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Archive for Tuesday, August 2, 2011

Obama signs debt bill after final Senate vote

August 2, 2011, 11:37 a.m. Updated August 2, 2011, 1:12 p.m.

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— The Senate emphatically passed emergency legislation Tuesday to avoid a first-ever government default, rushing the legislation to President Barack Obama for his signature just hours before the deadline. The vote was 74-26.

Obama signed the bill little more than an hour later.

Tuesday’s vote capped an extraordinarily difficult Washington battle pitting tea party Republican forces in the House against Obama and Democrats controlling the Senate. The resulting compromise paired an essential increase in the government’s borrowing cap with promises of more than $2 trillion of budget cuts over the next decade.

“It’s an important first step to ensuring that as a nation we live within our means,” Obama said after the vote. “This is, however, just the first step. This compromise requires that both parties work together on a larger plan to cut the deficit.”

Much of the measure, which the House passed Monday night, was negotiated on terms set by House Speaker John Boehner, including a demand that any increase in the nation’s borrowing cap be matched by spending cuts. But the legislation also meets demands made by Obama, including debt-limit increases large enough to keep the government funded into 2013 and curbs on growth of the Pentagon budget.

“We’ve had to settle for less than we wanted, but what we’ve achieved is in no way insignificant,” said Senate GOP leader Mitch McConnell of Kentucky. “But I think it was the view of those in my party that we’d try to get as much spending cuts as we could from a government we didn’t control. And that’s what we’ve done with this bipartisan agreement.”

Many supporters of the legislation lamented what they saw as flaws and the intense partisanship from which it was forged. In the end, it was a lowest-common-denominators approach that puts off tough decisions on tax increases and cuts to entitlement programs like Medicare.

“What troubles me about it is that the bipartisan compromise also represents a kind of bipartisan agreement by each party to yield to the other party’s most politically and ideologically sensitive priority,” said Joseph Lieberman, I-Conn. “In the case of Democrats, it’s to protect entitlement spending. ... In the case of Republicans, it’s to not raise taxes.”

The measure would provide an immediate $400 billion increase in the $14.3 trillion U.S. borrowing cap, with $500 billion more assured this fall. That $900 billion would be matched by cuts to agency budgets over the next 10 years.

The Senate vote was never in doubt after Majority Leader Harry Reid, D-Nev., and McConnell signed on. But like Monday’s House vote, defections came from liberal Democrats unhappy that Obama gave too much ground in the talks, as well as from conservative Republicans who said the measure would barely dent deficits that require the government to borrow more than 40 cents of every dollar it spends.

“This is a time for us to make tough choices as compared to kick the can down the road one more time,” said freshman GOP Sen. Jerry Moran of Kansas.

The measure sets up a fall drama that promises to again test the ability of Obama and Republicans to work cooperatively. It establishes a special bipartisan committee to draft legislation to find up to $1.5 trillion more in deficit cuts for a vote later this year. They’re likely to come from such programs as federal retirement benefits, farm subsidies, Medicare and Medicaid. The savings would be matched by a further increase in the borrowing cap.

There’s no guarantee the committee, to be evenly split between the warring parties, will agree on such legislation. But there are powerful incentives to do so because more budget gridlock would trigger a crippling round of automatic cuts across much of the budget, including Pentagon coffers.

And questions linger about the effect the grueling political free-for-all will have on the U.S. credit rating.

Treasury Secretary Timothy Geithner told ABC News that he didn’t know whether the debt-limit fight would cause America’s AAA credit rating to be downgraded. “It’s not my judgment to make,” he said. Geithner also said he fears world confidence in the United States was damaged by “this spectacle.”

Enactment of the measure provides welcome closure for Obama, who has seen his poll numbers sag during the debt-limit battle.

GOP presidential candidates such as Mitt Romney and Michele Bachmann issued statements opposing the legislation.

“As with any compromise, the outcome is far from satisfying,” Obama conceded in a video his re-election campaign sent to millions of Democrats.

In a tweet, the president was more positive: “The debt agreement makes a significant down payment to reduce the deficit — finding savings in both defense and domestic spending.”

Comments

BornAgainAmerican 2 years, 8 months ago

Debt Down Grade Update heard on the radio this morning. Communist Chian has down graded US credit from A+ to A. S&P continues to view US credit in negative terms. Here we go folks.

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Flap Doodle 2 years, 8 months ago

"Remember a few weeks ago when President Obama reportedly said to House Majority Leader Eric Cantor: "Eric, don't call my bluff"? Lots of commentators said that this was a "tell"--that by referring to "my bluff," Obama was admitting he was bluffing. Actually, his play was even worse than that. A bluff is a pretense. The bluffer knows he has a weak hand but bets as if he has a strong one in order to induce his opponents to fold. Obama had a weak hand but thought he had a strong one. His next words to Cantor, according to Politico, were a vow to "take his case 'to the American people.' " He actually believed--for all we know, he still believes--all that World's Greatest Orator nonsense...." http://online.wsj.com/article/SB10001424053111903520204576482083738819032.html?mod=WSJ_Opinion_BelowLEFTSecond

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BornAgainAmerican 2 years, 8 months ago

It seems like every time the Looney Left attacks the T-Party, they get stronger and stronger. Hasn't been that long ago the Left were calling them violent, knuckle dragging, racists. That little stunt got a bunch of T-Partiers elected to Congress in 2010. Now they are attempting to label them as terrorists. 2012 may see the T-Party dominating both the Senate and the House. And dare I say it?...the Presidency.

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BornAgainAmerican 2 years, 8 months ago

DOW down 265 today to celebrate the resolution of the debt ceiling impasse. Apparently, I am not the only one who thinks US credit will be down graded. I've been telling you Looney Libs, it's more about the debt than raising the debt ceiling. Ya'll shoulda' listened to those T-Party Terrorists. Funny how Libs can't call real terrorists by name, but every one of them are calling the T-Party terrorists. Can't you be a little more creative?

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plynth 2 years, 8 months ago

I find it to be particularly entertaining when Harry Reid says we need not let ideology stand in our way. Really? Are you kidding Senator Reid. Really?

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plynth 2 years, 8 months ago

If you have any left, better start a stash the cash plan. Pretty this will not be henceforth.

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Fossick 2 years, 8 months ago

"And questions linger about the effect the grueling political free-for-all will have on the U.S. credit rating."

The free-for-all has no effect and never did. The problem with the credit rating is not the debt ceiling, but the deficit. Moody's said that, "The chances of a significant improvement in the long-term credit profile of the government coming from deficit reductions of the magnitude proposed in either plan are not high." http://thehill.com/blogs/on-the-money/801-economy/174447-moodys-neither-plan-protects-the-nations-aaa-rating

In other words, the US will be downgraded because it spends too much money, a fact unchanged by this agreement. All the stomping and screaming was just theater, not finance.

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Carol Bowen 2 years, 8 months ago

In McConnell's speech, he talked about the power related to serving on the committee. In Pelosi's speech, she referred to getting back to work on jobs, housing, ...

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kthxbi 2 years, 8 months ago

OR: "...If the Democrats suck so bad at political combat, then how come they continue to be rewarded with such massive quantities of campaign contributions? " "It strains the imagination to think that the country's smartest businessmen keep paying top dollar for such lousy performance. Is it possible that by "surrendering" at the 11th hour and signing off on a deal that presages deep cuts in spending for the middle class, but avoids tax increases for the rich, Obama is doing exactly what was expected of him?"

http://www.rollingstone.com/politics/blogs/taibblog/debt-ceiling-deal-the-democrats-take-a-dive-20110801

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Keith 2 years, 8 months ago

"What do you call a leader who can't lead --"

John Boehner

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Flap Doodle 2 years, 8 months ago

“…And that is why Obama is in such terrible condition. He has had two huge dust-ups with the Republicans since the 2010 election, and in both cases, he gave in -- first on extending the Bush tax cuts, and now on the deal to avert a debt-ceiling debacle. What do you call a leader who can't lead -- who has lost the ability to turn the public discussion and turn the conversation in the direction he wants and needs it to go? You call him a loser. "This may bring my presidency down," Obama reportedly told Cantor in their testy exchange, "but I will not yield on this." He yielded on this. And it may bring his presidency down.” Read more: http://www.nypost.com/p/news/national/it_the_day_the_emperor_officially_mwR1iZyJRMqnrIbhaoGt7I#ixzz1TtsnjCcV

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Clara Westphal 2 years, 8 months ago

How about helping Americans. The foreign aid we keep giving to the countries who are in better shape than we are. is one spending cut they can make..

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rockchalk1977 2 years, 8 months ago

And the DJIA drops 150+ points now below 12K. Good job guys!

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autie 2 years, 8 months ago

I think that the whole bunch should be ashamed of themselves for their behavior. I think that they best get to increasing (eliminating those cuts) taxes and increase some revenue...that bs about creating business by cutting taxes to create more revenue is nothing but smoke and mirrors...and a down right bad lie.

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grammaddy 2 years, 8 months ago

Now can Congress get back to creating some jobs. Isn't that what the retardicans campaigned on? I mean besides taking Obama down.

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Paul R Getto 2 years, 8 months ago

"The measure sets up a fall drama that promises to again test the ability of Obama and Republicans to work cooperatively." === This is where it will get interesting. It's gonna be fascinating to see a) who gets picked from each party for the committee and b) what they recommend.

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