The fate of raising the $14.3 debt ceiling will be decided behind closed doors now as the Democratic and Republican leadership engage in a final attempt to reach a deal that will keep the U.S. from defaulting on its loans for the first time in its history.
However, with a little more than two days until the default deadline, there was plenty of evidence of political gamesmanship in play, particularly between the GOP and Democratic leaders of the Senate.
GOP House Speaker John Boehner and Senate GOP leader Mitch McConnell reopened the negotiating channels with President Obama in the past 24 hours, ending a stalemate created when Boehner walked away from the table.
McConnell spoke to Obama shortly before the President summoned the House and Senate Democratic leaders to the White House this afternoon.
"We are now fully engaged, the Speaker and I, with the one person in America out of 307 million people who can sign a bill into law," McConnell said. "I'm confident and optimistic that we're going to get an agreement in the very near future and resolve this crisis in the best interest of the American people."
Senate Democratic leader Harry Reid accused McConnell of grandstanding by saying both sides were close to agreement, saying they were no closer to a deal after meeting along with House Democratic leader Nancy Pelosi at the White House with Obama.
"Republican leaders still refuse to negotiate in good faith," Reid said. "The process has not been moved forward during this day."
In the only action today in the public eye, the GOP-controlled House voted 246 to 173 to reject a plan by Reid that would cut the deficit by more than $2.2 trillion over 10 years and raise the debt limit automatically in three stages, but without further votes in Congress.
There still may be a Senate vote on the Reid measure at 1 a.m. tomorrow just to get it into the record as a negotiating point.
The Republicans, led by its powerful extremist Tea Party wing, passed a bill in the House yesterday that would require Congress hold another debt ceiling vote over the Christmas holidays. The Senate rejected the measure.
Democrats charge it is a purely political move meant to embarrass President Obama and boost GOP presidential candidates ahead of the 2012 elections.
Obama and the Democrats call that idea, along with a nearly impossible provision requiring passage of a balanced-budget amendment to the constitution, a non-starter.
Pelosi accused Boehner of selling out a $4 trillion grand bargain offered by Obama by abandoning negotiations to pander to the obstructionist Tea Party Republicans.
"He chose to go to the dark side," Pelosi said to boos from the GOP on the House floor, which only prompted her to repeat the line. "He chose to go to the dark side."
Showing posts with label defaullt. Show all posts
Showing posts with label defaullt. Show all posts
Saturday, July 30, 2011
Thursday, July 28, 2011
House Debt Vote a High Stakes Tally for Boehner
Updated at 11:45 p.m. edt
Speaker John Boehner failed to whip up enough votes tonight to pass his debt-reduction legislation, forcing the GOP boss to postpone a vote rather than see his measure go down in flames.
It was a blow to the lawmaker's reign over a House divided between mainstream Republicans and the slash and burn Tea Party faction that arguably controls the direction of the GOP at this point.
Boehner will assemble every GOP House member tomorrow morning to try to get the debt ceiling legislation back on track.
Word of a delay first came at 5:30 p.m. Washington time, some 45 minutes ahead of the scheduled House vote. A few hours later any hopes of a vote fell apart when Boehner's arm-twisting tactics behind closed doors failed to woo enough support for his measure.
Boehner was tweaking the measure late this evening, hoping that by slashing millions in Pell Grants that help poor and middle class Americans pay for college they could buy off the Tea Party.
The White House called the GOP "dysfunctional" because they refuse to compromise, labeling the delay in the vote "a pointless partisan exercise" because the bill will die in the Senate.
end update
---[
Speaker John Boehner implored Tea Party Republicans today to back his debt-reduction legislation, ignoring Democrats' promise to put a stake in the heart of the measure if it makes it out of the House.
"After today, the House will have sent to the Senate not one, but two different bills that will rein in spending, increase the debt ceiling and bring an end to this crisis," Boehner said early this afternoon. "When the House takes action today, the United States Senate will have no more excuses for inaction."
The Speaker is applying pressure while he is under pressure. Throughout the debt wrangling, the Ohio lawmaker has had to negotiate with his own party's members as much, if not more, as he has had to parlay with Democrats. This vote is emerging as one of the biggest tests of Boehner's ability to hold his caucus together and pass legislation.
"Listen, for the sake of jobs, for the sake of our country, I'm asking the representatives in the House in a bipartisan way and asking my colleagues in the Senate, let's pass this bill and end this crisis," Boehner pleaded.
Boehner's debt legislation needs 216 votes to pass in the House.
Going down to the wire, the Speaker got a boost overnight from the Congressional Budget Office, which determined the Speaker's retooled legislation would reduce spending by $917 billion over 10 years, crossing the $900 billion needed to lift debt ceiling. CBO a day earlier said Boehner's plan would not cover the governments debt payments (CBO also said Senate Democratic plan fell short).
Wall Street, late to the fight, but now fully engaged, also stepped up its lobbying for a deal. More than a dozen leading American financiers also wrote to President Obama and the Congress, begging them to settle the debt deal ahead of Tuesday's deadline. They fear a defeault -- the first-ever in U.S. history -- would be a catastrophe for Wall Street and Main Street.
"A default on our nation’s obligations, or a downgrade of America’s credit rating, would be a tremendous blow to business and investor confidence -- raising interest rates for everyone who borrows, undermining the value of the dollar, and roiling stock and bond markets -- and, therefore, dramatically worsening our nation’s already difficult economic circumstances," the bankers wrote.
Boehner knows his bill is doomed no matter what happens with his House vote this evening. The Senate Democrats are going to kill it and Obama promised to veto it. Obama is adamant that the debt resolution not be a short-term incremental fix. The Boehner measure would force another debt showdown over the holidays at the end of this year.
"Republicans cannot get the short-term Band-Aid they will vote on in the House today," said Senate Democratic leader Harry Reid of Nevada. "It will not get one Democratic vote in the Senate. All 53 members of the Senate Democratic Caucus wrote to the Speaker last night to tell him they will not vote for it."
Ultimately, in the hours immediately after tonight's vote lawmakers from the House and Senate will have to decide what they can pass, and they will be forced to make a deal, or potentially send the U.S. economy into an unknown abyss.
Speaker John Boehner failed to whip up enough votes tonight to pass his debt-reduction legislation, forcing the GOP boss to postpone a vote rather than see his measure go down in flames.
It was a blow to the lawmaker's reign over a House divided between mainstream Republicans and the slash and burn Tea Party faction that arguably controls the direction of the GOP at this point.
Boehner will assemble every GOP House member tomorrow morning to try to get the debt ceiling legislation back on track.
Word of a delay first came at 5:30 p.m. Washington time, some 45 minutes ahead of the scheduled House vote. A few hours later any hopes of a vote fell apart when Boehner's arm-twisting tactics behind closed doors failed to woo enough support for his measure.
Boehner was tweaking the measure late this evening, hoping that by slashing millions in Pell Grants that help poor and middle class Americans pay for college they could buy off the Tea Party.
The White House called the GOP "dysfunctional" because they refuse to compromise, labeling the delay in the vote "a pointless partisan exercise" because the bill will die in the Senate.
end update
---[
Speaker John Boehner implored Tea Party Republicans today to back his debt-reduction legislation, ignoring Democrats' promise to put a stake in the heart of the measure if it makes it out of the House.
"After today, the House will have sent to the Senate not one, but two different bills that will rein in spending, increase the debt ceiling and bring an end to this crisis," Boehner said early this afternoon. "When the House takes action today, the United States Senate will have no more excuses for inaction."
The Speaker is applying pressure while he is under pressure. Throughout the debt wrangling, the Ohio lawmaker has had to negotiate with his own party's members as much, if not more, as he has had to parlay with Democrats. This vote is emerging as one of the biggest tests of Boehner's ability to hold his caucus together and pass legislation.
"Listen, for the sake of jobs, for the sake of our country, I'm asking the representatives in the House in a bipartisan way and asking my colleagues in the Senate, let's pass this bill and end this crisis," Boehner pleaded.
Boehner's debt legislation needs 216 votes to pass in the House.
Going down to the wire, the Speaker got a boost overnight from the Congressional Budget Office, which determined the Speaker's retooled legislation would reduce spending by $917 billion over 10 years, crossing the $900 billion needed to lift debt ceiling. CBO a day earlier said Boehner's plan would not cover the governments debt payments (CBO also said Senate Democratic plan fell short).
Wall Street, late to the fight, but now fully engaged, also stepped up its lobbying for a deal. More than a dozen leading American financiers also wrote to President Obama and the Congress, begging them to settle the debt deal ahead of Tuesday's deadline. They fear a defeault -- the first-ever in U.S. history -- would be a catastrophe for Wall Street and Main Street.
"A default on our nation’s obligations, or a downgrade of America’s credit rating, would be a tremendous blow to business and investor confidence -- raising interest rates for everyone who borrows, undermining the value of the dollar, and roiling stock and bond markets -- and, therefore, dramatically worsening our nation’s already difficult economic circumstances," the bankers wrote.
Boehner knows his bill is doomed no matter what happens with his House vote this evening. The Senate Democrats are going to kill it and Obama promised to veto it. Obama is adamant that the debt resolution not be a short-term incremental fix. The Boehner measure would force another debt showdown over the holidays at the end of this year.
"Republicans cannot get the short-term Band-Aid they will vote on in the House today," said Senate Democratic leader Harry Reid of Nevada. "It will not get one Democratic vote in the Senate. All 53 members of the Senate Democratic Caucus wrote to the Speaker last night to tell him they will not vote for it."
Ultimately, in the hours immediately after tonight's vote lawmakers from the House and Senate will have to decide what they can pass, and they will be forced to make a deal, or potentially send the U.S. economy into an unknown abyss.
Wednesday, July 27, 2011
Tea Party Resolute, but Wall Street Finally Freaks Over Debt Debacle
Wall Street and global financiers finally ended a schizophrenic stand on the debt shenanigans in Washington, soundly signaling with a nearly 200-point drop in the Dow Jones industrials today that a default will likely rip apart a weary American economy.
"Right now I'm pretty worried," said Howard Ward, a chief investment officer at asset manager GAMCO, quoted by the Associated Press.
Wall Street, like much of Washington, has been slow to catch up with the will of Americans, who for weeks have indicated in poll after poll that they want a debt compromise. They even would be willing to see revenues increase along with the slash and gut budget savings to get it done, surveys repeatedly show.
Others, like the Tea Party ideologues refuse to give an inch, and that is creating the unfathomable possibility that the U.S. might just default.
"As hours pass and the uncertainty builds, I think the market is starting to price in the potential that we might not have a solution by August 2," Channing Smith, managing director of Capital Advisors Inc., told Forbes. "Confidence in our political system is beginning to fade."
While investors worldwide finally awoke to the dangerous reality that stubborn political gamesmanship and entrenched ideological warfare truly has brought the U.S. to the brink of default, the non-partisan Congressional Budget Office piled on with more bad news.
CBO ruled debt-reduction plans by GOP House Speaker John Boehner and Senate Democratic leader Harry Reid both fall short of their projected savings.
Boehner's debt ceiling plan would cut the deficit by about $850 billion in 10 years, less than the $1.2 trillion claimed, while Reid’s plan would slash $2.2 trillion over 10 years, short of its promised $2.7 trillion in savings, CBO said.
It forced Boehner to retool his legislation, while Reid said his Senate measure could be repaired with a tweak (Reid and the Senate Democrats are unified in the defeat of the incremental Boehner plan, and Obama has promised to veto it. They do not want to revisit this again at Christmas time, as the plan calls for).
The pitiful partisan parlay seems to trigger a battle-a-moment, especially for Boehner, whose shadowboxing with President Obama has exposed a much more unwieldy circular firing squad -- one that pits the Speaker against the House Tea Party faction, at times including his deputy, House GOP leader Eric Cantor, and the mainstream Senate Republicans.
Perhaps fighting for more than just his debt legislation, Boehner decided go to the stick and take on the stonewall Tea Party faction.
"Get your ass in line," he told House Republicans today at a closed-door meeting, where he demanded his caucus vote tomorrow in favor of a retooled two-step debt reduction plan.
"I can't do this job unless you're behind me," Boehner pleaded.
(There are side fights, too: Tea Party scrapper Joe Walsh has decided to take on GOP Sen. John McCain, who has blasted the Tea Party for stonewalling and touting a minority position on lifting the debt ceiling. Walsh blamed McCain for the debt crisis).
As the impasse took a turn for the dramatic away from the public eye, it played out loud and clear on Wall Street. The escapades and impotence of America's elected officials may already have cost the nation its AAA credit rating, even if the problem is rectified, ratings experts have warned.
All the markets appeared to be jolted by the desperate debt dealings:
-Standard & Poor’s 500 fell 27.05 points, 2.03%, to 1,304.89.
-Dow Jones average declined 198.75 points, 1.595%, to 12,302.55.
-Nasdaq composite dropped 75.17 points, or 2.65%, to 2,764.79.
-10-year Treasury note fell 7/32, to 101 7/32; yield up 2.98% from 2.96%
The standoff in Washington also was a contributing factor to the European markets, though the state of the local economies was big blame for a third straight day of losses.
The pan-European Stoxx 600 index sank 1.1% to end at 267.05. Markets from the FTSE to the Dax -- and everything else in-between -- took a hit.
Asian markets tonight (Washington time) are bracing for more of the same, expected to follow where the U.S. financial markets left off -- in the hopper.
Congress is tasked with raising the country's $14.3 trillion borrowing limit by Aug. 2 to avoid a debt default.
"Given that it is so clearly within the capacity of Congress to find the compromise that could clear both houses and be signed into law to solve this problem, I still believe that because the stakes are so high and because the American public so clearly wants this done in the right way, that in the end, it will get done," said White House spokesman Jay Carney.
"Right now I'm pretty worried," said Howard Ward, a chief investment officer at asset manager GAMCO, quoted by the Associated Press.
Wall Street, like much of Washington, has been slow to catch up with the will of Americans, who for weeks have indicated in poll after poll that they want a debt compromise. They even would be willing to see revenues increase along with the slash and gut budget savings to get it done, surveys repeatedly show.
Others, like the Tea Party ideologues refuse to give an inch, and that is creating the unfathomable possibility that the U.S. might just default.
"As hours pass and the uncertainty builds, I think the market is starting to price in the potential that we might not have a solution by August 2," Channing Smith, managing director of Capital Advisors Inc., told Forbes. "Confidence in our political system is beginning to fade."
While investors worldwide finally awoke to the dangerous reality that stubborn political gamesmanship and entrenched ideological warfare truly has brought the U.S. to the brink of default, the non-partisan Congressional Budget Office piled on with more bad news.
CBO ruled debt-reduction plans by GOP House Speaker John Boehner and Senate Democratic leader Harry Reid both fall short of their projected savings.
Boehner's debt ceiling plan would cut the deficit by about $850 billion in 10 years, less than the $1.2 trillion claimed, while Reid’s plan would slash $2.2 trillion over 10 years, short of its promised $2.7 trillion in savings, CBO said.
It forced Boehner to retool his legislation, while Reid said his Senate measure could be repaired with a tweak (Reid and the Senate Democrats are unified in the defeat of the incremental Boehner plan, and Obama has promised to veto it. They do not want to revisit this again at Christmas time, as the plan calls for).
The pitiful partisan parlay seems to trigger a battle-a-moment, especially for Boehner, whose shadowboxing with President Obama has exposed a much more unwieldy circular firing squad -- one that pits the Speaker against the House Tea Party faction, at times including his deputy, House GOP leader Eric Cantor, and the mainstream Senate Republicans.
Perhaps fighting for more than just his debt legislation, Boehner decided go to the stick and take on the stonewall Tea Party faction.
"Get your ass in line," he told House Republicans today at a closed-door meeting, where he demanded his caucus vote tomorrow in favor of a retooled two-step debt reduction plan.
"I can't do this job unless you're behind me," Boehner pleaded.
(There are side fights, too: Tea Party scrapper Joe Walsh has decided to take on GOP Sen. John McCain, who has blasted the Tea Party for stonewalling and touting a minority position on lifting the debt ceiling. Walsh blamed McCain for the debt crisis).
As the impasse took a turn for the dramatic away from the public eye, it played out loud and clear on Wall Street. The escapades and impotence of America's elected officials may already have cost the nation its AAA credit rating, even if the problem is rectified, ratings experts have warned.
All the markets appeared to be jolted by the desperate debt dealings:
-Standard & Poor’s 500 fell 27.05 points, 2.03%, to 1,304.89.
-Dow Jones average declined 198.75 points, 1.595%, to 12,302.55.
-Nasdaq composite dropped 75.17 points, or 2.65%, to 2,764.79.
-10-year Treasury note fell 7/32, to 101 7/32; yield up 2.98% from 2.96%
The standoff in Washington also was a contributing factor to the European markets, though the state of the local economies was big blame for a third straight day of losses.
The pan-European Stoxx 600 index sank 1.1% to end at 267.05. Markets from the FTSE to the Dax -- and everything else in-between -- took a hit.
Asian markets tonight (Washington time) are bracing for more of the same, expected to follow where the U.S. financial markets left off -- in the hopper.
Congress is tasked with raising the country's $14.3 trillion borrowing limit by Aug. 2 to avoid a debt default.
"Given that it is so clearly within the capacity of Congress to find the compromise that could clear both houses and be signed into law to solve this problem, I still believe that because the stakes are so high and because the American public so clearly wants this done in the right way, that in the end, it will get done," said White House spokesman Jay Carney.
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