Archive for Friday, July 8, 2011

Obama: Still differences on debt, new talks Sunday

July 8, 2011


— Under an urgent deadline, President Barack Obama and congressional negotiators set their sights on the nation’s tax system and cherished benefit programs Thursday in hopes of striking a budget deal to raise the nation’s debt ceiling. Obama said the two sides were still far apart and called everyone back to the White House on Sunday.

The president met with the eight top Republican and Democratic congressional leaders for an hour and a half Thursday, hoping to bridge ideas held by the two sides — each considered untenable by the other. On Capitol Hill, Democrats appeared especially rattled that the discussions included proposals to cut spending for Social Security as well as Medicare and Medicaid.

High-level talks, after dragging on for weeks, have entered a suspenseful endgame. The shape of an agreement is still in doubt as the nation moves ever closer to an Aug. 2 deadline to raise the government’s debt ceiling.

Obama said Democrats and Republicans should be prepared to show their bottom-line demands when they return to the bargaining table for the rare Sunday session.

The negotiating stakes are high. Without a deal on deficit reduction, Republican leaders say they don’t have enough GOP votes to increase the nation’s borrowing authority, raising the danger of the first ever U.S. default on its debts when the current $14.3 trillion debt ceiling is tapped out.

“Everybody acknowledged that we have to get this done before the hard deadline of Aug. 2 to make sure that America does not default for the first time on its obligations,” Obama said. “And everybody acknowledged that there’s going to be pain involved politically on all sides.”

That leaves little time to agree on 10-year deficit reductions of $2 trillion to $4 trillion.

The major clash centers on how to reduce spending on major entitlement programs such as Medicare, Medicaid and Social Security, all prized by Democrats, and on tax changes that would close loopholes and end certain corporate breaks. Republicans insist that any tax changes be used to lower rates on corporations and individuals; Obama wants them also to generate more tax revenue.

Increasing the debt ceiling through the end of 2012 — a date favored by the White House — would require authorizing about $2.4 trillion in additional borrowing. House Speaker John Boehner has insisted on a 10-year deficit reduction figure that, at a minimum, matches the amount of additional borrowing. One aide to a lawmaker in Thursday’s meeting said Obama made it clear he wouldn’t sign a budget and debt agreement that didn’t extend the debt ceiling until after the November 2012 presidential election.

In the meeting, Obama told the leaders that they faced three options — a small deficit reduction plan, a medium plan that would reduce deficits by $2 trillion over 10 years or a big agreement that would shoot for up to $4 trillion in deficit reductions over the next decade. Obama indicated he preferred the largest number.


Liberty_One 6 years, 10 months ago

I guarantee that they will raise the debt ceiling before the deadline. Not raising the debt ceiling would make it more difficult for the US to borrow in the future (a very good thing) and the GOP wants to be able to borrow lots of money if they regain power. They will continue to just kick the can down the street for another year and a half and hope to get some concessions from the Democrats in the meantime.

just_another_bozo_on_this_bus 6 years, 10 months ago

I don't really disagree with much in your post, but there are Republicans who really believe that not paying the debt will administer "good medicine," rather than pull out a major means of support for the house of cards that is the world economy.

Richard Heckler 6 years, 10 months ago

Republicans love big spending. They have been doing it for 31 years.

The debt limit will be raised. The republicans have always done it in the past.

It depends which party is in office does the matter come up. It's not that big of a deal.

Why? Because so so so many very smart rich people and countries have invested in america. No one not even repubs want to jeopardize this jewel.

Not only that:

lots of business owners would go under

millions upon millions more would lose jobs

millions more of retirement plans would go up in smoke

millions more would be without medical insurance.

Richard Heckler 6 years, 10 months ago

What's missing from this national deficit debate?

Removing the large tax dollar subsidies to very wealthy USA corporations across the board aka corporate welfare!

If all city and state governments plus the federal government would cut corporate welfare and invest this money in IMPROVED Medicare Single Payer Insurance for ALL :

  1. many of us would be saving thousands of dollars annually

  2. big business and small business could operate for less

  3. all governments and school districts could cut operating expenses substantially

  4. employed blue and white collar workers would be healthier thus more productive

  5. all humans would have necessary healthcare 24/7

  6. in general OUR cost of living would decrease across the board

  7. New industry,small business and jobs would develop

Thus our tax dollars would be invested in our local communities providing a jump start to economic growth that has been squandered as one result of corp welfare.

With corporations routinely defaulting on their pension promises, more and more workers must rely on their individual wealth to make up the difference. The stock market collapse at the turn of the millennium wiped out much of the financial wealth of middle class Americans, and the collapse of the housing bubble has wiped out much of their remaining wealth.

Making any cuts to Social Security now, either by raising the retirement age or cutting benefits, would have a huge impact on their remaining retirement income and are not necessary to “save the system.

handley 6 years, 10 months ago

Why wasn't wall street and the big banks held accountable for the melt down of this country and most of the world.

Ron Holzwarth 6 years, 10 months ago

"Why wasn't wall street and the big banks held accountable for the melt down of this country and most of the world."

Because white collar crimes in the USA are almost never prosecuted.

Mug people in a dark alley a few times, steal a few wallets with maybe $200 in them, and you will go to jail if you are caught.

But if you steal $100 million on Wall Street, well, hardly anyone has ever gone to jail for that. Bernie Madoff was a notable exception.

I personally know someone that has committed and is still committing white collar crimes, and so far he's gotten away with hundreds of thousands of dollars. I will faint and fall to the floor if he is ever prosecuted for it.

handley 6 years, 10 months ago

Why wasn't wall street and the big banks held accountable for the melt down of this country and most of the world.

Mixolydian 6 years, 10 months ago

If America defaults without a debt limit increase it will be because it's what Obama wills. If the deal falls through and there's no increase, Obama will have the option to continue making our interest and debt payments, but must cut the budget elsewhere to make up for it.

What's happening now is the effort to take that choice away from Obama and make the cuts ahead of time by consensus now instead of fiat later.

Mixolydian 6 years, 10 months ago

Americans spoke loud and clear in 2010, and will again in 2012, that they're not willing to add more debt AND they want the deficit reduced.

It's been a disasterous last 12 years and, with any luck, we might actually get some adults in leadership in Washngton next time around.

The fiscal crisis isn't a democrat or republican problem it's an American problem that has to be addressed by all. I'm all for cuts everywhere, with the savings applied directly to the debt. I'm for rising the upper limit tax bracket back to it's level of the 90's, as long as every dime of that revenue is applied directly to the debt. I'm all for limiting tax deductions (so called loopholes) if every penny of that revenue is applied to the debt.

Everything, military, every entitlement and every possible tax revenue stream has to be on the table. Every budget saving and tax revenue must be applied to the debt.

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