to do is align with that common sense on this problem, it can get solved.

And I’m assuming that at some point, members of Congress are going to listen.  I just want to repeat, every Republican — not — I won’t say every.  A number of Republican former elected officials — they’re not in office now — would say a balanced approach that includes some revenue is the right thing to do.  The majority of Republican voters say that approach is the right thing to do.  The proposal that I was discussing with Speaker Boehner fell squarely in line with what most Republican voters think we should do.  So the question is at what point do folks over there start listening to the people who put them in office?  Now is a good time.

Sam Youngman.

Q    Good morning, Mr. President.  I’d like to go back to something Chuck asked, his first question, about the tone of this debate.  I faintly remember your campaign.  And I’m guessing that while it hasn’t been ugly, as you say, it’s not what you had in mind when you said you wanted to change the tone in Washington.  When you have Senator McConnell making comments that he views these negotiations through the prism of 2012, how much does that poison the well?  And going forward, if — big if — you can get a deal on this, can you get anything done with Congress for the next year and a half?

THE PRESIDENT:  Well, let me say this.  And I’m not trying to poke at you guys.  I generally don’t watch what is said about me on cable.  I generally don’t read what’s said about me, even in The Hill.  And so part of this job is having a thick skin and understanding that a lot of this stuff is not personal.

That’s not going to be an impediment to — whatever Senator McConnell says about me on the floor of the Senate is not going to be an impediment to us getting a deal done.  The question is going to be whether at any given moment we’re willing to set politics aside, at least briefly, in order to get something done.

I don’t expect politicians not to think about politics.  But every so often there are issues that are urgent, that have to be attended to, and require us to do things we don’t like to do that run contrary to our base, that gets some constituency that helped elect us agitated because they’re looking at it from a narrow prism.  We’re supposed to be stepping back and looking at it from the perspective of what’s good for the country.  And if we are able to remind ourselves of that, then there’s no reason why we shouldn’t be able to get things done.

Look, we’ve been obsessing over the last couple of weeks about raising the debt ceiling and reducing the debt and deficit.  I’ll tell you what the American people are obsessing about right now is that unemployment is still way too high and too many folks’ homes are still underwater, and prices of things that they need, not just that they want, are going up a lot faster than their paychecks are if they’ve got a job.

And so even after we solve this problem we still got a lot of work to do.  Hans was mentioning we should renew the payroll tax for another year, we should make sure unemployment insurance is there for another year —

Q    Sir, I don’t believe that was my point.  (Laughter.)

THE PRESIDENT:  But you were making the point about whether or not that issue could be wrapped into this deal.  My point is that those are a whole other set of issues that we need to be talking about and working on.  I’ve got an infrastructure bank bill that would start putting construction workers back to work rebuilding our roads and bridges.  We should be cooperating on that.

Most of the things that I’ve proposed to help spur on additional job growth are traditionally bipartisan.  I’ve got three trade deals sitting ready to go.  And these are all trade deals that the Republicans told me were their top priorities.  They said this would be one of the best job creators that we could have.  And yet it’s still being held up because some folks don’t want to provide trade adjustment assistance to people who may be displaced as a consequence of trade.  Surely we can come up with a compromise to solve those problems.

So there will be huge differences between now and November 2012 between the parties, and whoever the Republican nominee is, we’re going to have a big, serious debate about what we believe is the right way to guide America forward and to win the future.  And I’m confident that I will win that debate, because I think that we’ve got the better approach.  But in the meantime, surely we can, every once in a while, sit down and actually do something that helps the American people right here and right now.

Q    It’s in the meantime, sir, that I’m curious about.  As you just said, raising the debt ceiling is apparently fairly routine, but it’s brought us to the point of economic Armageddon, as you said.  If you can get past this one, how can you get any agreement with Congress on those big issues you talked about?

THE PRESIDENT:  I am going to keep on working and I’m going to keep on trying.  And what I’m going to do is to hope that, in part, this debate has focused the American people’s attention a little bit more and will subject Congress to scrutiny.  And I think increasingly the American people are going to say to themselves, you know what, if a party or a politician is constantly taking the position “my way or the high way,” constantly being locked into ideologically rigid positions, that we’re going to remember at the polls.

It’s kind of cumulative.  The American people aren’t paying attention to the details of every aspect of this negotiation, but I think what the American people are paying attention to is who seems to be trying to get something done, and who seems to be just posturing and trying to score political points.  And I think it’s going to be in the interests of everybody who wants to continue to serve in this town to make sure that they are on the right side of that impression.

And that’s, by the way, what I said in the meeting two days ago.  I was very blunt.  I said the American people do not want to see a bunch of posturing; they don’t want to hear a bunch of sound bites.  What they want is for us to solve problems, and we all have to remember that.  That’s why we were sent here.

Last question — Scott Horsley.

Q    Thank you, Mr. President.  I wonder if you’ve seen any sign this week of daily meetings that Republicans are being more aligned with that American majority, or if we are in the same place today that we were on Monday.

THE PRESIDENT:  It’s probably better for you to ask them how they’re thinking.  I do think that — and I’ve said this before — Speaker Boehner, in good faith, was trying to see if it was possible to get a big deal done.  He had some problems in his caucus.  My hope is, is that after some reflection, after we walked through all the numbers this week and we looked at all the options, that there may be some movement, some possibility, some interest to still get something more than the bare minimum done.

But we’re running out of time.  That’s the main concern that I have at this point.  We have enough time to do a big deal.  I’ve got reams of paper and printouts and spreadsheets on my desk, and so we know how we can create a package that solves the deficits and debt for a significant period of time.  But in order to do that, we got to get started now.  And that’s why I’m expecting some answers from all the congressional leaders sometime in the next couple of days.

And I have to say this is tough on the Democratic side, too.  Some of the things that I’ve talked about and said I would be willing to see happen, there are some Democrats who think that’s absolutely unacceptable.  And so that’s where I’d have a selling job, Chuck, is trying to sell some of our party that if you are a progressive, you should be concerned about debt and deficit just as much as if you’re a conservative.   And the reason is because if the only thing we’re talking about over the next year, two years, five years, is debt and deficits, then it’s very hard to start talking about how do we make investments in community colleges so that our kids are trained, how do we actually rebuild $2 trillion worth of crumbling infrastructure.

If you care about making investments in our kids and making investments in our infrastructure and making investments in basic research, then you should want our fiscal house in order, so that every time we propose a new initiative somebody doesn’t just throw up their hands and say, “Ah, more big spending, more government.”

It would be very helpful for us to be able to say to the American people, our fiscal house is in order.  And so now the question is what should we be doing to win the future and make ourselves more competitive and create more jobs, and what aspects of what government is doing are a waste and we should eliminate.  And that’s the kind of debate that I’d like to have.

All right?  Thank you, guys.

END
11:39 A.M. EDT

Political Buzz July 15, 2011: Debt Ceiling Showdown: Second Week of White House Debt Talks — Obama Sets Debt Deal Limit T-36

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

President Obama meets with (L-R) House Majority Leader Rep. Eric Cantor (R-VA), House Minority Leader Rep. Nancy Pelosi (D-CA), Speaker of the House Rep. John Boehner (R-OH), and Senate Majority Leader Sen. Harry Reid (D-NV) in the Cabinet Room of the White House, July 11, 2011 in Washington, D.C. (Getty)

  • Timeline: Debt debate: President Barack Obama and top lawmakers will meet again Monday in search of a deal on slashing the U.S. budget deficit and raising the $14.3 trillion debt ceiling before the United States defaults.
    Obama wants to strike a deal well before August 2, when the Treasury Department says it will no longer be able to honor its obligations and issue new bonds without breaching the limit that Congress set on how much the United States can borrow.
    Republican and Democratic lawmakers say any increase must include measures to ensure the country’s debt remains at a sustainable level. The debt-reduction debate is a sharp shift for Washington, which less than a year ago was focused on additional deficit spending to lower the unemployment rate.
    Following is a timeline of the debate…. – Reuters, 7-11-11
  • Factbox: What’s on the table in debt talks: President Barack Obama and congressional leaders resume their White House talks on Monday to see if they have the makings of a deal to trim budget deficits and avert a looming default.
    The Treasury Department has warned it will run out of money to cover the country’s bills if Congress does not raise the $14.3 trillion debt ceiling by August 2.
    Although Democrats and Republicans agree on the need for trillions of dollars in budget savings, they remain sharply divided about how to get there.
    Following is a summary of the debate… – Reuters, 7-11-11
  • Obama on debt ceiling: Is he winning over Americans?: An increasing number of Americans are concerned about the consequences of not raising the debt ceiling, according to a new poll. President Obama has been blunt about the consequences of default…. – CS Monitor, 7-12-11“We might as well do it now — pull off the Band-Aid; eat our peas.” – President Barack Obama“I know you all love to write the soap opera here.” — Eric Cantor (R-Va.), joking about the Republican-Democrat split.“It’s time for tough love. Don’t let them scare you by telling you that the country’s going to fall apart.” — Michele Bachmann (R-Minn.), speaking to a cheering crowd in Iowa over the weekend.“I hope and pray and believe they should not raise the debt ceiling. These historic, dramatic moments where you can draw a line in the sand and force politicians to actually do something bold and courageous are important moments.” – Tim Pawlenty, Former Minnesota governor

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

JULY 12, 2011: WHITE HOUSE MEETINGS CONTINUE

  • Obama says he cannot guarantee Social Security checks will go out on August 3: President Obama on Tuesday said he cannot guarantee that retirees will receive their Social Security checks August 3 if Democrats and Republicans in Washington do not reach an agreement on reducing the deficit in the coming weeks.
    “I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it,” Mr. Obama said in an interview with CBS Evening News anchor Scott Pelley, according to excerpts released by CBS News.
    The Obama administration and many economists have warned of economic catastrophe if the United States does not raise the amount it is legally allowed to borrow by August 2…. – CBS News, 7-12-11
  • Obama, lawmakers regroup to seek U.S. debt deal: President Barack Obama and congressional leaders, struggling to break an impasse over taxes and spending cuts, will regroup on Tuesday to seek common ground for a deal to avoid a looming U.S. debt default.
    Obama and top lawmakers from both political parties will hold their third meeting in as many days at the White House at 3:45 p.m. (1945 GMT) to hammer out elements of legislation to reduce the U.S. deficit and raise the debt ceiling by Aug. 2.
    The two sides remain far apart on the role of revenues in a deficit-fighting plan. The White House wants to end Bush-era tax breaks for the wealthiest Americans and close other corporate tax loopholes, boosting federal coffers even as massive government spending cuts are made…. – Reuters, 7-12-11
  • Obama urges Republicans to follow Reagan example: President Barack Obama urged Republicans to draw inspiration from the hero of fiscal conservatives, Ronald Reagan, who had agreed to revenue increases to cut the US deficit.
    “Ronald Reagan repeatedly took steps that included revenue, in order for him to accomplish some of these larger goals,” Obama told CBS in an interview.
    “And the question is if Ronald Reagan could compromise — why wouldn’t folks who idolize Ronald Reagan be willing to engage in those same kinds of compromises.”… – AFP, 7-13-11
  • The tea party, the debt ceiling and John Boehner’s conundrum: House Speaker John Boehner of Ohio speaks to reporters on Capitol Hill in Washington, Monday, July 11, 2011, as the debt talks continued. (AP Photo/Susan Walsh)When Republicans retook the House in the 2010 midterm elections, there were a handful of smart party strategists who cautioned that managing the majority might be more trouble than anyone thought, due to the scores of tea party-aligned members coming into Congress.
    Six months into the 112th Congress and House Speaker John Boehner (Ohio) is learning that lesson in spades, as the debt ceiling debate rages on with no signs of compromise.
    New polling from the Washington Post and Pew Research Center paints Boehner’s challenge in corralling the tea party element of the Republican conference in stark relief.
    The data suggests that those who identify as Republicans who are supportive of the tea party not only view themselves as far more educated than the average person on the current debt debate, but are also far more worried about the impact if the debt limit is increased.
    More than eight in 10 tea party supporters (81 percent) said they understand “what would happen if the government does not raise the federal debt limit” — far more than the 55 percent of all respondents who said the same thing.
    Three quarters of tea party supporters said that they were more concerned that raising the debt ceiling would “lead to higher government spending and make the national debt bigger,” while just 19 percent said they were more worried that “not raising the debt limit would force the government into default and hurt the nation’s economy.”
    That stands in stark contrast to all Americans in the poll, 47 percent of whom said raising the debt limit was a bigger concern while 42 percent said not raising it was the bigger worry…. – WaPo, 7-12-11

Full Text Debt Ceiling Showdown July 11, 2011: President Obama’s Press Conference on Debt Ceiling Talks with Republican Congressional Leaders

Press Conference by the President

President Obama gestures as he responds to a question at a news conference at the White House July 11.

President Obama gestures as he responds to a question at a news conference at the White House July 11. (Shawn Thew, EPA)

James S. Brady Press Briefing Room

11:15 A.M. EDT

THE PRESIDENT:  Good morning, everybody.  I want to give a quick update on what’s happening with the debt negotiations, provide my perspective, and then I’m going to take a few questions.

As all of you know, I met with congressional leaders yesterday.  We’re going to be meeting again today, and we’re going to meet every single day until we get this thing resolved.
The good news is that all the leaders continue to believe, rightly, that it is not acceptable for us not to raise the debt ceiling and to allow the U.S. government to default.  We cannot threaten the United States’ full faith and credit for the first time in our history.  We still have a lot of work to do, though, to get this problem solved.  And so let me just make a couple of points.

First of all, all of us agree that we should use this opportunity to do something meaningful on debt and deficits.  And the reports that have been out there have been largely accurate that Speaker Boehner and myself had been in a series of conversations about doing the biggest deal possible so that we could actually resolve our debt and our deficit challenge for a long stretch of time.  And I want to say I appreciate Speaker Boehner’s good-faith efforts on that front.

What I emphasized to the broader group of congressional leaders yesterday is now is the time to deal with these issues.  If not now, when?  I’ve been hearing from my Republican friends for quite some time that it is a moral imperative for us to tackle our debt and our deficits in a serious way.  I’ve been hearing from them that this is one of the things that’s creating uncertainty and holding back investment on the part of the business community.  And so what I’ve said to them is, let’s go. And it is possible for us to construct a package that would be balanced, would share sacrifice, would involve both parties taking on their sacred cows, would involved some meaningful changes to Medicare, Social Security, and Medicaid that would preserve the integrity of the programs and keep our sacred trust with our seniors, but make sure those programs were there for not just this generation but for the next generation; that it is possible for us to bring in revenues in a way that does not impede our current recovery, but is fair and balanced.

We have agreed to a series of spending cuts that will make the government leaner, meaner, more effective, more efficient, and give taxpayers a greater bang for their buck.  That includes defense spending.  That includes health spending.  It includes some programs that I like very much, and we — be nice to have, but that we can’t afford right now.

And if you look at this overall package, we could achieve a situation in which our deficits were at a manageable level and our debt levels were stabilized, and the economy as a whole I think would benefit from that.  Moreover, I think it would give the American people enormous confidence that this town can actually do something once in a while; that we can defy the expectations that we’re always thinking in terms of short-term politics and the next election, and every once in a while we break out of that and we do what’s right for the country.

So I continue to push congressional leaders for the largest possible deal.  And there’s going to be resistance.  There is, frankly, resistance on my side to do anything on entitlements.  There is strong resistance on the Republican side to do anything on revenues.  But if each side takes a maximalist position, if each side wants 100 percent of what its ideological predispositions are, then we can’t get anything done.  And I think the American people want to see something done.  They feel a sense of urgency, both about the breakdown in our political process and also about the situation in our economy.

So what I’ve said to the leaders is, bring back to me some ideas that you think can get the necessary number of votes in the House and in the Senate.  I’m happy to consider all options, all alternatives that they’re looking at.  The things that I will not consider are a 30-day or a 60-day or a 90-day or a 180-day temporary stopgap resolution to this problem.  This is the United States of America, and we don’t manage our affairs in three-month increments.  We don’t risk U.S. default on our obligations because we can’t put politics aside.

So I’ve been very clear to them:  We’re going to resolve this, and we’re going to resolve this for a reasonable period of time, and we’re going to resolve it in a serious way.  And my hope is, is that as a consequence of negotiations that take place today, tomorrow, the next day and through next weekend, if necessary, that we’re going to come up with a plan that solves our short-term debt and deficit problems, avoids default, stabilizes the economy, and proves to the American people that we can actually get things done in this country and in this town.

All right, with that I’m going to take some questions, starting with Ben Feller.

Q    Thank you very much, Mr. President.  Two quick topics. Given that you’re running out of time, can you explain what is your plan for where these talks go if Republicans continue to oppose any tax increases, as they’ve adamantly said that they will?  And secondly, on your point about no short-term stopgap measure, if it came down to that and Congress went that route, I know you’re opposed to it but would you veto it?

THE PRESIDENT:  I will not sign a 30-day or a 60-day or a 90-day extension.  That is just not an acceptable approach.  And if we think it’s going to be hard — if we think it’s hard now, imagine how these guys are going to be thinking six months from now in the middle of election season where they’re all up.  It’s not going to get easier.  It’s going to get harder.  So we might as well do it now — pull off the Band-Aid; eat our peas.  (Laughter.)  Now is the time to do it.  If not now, when?  \

We keep on talking about this stuff and we have these high-minded pronouncements about how we’ve got to get control of the deficit and how we owe it to our children and our grandchildren. Well, let’s step up.  Let’s do it.  I’m prepared to do it.  I’m prepared to take on significant heat from my party to get something done.  And I expect the other side should be willing to do the same thing — if they mean what they say that this is important.

And let me just, Ben, comment on this whole issue of tax increases, because there’s been a lot of information floating around there.  I want to be crystal clear — nobody has talked about increasing taxes now.  Nobody has talked about increases –increasing taxes next year.  What we have talked about is that starting in 2013, that we have gotten rid of some of these egregious loopholes that are benefiting corporate jet owners or oil companies at a time where they’re making billions of dollars of profits.  What we have said is as part of a broader package we should have revenues, and the best place to get those revenues are from folks like me who have been extraordinarily fortunate, and that millionaires and billionaires can afford to pay a little bit more — going back to the Bush tax rates.

And what I’ve also said to Republicans is, if you don’t like that formulation, then I’m happy to work with you on tax reform that could potentially lower everybody’s rates and broaden the base, as long as that package was sufficiently progressive so that we weren’t balancing the budget on the backs of middle-class families and working-class families, and we weren’t letting hedge fund managers or authors of best-selling books off the hook.

That is a reasonable proposition.  So when you hear folks saying, well, the President shouldn’t want massive, job-killing tax increases when the economy is this weak — nobody is looking to raise taxes right now.  We’re talking about potentially 2013 and the out-years.  In fact, the only proposition that’s out there about raising taxes next year would be if we don’t renew the payroll tax cut that we passed in December, and I’m in favor of renewing it for next year as well.  But there have been some Republicans who said we may not renew it.

And if we don’t renew that, then the $1,000 that’s been going to a typical American family this year as a consequence of the tax cut that I worked with the Republicans and passed in December — that lapses.  That could weaken the economy.

So I have bent over backwards to work with the Republicans to try to come up with a formulation that doesn’t require them to vote sometime in the next month to increase taxes.  What I’ve said is to identify a revenue package that makes sense, that is commensurate with the sacrifices we’re asking other people to make, and then I’m happy to work with you to figure out how else we might do it.

Q    Do you see any path to a deal if they don’t budge on taxes?

THE PRESIDENT:  I do not see a path to a deal if they don’t budge, period.  I mean, if the basic proposition is “it’s my way or the highway,” then we’re probably not going to get something done because we’ve got divided government.  We’ve got Democrats controlling the Senate; we probably are going to need Democratic votes in the House for any package that could possibly pass.  And so if, in fact, Mitch McConnell and John Boehner are sincere — and I believe they are — that they don’t want to see the U.S. government default, then they’re going to have to compromise just like Democrats are going to have to compromise; just like I have shown myself willing to compromise.

Chip Reid.

Q    Thank you, Mr. President.  You said that everybody in the room is willing to do what they have to do, wants to get something done by August 2nd.  But isn’t the problem the people who aren’t in the room, and in particular Republican presidential candidates and Republican Tea Partiers on the Hill, and the American public?  The latest CBS News poll showed that only 24 percent of Americans said you should raise the debt limit to avoid an economic catastrophe.  There are still 69 percent who oppose raising the debt limit.  So isn’t the problem that you and others have failed to convince the American people that we have a crisis here, and how are you going to change that?

THE PRESIDENT:  Well, let me distinguish between professional politicians and the public at large.  The public is not paying close attention to the ins and outs of how a Treasury option goes.  They shouldn’t.  They’re worrying about their family; they’re worrying about their jobs; they’re worrying about their neighborhood.  They’ve got a lot of other things on their plate.  We’re paid to worry about it.

I think, depending on how you phrase the question, if you said to the American people, is it a good idea for the United States not to pay its bills and potentially create another recession that could throw millions of more people out of work, I feel pretty confident I can get a majority on my side on that one.

And that’s the fact.  If we don’t raise the debt ceiling and we see a crisis of confidence in the markets, and suddenly interest rates are going up significantly, and everybody is paying higher interest rates on their car loans, on their mortgages, on their credit cards, and that’s sucking up a whole bunch of additional money out of the pockets of the American people, I promise you they won’t like that.

Now, I will say that some of the professional politicians know better.  And for them to say that we shouldn’t be raising the debt ceiling is irresponsible.  They know better.

And this is not something that I am making up.  This is not something that Tim Geithner is making up.  We’re not out here trying to use this as a means of doing all these really tough political things.  I’d rather be talking about stuff that everybody welcomes — like new programs or the NFL season getting resolved.  Unfortunately, this is what’s on our plate.  It’s before us right now.  And we’ve got to deal with it.

So what you’re right about, I think, is, is that the leaders in the room here at a certain point have to step up and do the right thing, regardless of the voices in our respective parties that are trying to undermine that effort.

I have a stake in John Boehner successfully persuading his caucus that this is the right thing to do, just like he has a stake in seeing me successfully persuading the Democratic Party that we should take on these problems that we’ve been talking about for too long but haven’t been doing anything about.

Q    Do you think he’ll come back to the $4 trillion deal?

THE PRESIDENT:  I think Speaker Boehner has been very sincere about trying to do something big.  I think he’d like to do something big.  His politics within his caucus are very difficult — you’re right.  And this is part of the problem with a political process where folks are rewarded for saying irresponsible things to win elections or obtain short-term political gain, when we actually are in a position to try to do something hard we haven’t always laid the groundwork for.  And I think that it’s going to take some work on his side, but, look, it’s also going to take some work on our side, in order to get this thing done.

I mean, the vast majority of Democrats on Capitol Hill would prefer not to have to do anything on entitlements; would prefer, frankly, not to have to do anything on some of these debt and deficit problems.  And I’m sympathetic to their concerns, because they’re looking after folks who are already hurting and already vulnerable, and there are a lot of families out there and seniors who are dependant on some of these programs.

And what I’ve tried to explain to them is, number one, if you look at the numbers, then Medicare in particular will run out of money and we will not be able to sustain that program no matter how much taxes go up.  I mean, it’s not an option for us to just sit by and do nothing.  And if you’re a progressive who cares about the integrity of Social Security and Medicare and Medicaid, and believes that it is part of what makes our country great that we look after our seniors and we look after the most vulnerable, then we have an obligation to make sure that we make those changes that are required to make it sustainable over the long term.

And if you’re a progressive that cares about investments in Head Start and student loan programs and medical research and infrastructure, we’re not going to be able to make progress on those areas if we haven’t gotten our fiscal house in order.

So the argument I’m making to my party is, the values we care about — making sure that everybody in this country has a shot at the American Dream and everybody is out there with the opportunity to succeed if they work hard and live a responsible life, and that government has a role to play in providing some of that opportunity through things like student loans and making sure that our roads and highways and airports are functioning, and making sure that we’re investing in research and development for the high-tech jobs of the future — if you care about those things, then you’ve got to be interested in figuring out how do we pay for that in a responsible way.

And so, yeah, we’re going to have a sales job; this is not pleasant.  It is hard to persuade people to do hard stuff that entails trimming benefits and increasing revenues.  But the reason we’ve got a problem right now is people keep on avoiding hard things, and I think now is the time for us to go ahead and take it on.

Rich Wolf.

Q    Thank you, Mr. President.  You keep talking about balance, shared sacrifice, but in the $4 trillion deal that you’re talking about roughly, it seems to be now at about four-to-one spending to taxes; we’re talking about $800 billion in taxes, roughly.  That doesn’t seem very fair to some Democrats.  I’m wondering if you could clarify why we’re at that level.  And also, if you could clarify your Social Security position — would any of the money from Social Security, even from just Chained CPI, go toward the deficit as opposed to back into the trust fund?

THE PRESIDENT:  With respect to Social Security, Social Security is not the source of our deficit problems.  Social Security, if it is part of a package, would be an issue of how do we make sure Social Security extends its life and is strengthened?  So the reason to do Social Security is to strengthen Social Security to make sure that those benefits are there for seniors in the out-years.  And the reason to include that potentially in this package is if you’re going to take a bunch of tough votes, you might as well do it now, as opposed to trying to muster up the political will to get something done further down in the future.

With respect to a balanced package, is the package that we’re talking about exactly what I would want?  No.  I might want more revenues and fewer cuts to programs that benefit middle-class families that are trying to send their kids to college, or benefit all of us because we’re investing more in medical research.

So I make no claims that somehow the position that Speaker Boehner and I discussed reflects 100 percent of what I want.  But that’s the point.  My point is, is that I’m willing to move in their direction in order to get something done.  And that’s what compromise entails.  We have a system of government in which everybody has got to give a little bit.

Now, what I will say is, is that the revenue components that we’ve discussed would be significant and would target folks who can most afford it.  And if we don’t do any revenue — because you may hear the argument that why not just go ahead and do all the cuts and we can debate the revenue issues in the election — right?  You’ll hear that from some Republicans.  The problem is, is that if you don’t do the revenues, then to get the same amount of savings you’ve got to have more cuts, which means that it’s seniors, or it’s poor kids, or it’s medical researchers, or it’s our infrastructure that suffers.

And I do not want, and I will not accept, a deal in which I am asked to do nothing, in fact, I’m able to keep hundreds of thousands of dollars in additional income that I don’t need, while a parent out there who is struggling to figure out how to send their kid to college suddenly finds that they’ve got a couple thousand dollars less in grants or student loans.

That’s what the revenue debate is about.  It’s not because I want to raise revenues for the sake of raising revenues, or I’ve got some grand ambition to create a bigger government.  It’s because if we’re going to actually solve the problem, there are a finite number of ways to do it.  And if you don’t have revenues, it means you are putting more of a burden on the people who can least afford it.  And that’s not fair.  And I think the American people agree with me on that.

Sam Stein.

Q    Thank you, Mr. President.  With unemployment now at 9.2 percent and a large chunk of those lost jobs coming from the private sector, is now a really good time to cut trillions of dollars in spending?  How will we still create jobs?  And then to piggyback on the Social Security question — what do you say to members of your own party who say it doesn’t contribute to the deficit, let’s consider it but not in the context of this deal?

THE PRESIDENT:  Our biggest priority as an administration is getting the economy back on track and putting people back to work.  Now, without relitigating the past, I’m absolutely convinced, and the vast majority of economists are convinced, that the steps we took in the Recovery Act saved millions of people their jobs or created a whole bunch of jobs.

And part of the evidence of that is as you see what happens with the Recovery Act phasing out.  When I came into office and budgets were hemorrhaging at the state level, part of the Recovery Act was giving states help so they wouldn’t have to lay off teachers, police officers, firefighters.  As we’ve seen that federal support for states diminish, you’ve seen the biggest job losses in the public sector — teachers, police officers, firefighters losing their jobs.

So my strong preference would be for us to figure out ways that we can continue to provide help across the board.  But I’m operating within some political constraints here, because whatever I do has to go through the House of Representatives.

What that means then is, is that among the options that are available to us is, for example, the payroll tax cut, which might not be exactly the kind of program that I would design in order to boost employment but does make a difference because it puts money in the pockets of people who are then spending it at businesses, large and small.  That gives them more customers, increases demand, and it gives businesses a greater incentive to hire.  And that would be, for example, a component of this overall package.

Unemployment benefits, again, puts money in the pockets of folks who are out there knocking on doors trying to find a job every day.  Giving them those resources, that puts more money into the economy and that potentially improves it — improves the climate for businesses to want to hire.

So as part of a component of a deal, I think it’s very important for us to look at what are the steps we can take short term in order to put folks back to work.  I am not somebody who believes that just because we solve the deficit and debt problems short term, medium term, or long term, that that automatically solves the unemployment problem.  I think we’re still going to have to do a bunch of stuff — including, for example, trade deals that are before Congress right now that could add tens of thousands of jobs.

Republicans gave me this list the beginning of this year as a priority, something that they thought they could do.  Now I’m ready to do it, and so far we haven’t gotten the kind of movement that I would have expected.

We’ve got the potential to create an infrastructure bank that could put construction workers to work right now, rebuilding our roads and our bridges and our vital infrastructure all across the country.  So those are still areas where I think we can make enormous progress.

I do think that if the country as a whole sees Washington act responsibly, compromises being made, the deficit and debt being dealt with for 10, 15, 20 years, that that will help with businesses feeling more confident about aggressively investing in this country, foreign investors saying America has got its act together and are willing to invest.  And so it can have a positive impact in overall growth and employment.

It’s not the only solution.  We’re still going to have to have a strong jobs agenda.  But it is part of a solution.  I might add it is the primary solution that the Republicans have offered when it comes to jobs.  They keep on going out there and saying, “Mr. President, what are you doing about jobs?”  And when you ask them, well, what would you do?  “We’ve got to get government spending under control and we’ve got to get our deficits under control.”  So I say, okay, let’s go.  Where are they?  I mean, this is what they claim would be the single biggest boost to business certainty and confidence.  So what’s the holdup?

With respect to Social Security, as I indicated earlier, making changes to these programs is so difficult that this may be an opportunity for us to go ahead and do something smart that strengthens Social Security and gives not just this generation but future generations the opportunity to say this thing is going to be in there for the long haul.

Now, that may not be possible and you’re absolutely right that, as I said, Social Security is not the primary driver of our long-term deficits and debt.  On the other hand, we do want to make sure that Social Security is going to be there for the next generations, and if there is a reasonable deal to be had on it, it is one that I’m willing to pursue.

Q    Are there things with respect to Social Security, like raising the retirement age, means testing — are those too big a chunk for —

THE PRESIDENT:  I’m probably not going to get into the details, Sam, right now of negotiations.  I might enjoy negotiating with you, but I don’t know how much juice you’ve got in the Republican caucus.  (Laughter.)  That’s what I figured.

All right, Lesley Clark.

Q    Thank you, Mr. President.

THE PRESIDENT: Thank you.

Q    Have you — you’ve talked with economists, you said that economists have agreed that a deal needs to be made.  Have you worked with new U.S. business leaders at all to lobby Congress to raise the debt ceiling?  And if so, who are you talking to?

THE PRESIDENT: I have spoken extensively to business leaders.  And I’ll be honest with you.  I think that business leaders in the abstract want to see a resolution to this problem. What I’ve found is that they are somewhat hesitant to weigh in on some of these issues even if they’re willing to say something privately to me, partly because they’ve got a whole bunch of business pending before Congress and they don’t want to make anybody mad.

So this is a problem of our politics and our politicians, but it’s not exclusively a problem of our politics and our politicians.  The business community is a lot like everybody else, which is we want to cut everybody else’s stuff and we want to keep our stuff.  We want to cut our taxes, but if you want to raise revenue with somebody else’s taxes, that’s okay.  And that kind of mindset is why we never get the problem solved.

There have been business leaders, like Warren Buffet, who I think have spoken out forcefully on this issue.  I think some of the folks who participated in the Bowles-Simpson Commission made very clear that they would agree to a balanced approach even if it meant for them, individually, that they were seeing slightly higher taxes on their income, given that they’re — I think the average CEO, if I’m not mistaken, saw a 23 percent raise this past year while the average worker saw a zero to one percent raise last year.

So I think that there are a lot of well-meaning business people out there who recognize the need to make something happen. But I think that they’ve been hesitant to be as straightforward as I’d like when it says, this is what a balanced package means. It means that we’ve got some spending cuts; it means that we’ve got some increased revenue; and it means that we’re taking on some of the drivers of our long-term debt and deficits.

Q    And can you say, as the clock ticks down, whether or not the administration is —

THE PRESIDENT: I’m sorry —

Q    Can you say, as the clock ticks down, whether or not the administration is working on any sort of contingency plans if things don’t happen by August?

THE PRESIDENT: We are going to get this done by August 2nd.
George Condon.

Q    Mr. President, to follow on Chip’s question, you said that the Speaker faces tough politics in his caucus.  Do you have complete confidence that he can deliver the votes on anything that he agrees to?  Is he in control of his caucus?

THE PRESIDENT: That’s a question for the Speaker, not a question for me.  My experience with John Boehner has been good. I think he’s a good man who wants to do right by the country.  I think that it’s a — as Chip alluded to, the politics that swept him into the speakership were good for a midterm election; they’re tough for governing.  And part of what the Republican caucus generally needs to recognize is that American democracy works when people listen to each other, we’re willing to give each other the benefit of the doubt, we assume the patriotism and good intentions of the other side, and we’re willing to make some sensible compromises to solve big problems.  And I think that there are members of that caucus who haven’t fully arrived at that realization yet.

Q    So your confidence in him wasn’t shaken by him walking away from the big deal he said he wanted?

THE PRESIDENT:  These things are a tough process.  And, look, in fairness, a big deal would require a lot of work on the part of Harry Reid and Nancy Pelosi and myself to bring Democrats along.  But the point is, is if everybody gets in the boat at the same time, it doesn’t tip over.  I think that was Bob Dole’s famous comment after striking a deal with the President and Mr. Gingrich back in the ‘90s.  And that is always the case when it comes to difficult but important tasks like this.

Last question.  April Ryan.

Q    Mr. President, hi.  I want to revisit the issue of sacrifice.  In 2009, you said that — expect the worst to come; we have not seen the worst yet.  And now with these budget cuts looming, you have minorities, the poor, the elderly, as well as people who are scared of losing jobs fearful.  And also, what say you about Congressman Chaka Fattah’s bill, the Debt Free America Act?  Do you support that bill?  Are you supporting the Republican bill that is similar to his, modeled after Congressman Fattah’s bill?

THE PRESIDENT:  Well, I’m not going to comment on a particular bill right now.  Let me speak to the broader point that you’re asking about, April.

This recession has been hard on everybody, but obviously it’s harder on folks who’ve got less.  And the thing that I am obsessed with, and have been since I came into office, is all those families out there who are doing the right thing every single day, who are looking after their families, who are just struggling to keep up, and just feel like they’re falling behind, no matter how hard they work.

I got a letter this past week from a woman who — her husband had lost his job, had pounded the pavement, finally found a job.  They felt like things were stabilizing for a few months. Six months later he lost his second job.  Now they’re back looking again and trying to figure out how they are going to make ends meet.  And there are just hundreds of thousands of folks out there who really have seen as tough of an economy as we’ve seen in our lifetimes.

Now, we took very aggressive steps when I first came into office to yank the economy out of a potential Great Depression and stabilize it.  And we were largely successful in stabilizing it.  But we stabilized it at a level where unemployment is still too high and the economy is not growing fast enough to make up for all the jobs that were lost before I took office and the few months after I took office.

So this unemployment rate has been really stubborn.  There are a couple of ways that we can solve that.  Number one is to make sure that the overall economy is growing.  And so we have continued to take a series of steps to make sure that there’s money in people’s pockets that they can go out there and spend.  That’s what these payroll tax cuts were about.

We’ve taken a number of steps to make sure that businesses are willing to invest, and that’s what the small business tax cuts and some of the tax breaks for companies that are willing to invest in plants and equipment — and zero capital gains for small businesses — that’s what that was all about, was giving businesses more incentive to invest.

We have worked to make sure that the training programs that are out there for folks who are having to shift from jobs that may not exist anymore so that they can get the training they need for the jobs that do exist, that those are improved and sharpened.

We have put forward a series of proposals to make sure that regulations that may be unnecessary and are hampering some businesses from investing, that we are examining all of those for their cost and their benefits.  And if they are not providing the kind of benefits in terms of the public health, and clean air and clean water, and worker safety that have been promised, then we should get rid of some of those regulations.

So we’ve been looking at the whole menu of steps that can be taken.  We are now in a situation where because the economy has moved slower than we wanted, because of the deficits and debt that result from the recession and the crisis, that taking a approach that costs trillions of dollars is not an option.  We don’t have that kind of money right now.

What we can do is to solve this underlying debt and deficit problem for a long period of time so that then we can get back to having a conversation about, all right, since we now have solved this problem, that’s not — no longer what’s hampering economic growth, that’s not feeding business and uncertainty, everybody feels that the ground is stable under our feet, are there some strategies that we could pursue that would really focus on some targeted job growth — infrastructure being a primary example.

I mean, the infrastructure bank that we’ve proposed is relatively small.  But could we imagine a project where we’re rebuilding roads and bridges and ports and schools and broadband lines and smart grids, and taking all those construction workers and putting them to work right now?  I can imagine a very aggressive program like that that I think the American people would rally around and would be good for the economy not just next year or the year after, but for the next 20 or 30 years.

But we can’t even have that conversation if people feel as if we don’t have our fiscal house in order.  So the idea here is let’s act now.  Let’s get this problem off the table.  And then with some firm footing, with a solid fiscal situation, we will then be in a position to make the kind of investments that I think are going to be necessary to win the future.

So this is not a right or left, conservative-liberal situation.  This is how do we operate in a smart way, understanding that we’ve got some short-term challenges and some long-term challenges.  If we can solve some of those long-term challenges, that frees up some of our energies to be able to deal with some of these short-term ones, as well.

All right?  Thank you very much, everybody.

END 11:54 A.M. EDT

Political Buzz July 11, 2011: Debt Ceiling Showdown: President Obama’s Press Conference & Debt Talks with Congressional Leaders

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.

DEBT CEILING SHOWDOWN: OBAMA VS CONGRESSIONAL LEADERS

Stephen Crowley/The New York Times
  • Timeline: Debt debate: President Barack Obama and top lawmakers will meet again Monday in search of a deal on slashing the U.S. budget deficit and raising the $14.3 trillion debt ceiling before the United States defaults.
    Obama wants to strike a deal well before August 2, when the Treasury Department says it will no longer be able to honor its obligations and issue new bonds without breaching the limit that Congress set on how much the United States can borrow.
    Republican and Democratic lawmakers say any increase must include measures to ensure the country’s debt remains at a sustainable level. The debt-reduction debate is a sharp shift for Washington, which less than a year ago was focused on additional deficit spending to lower the unemployment rate.
    Following is a timeline of the debate…. – Reuters, 7-11-11
  • Factbox: What’s on the table in debt talks: President Barack Obama and congressional leaders resume their White House talks on Monday to see if they have the makings of a deal to trim budget deficits and avert a looming default.
    The Treasury Department has warned it will run out of money to cover the country’s bills if Congress does not raise the $14.3 trillion debt ceiling by August 2.
    Although Democrats and Republicans agree on the need for trillions of dollars in budget savings, they remain sharply divided about how to get there.
    Following is a summary of the debate… – Reuters, 7-11-11
  • Obama on debt ceiling: Is he winning over Americans?: An increasing number of Americans are concerned about the consequences of not raising the debt ceiling, according to a new poll. President Obama has been blunt about the consequences of default…. – CS Monitor, 7-12-11“We might as well do it now — pull off the Band-Aid; eat our peas.” – President Barack Obama“I know you all love to write the soap opera here.” — Eric Cantor (R-Va.), joking about the Republican-Democrat split.“It’s time for tough love. Don’t let them scare you by telling you that the country’s going to fall apart.” — Michele Bachmann (R-Minn.), speaking to a cheering crowd in Iowa over the weekend.

    “I hope and pray and believe they should not raise the debt ceiling. These historic, dramatic moments where you can draw a line in the sand and force politicians to actually do something bold and courageous are important moments.” – Tim Pawlenty, Former Minnesota governor

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

JULY 12, 2011: WHITE HOUSE MEETINGS CONTINUE

  • Obama says he cannot guarantee Social Security checks will go out on August 3: President Obama on Tuesday said he cannot guarantee that retirees will receive their Social Security checks August 3 if Democrats and Republicans in Washington do not reach an agreement on reducing the deficit in the coming weeks.
    “I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it,” Mr. Obama said in an interview with CBS Evening News anchor Scott Pelley, according to excerpts released by CBS News.
    The Obama administration and many economists have warned of economic catastrophe if the United States does not raise the amount it is legally allowed to borrow by August 2…. – CBS News, 7-12-11
  • Obama, lawmakers regroup to seek U.S. debt deal: President Barack Obama and congressional leaders, struggling to break an impasse over taxes and spending cuts, will regroup on Tuesday to seek common ground for a deal to avoid a looming U.S. debt default.
    Obama and top lawmakers from both political parties will hold their third meeting in as many days at the White House at 3:45 p.m. (1945 GMT) to hammer out elements of legislation to reduce the U.S. deficit and raise the debt ceiling by Aug. 2.
    The two sides remain far apart on the role of revenues in a deficit-fighting plan. The White House wants to end Bush-era tax breaks for the wealthiest Americans and close other corporate tax loopholes, boosting federal coffers even as massive government spending cuts are made…. – Reuters, 7-12-11
  • Obama urges Republicans to follow Reagan example: President Barack Obama urged Republicans to draw inspiration from the hero of fiscal conservatives, Ronald Reagan, who had agreed to revenue increases to cut the US deficit.
    “Ronald Reagan repeatedly took steps that included revenue, in order for him to accomplish some of these larger goals,” Obama told CBS in an interview.
    “And the question is if Ronald Reagan could compromise — why wouldn’t folks who idolize Ronald Reagan be willing to engage in those same kinds of compromises.”… – AFP, 7-13-11
  • The tea party, the debt ceiling and John Boehner’s conundrum: House Speaker John Boehner of Ohio speaks to reporters on Capitol Hill in Washington, Monday, July 11, 2011, as the debt talks continued. (AP Photo/Susan Walsh)When Republicans retook the House in the 2010 midterm elections, there were a handful of smart party strategists who cautioned that managing the majority might be more trouble than anyone thought, due to the scores of tea party-aligned members coming into Congress.
    Six months into the 112th Congress and House Speaker John Boehner (Ohio) is learning that lesson in spades, as the debt ceiling debate rages on with no signs of compromise.
    New polling from the Washington Post and Pew Research Center paints Boehner’s challenge in corralling the tea party element of the Republican conference in stark relief.
    The data suggests that those who identify as Republicans who are supportive of the tea party not only view themselves as far more educated than the average person on the current debt debate, but are also far more worried about the impact if the debt limit is increased.
    More than eight in 10 tea party supporters (81 percent) said they understand “what would happen if the government does not raise the federal debt limit” — far more than the 55 percent of all respondents who said the same thing.
    Three quarters of tea party supporters said that they were more concerned that raising the debt ceiling would “lead to higher government spending and make the national debt bigger,” while just 19 percent said they were more worried that “not raising the debt limit would force the government into default and hurt the nation’s economy.”
    That stands in stark contrast to all Americans in the poll, 47 percent of whom said raising the debt limit was a bigger concern while 42 percent said not raising it was the bigger worry…. – WaPo, 7-12-11

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

President Obama gestures as he responds to a question at a news conference at the White House July 11.

President Obama gestures as he responds to a question at a news conference at the White House July 11. (Shawn Thew, EPA)

Obama rules out short-term deal on debt ceiling: President Obama said Monday that he would not consider stopgap measures to temporarily avert the debt-ceiling crisis, saying “that is just not an acceptable approach.”
Obama spoke after Republicans rejected a deficit-reduction framework that would raise taxes and cut entitlements. “I continue to push congressional leaders for the largest possible deal,” Obama said at a White House news conference. He added, “I will not sign” a short-term extension.

“This is the United States of America. We don’t manage our affairs in three-month increments. We don’t risk default on our obligations because we can’t put politics aside.” — Barack Obama

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

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

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

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

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

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

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

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

    WaPo, 7-7-11

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

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

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

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

  • Boehner abandons goal of $4 trillion debt-reduction package: House Speaker John Boehner, Republican of Ohio, abandoned efforts last night to reach a comprehensive debt-reduction deal worth more than $4 trillion in savings, telling President Obama that a midsize package was the only politically possible alternative to avoid a first-ever default on the nation’s mounting national debt.
    Boehner told Obama – who is hosting a key meeting tonight on the debt issue – that their efforts to “go big,’’ as the speaker says, were stymied by the toughest issues: taxes and entitlements.
    Democrats continued to insist on tax changes that would not pass muster in the conservative-dominated House, and Republicans wanted cuts to programs such as Medicare and Social Security that Obama and Senate Democrats would oppose.
    “Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase,” Boehner said…. – Boston Globe, 7-9-11
  • Deficit Talks Scaled Back Over Tax Increases: Citing differences over tax revenues, House Speaker John A. Boehner said on Saturday night that he would pull back from joint efforts with President Obama to reach a sweeping $4 trillion de