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Archive for Monday, July 25, 2011

With debt talks at standstill, GOP, Dems ready plan B

July 25, 2011

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With bipartisan talks stalled, House Republicans and Senate Democrats readied rival debt-limit emergency fallback plans in hopes of reassuring world financial markets today the U.S. government will avoid an unprecedented default in barely a week.

House Speaker John Boehner summoned rank-and-file conservative lawmakers in a Sunday-afternoon conference call to be ready for compromise that is “going to require some of you to make some sacrifices.”

He said the new legislation, expected to be unveiled as early as this morning, would cut federal spending, raise the government’s borrowing authority and be able to clear both houses of Congress, according to one official familiar with his remarks on the call.

Officials said that plan was likely to provide for an immediate increase in the debt limit of $1 trillion, while making somewhat larger cuts in federal spending. Additional spending reductions and greater borrowing authority would depend on future action by Congress — a two-step process that Obama has ruled out.

Across the Capitol, Senate Democratic leader Harry Reid worked on an alternative to cut spending by $2.7 trillion and increase the debt limit by $2.4 trillion — enough to satisfy Obama’s demand that the current crisis not recur before the 2012 elections.

Reid said the plan “meets Republicans’ two main criteria” — spending cuts greater in size than the increase in borrowing authority and no new revenue.

The events unfolded in a crisis atmosphere — in a sweltering city swarming with summertime tourists — a little more than a week before an Aug. 2 deadline for action by Congress to raise the government’s $14.3 trillion debt limit.

Without action by that date, the Treasury will be unable to pay all its bills, possibly triggering a default that could have severe consequences for the U.S. economy and the world’s, too.

Officials — and many stockholders — were holding their breath to see how the uncertain situation would affect financial markets in the U.S. and around the world as they opened after the weekend of crisis negotiations. Early results from Asian markets showed no major swings.

Obama spoke with Boehner by phone during the day, then met with Reid and House Democratic leader Nancy Pelosi at the White House.

At the same time, several officials said leadership aides spent Sunday trying to produce a compromise that could quickly clear both houses.

One official, speaking on condition of anonymity, portrayed the Democrats’ White House meeting as an unsuccessful attempt to persuade Obama to accept a two-step he has said he won’t agree to.

There were numerous suggestions of progress — both Boehner and Reid now support plans without immediate increases in government revenue — but no announced compromise.

Similarly, the precise elements of the rival fallback plans were sketchy.

Boehner’s revised measure would fall far short of a House-passed bill that was rejected in the Senate late last week.

It had called for raising the debt limit on condition of $6 trillion in spending cuts and congressional approval of a constitutional balanced budget amendment for state ratification.

Reid’s office declined to provide any details of his alternative, except to say it would cut $2.7 trillion in spending over a decade without any tax increases.

Any sum that large would require either cuts to benefit programs that aides said Reid preferred to leave untouched, or savings from the Pentagon, possibly by assuming the end of the wars in Iraq and Afghanistan.

It appeared the White House was largely consigned to a spectator’s role.

Asked what the administration’s plan was to avoid default, Treasury Secretary Timothy Geithner said, “Our plan is to get Congress to raise the debt ceiling on time.”

The state of play veered between bipartisanship and brinkmanship on an issue of immense economic consequences.

Despite hours of compromise talks in the Capitol, lawmakers’ aides had so far been unable to agree on a two-step plan that would satisfy Obama’s demand for a large enough increase in the debt limit to tide the Treasury over until after the 2012 elections.

White House Chief of Staff Bill Daley said anything short of that would be a gimmick and prompt the world to say: “These people just can’t get their act together.”

Interviewed on Fox, Boehner said, “I would prefer to have a bipartisan approach to solve this problem. If that is not possible, I and my Republican colleagues in the House are prepared to move on our own.”

White House and congressional leaders talked past each other on the Sunday TV shows as negotiations unfolded in secrecy.

“There will be a two-stage process. It’s just not physically possible to do all of this in one step,” Boehner said. “I know the president is worried about his next election. But, my God, shouldn’t he be worried about the country?”

With an eye on the financial markets, Geithner insisted anew the United States would not default.

“It’s just unthinkable,” Geithner said. “We never do that. It’s not going to happen.”

Comments

Richard Heckler 2 years, 8 months ago

The repub plan by Ryan would increase the debt by $6 trillion. Repubs were quite excited over that plan.

People's Budget = $4 trillion reduction

This is the only fiscally responsible budget as of yet :

* Creates good-paying jobs
* Fully maintains our social safety net
* Invests in education
* Ends our costly wars
* Closes the tax loopholes that have made offshoring jobs profitable
* Ends oil and gas subsidies that pollute our country at taxpayer expense
* Creates a national infrastructure investment bank to help us make intelligent investments for the future

What the Peoples Budget does very specifically:

http://cpc.grijalva.house.gov/index.cfm?sectionid=70&sectiontree=5,70

http://www.npr.org/2011/04/15/135435883/the-nation-obama-should-fight-for-peoples-budget

http://www.democracynow.org/2011/4/14/while_obama_touts_compromise_with_gop

http://www.thenation.com/blog/159939/fighting-peoples-budget

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bobberboy 2 years, 8 months ago

just close the tax loopholes - deal done !!

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Jimo 2 years, 8 months ago

Within minutes of Boehner announcing his "Cut, Gut, and Smut II" plan (basically the same thing as was defeated last week - cut 3/4th of a million jobs, gut the government, and place the burden on the middle class while leaving the GOP billionaire darlings to get off scot-free), Tea Party extremists denounced Boehner's proposal listing their primary objections:

  1. Obama would remain as President,

  2. Obama is allowed to remain black.

Republican figures sympathetic to the Tea Party commented off the record, "The only way to get these clowns to vote 'yes' on anything at this point would be to include a resolution praising the recent triumph of the Norwegian Tea Party."

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Richard Payton 2 years, 8 months ago

If we lose big, the question I would like to know is the people receiving social security or the military not getting paid? Which group does Tim G. cut first.

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bobberboy 2 years, 8 months ago

All they have to do is close the tax loopholes on big corporations and rich people. Why is that so hard ?

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rockchalk1977 2 years, 8 months ago

Bottom line... S&P, Moody's and Fitch have suggested that deficit-reduction measures of some $4 trillion over 10 years could allow the U.S. to retain its current AAA rating. Otherwise we all lose big.

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Richard Heckler 2 years, 8 months ago

Last and probably more importantly for the moment at least ...

Congress should be fighting for:

People's Budget = $4 trillion reduction

This is the only budget that does everything this country needs:

* Creates good-paying jobs
* Fully maintains our social safety net
* Invests in education
* Ends our costly wars
* Closes the tax loopholes that have made offshoring jobs profitable
* Ends oil and gas subsidies that pollute our country at taxpayer expense
* Creates a national infrastructure investment bank to help us make intelligent investments for the future

What the Peoples Budget does very specifically:

http://cpc.grijalva.house.gov/index.cfm?sectionid=70&sectiontree=5,70

http://www.npr.org/2011/04/15/135435883/the-nation-obama-should-fight-for-peoples-budget

http://www.democracynow.org/2011/4/14/while_obama_touts_compromise_with_gop

http://www.thenation.com/blog/159939/fighting-peoples-budget

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Richard Heckler 2 years, 8 months ago

How can anyone trust republicans after Iran-Contra Secret Weapons Deal and Nixons Ilegal Spying Crime Spree aka Watergate?

Not to mention:

  1. TABOR is Coming by Grover Norquist and Koch Bros. http://www.dollarsandsense.org/archives/2005/0705rebne.html

  2. The Reagan/Bush Savings and Loan Heist(Cost taxpayers $1.4 trillion) http://rationalrevolution0.tripod.com/war/bush_family_and_the_s.htm

  3. Wall Street Bank Trillion $$$$ Fraud on Consumers under Bush/Cheney http://www.dollarsandsense.org/archives/2009/0709macewan.html

  4. Bush and Henry Paulson blew the $700 billion of bail out money? http://www.democracynow.org/2009/9/10/good_billions_after_bad_one_year

  5. Still A Bad Idea – Bush Tax Cuts - The ENTITLEMENT program for the wealthy at the expense of the middle class http://www.dollarsandsense.org/archives/2001/0301miller.html

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Richard Heckler 2 years, 8 months ago

Congress should be fighting for:

  1. eliminating the $4,000 automatic raise going to congress annually

  2. allowing members of congress to pay for all of their medical insurance @ 20K per year

  3. no more special interest funding of any elections

  4. term limits = no more than 4 years

  5. Providing all disabled veterans with 100% coverage by way of Medicare no matter what = the best care on earth for veterans

  6. Hands Off Medicare AND Social Security

Hands Off Medicare! Healthcare-NOW! is fighting back! The deficit commission is meeting behind closed doors regularly to balance the nation's budget on the backs of working people looking to the programs that keep us from financial devastation – social security and Medicare.

We say cuts to these important programs are "OFF THE TABLE." http://www.healthcare-now.org/campaigns/single-payer-rally/

More about Social security

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Shane Garrett 2 years, 8 months ago

I would start by cutting Foreign Aid. Then the defense budget. Perhaps then we could move away from the military industrial complex that Eisenhower warned us against.

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grammaddy 2 years, 8 months ago

Boner has his nerve. Invoke the 14th and just let the Bush tax cuts expire. Show them how hardball is really played. Then you don't have to upset your base by messing with Medicaid, Medicare or SS. Listen to Clinton! He balanced the budget and left a surplus that would have paid down the debt by now. All the while dealing with Starr and the impeachment. . Thanks for screwing that up with your unfunded wars Shrub.

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