Updated at 6:3e0 a.m. edt
Democrats and Republicans yesterday agreed to a $1 trillion deal for starters to settle the debt crisis that threatened to tank the global economy.
The Congress and White House are expected to vote today for the deal that will raise the $14.3 trillion federal debt limit.
Updated at 3:30 p.m. edt
The Senate killed a Democratic debt reduction bill on a procedural vote this afternoon, but do-or-die talks jump-started overnight has leaders on both sides cautiously optimistic a deal can get done to avoid a default by a Tuesday deadline.
A 50-49 vote failed to end a GOP filibuster, as Democrats fell 10 votes short of the 60 needed to move Senate Democratic Harry Reid's bill to a final vote. It was seen mostly as a symbolic vote, since it was expected to fail.
All hope of beating the clock and raising the $14.3 trillion debt limit comes down to $3 trillion in spending cuts being negotiated by Senate GOP leader Mitch McConnell and President Obama.
"Despite all the reporting, no deal has been reached, there are still (important) issues to work out, and a lot of bad info is floating out there," White House Communications Director Dan Pfeiffer said in an early afternoon Twitter dispatch.
Democratic leaders from both chambers huddled in House Democratic leader Nancy Pelosi's office to plot their strategy. Outside that session Reid told reporters, deal is "a lot closer than yesterday but we still have a ways to go."
Some House Democrats were concerned that Obama would give away too much in his negotiations, and then ask them to help pass a lousy deal. "We've carried his water before, but sooner or later we'll drop the bucket if he keeps playing us like a patsy," said a senior House Democratic staffer.
Some Demnocreats are still miffed at Obama for deciding against letting the Bush-era tax cuts for the wealthiest Americans expire in the budget negotiations last December, arguing that it would help spur the economy by continuing to give the richest Americans a free ride. Those Democrats note the economy is worse now than it was then.
On the morning talks shows, McConnell explained the framework of a deal would include two waves of spending cuts, but would avoid a messy vote and replay of this ordeal over the holidays, as House Speaker John Boehner had wanted.
The first wave of cuts would include $1 trillion in set-in-stone reductions to discretionary spending, but a bipartisan "super congressional committee" would need to determine the second round of cuts by Thanksgiving of 2012.
There would be automatic "trigger" with cuts to the Pentagon and entitlements if Congress does not act on the super committee's recommendations.
end update
---[
With a Tuesday deadline looming, Democratic and Republican negotiators made strides overnight on a potential $3 trillion debt-reduction deal, Senate GOP leader Mitch McConnell said this morning.
"We're very close," McConnell said on CNN's "State of the Union" program, predicting a deal could be reached "soon."
The framework includes cuts in discretionary spending and caps on spending increases over 10 years, McConnell said. It calls for creation of a bipartisan debt-cuttting committtee made up of lawmakers, and includes a provision agreeing to a separate vote on creating a balanced-budget amendment to the constitution, he said.
The White House has said a deal must scrap the House GOP plan that calls for another debt debate and a vote in six months. "We're working on the accommodations that will get us there," McConnell said.
Sen. Chuck Schumer (D-N.Y.), the No. 3 Democrat in the Senate, cautioned that there is no deal as of yet, but he is very optimistic that the U.S. will not for the first-time ever default on its loan payments.
An apparent breakthrough came after Senate Democratic leader Harry Reid agreed to delay a 1 a.m. edt vote on his debt-reduction resolution in order to give negotiators time to see if they could move their talks forward. Reid rescheduled the vote for 1 p.m. today, but if a deal is close he may be persuaded to back up the vote again and amend or replace his legislation.
The hard part may come after a deal is reached. Even if the leaders have an agreement they still have to sell it to their rank and file, including the obstructionist Tea Party faction and contentious House liberals.
Showing posts with label deficit reduction. Show all posts
Showing posts with label deficit reduction. Show all posts
Sunday, July 31, 2011
Saturday, July 30, 2011
GOP & Dems Talking, But No Closer to a Debt Reduction Deal
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."
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."
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.
Tuesday, July 19, 2011
Obama likes Gang of Six Proposal; House GOP Moves on Draconian Plan
Updated 9 p.m.
The House passed the Tea Party-backed "Cut, Cap and Balance" plan 234-190 this evening as expected, but the measure will now die a certain death in the Senate, with President Obama's promised veto a final backstop to kill the measure.
"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," Obama said ahead of the vote.
Meanwhile, the latest polls show the GOP hardline approach is turning off a lot of Americans and is bolstering Obama's approach. An NBC/Wall Street Journal poll shows more Americans would blame the GOP if the U.S. does not raise the debt ceiling and defaults on its bills.
The same poll shows an overwhelming majority of Americans want the Democrats and Republicans to compromise -- something the House GOP, led by House Republican leader Eric Cantor of Virginia, has refused to do.
end update
---[
The House GOP is set to approve today its dead-on-arrival "Cut, Cap and Balance" plan to raise the debt ceiling, but the more mainstream Republicans in the newly reformed bipartisan Senate Gang of Six are proposing a popular $4 trillion in cuts over the next decade.
President Obama called the Gang of Six plan "a very significant step" because it appears to take a balanced approach to making significant cuts while increasing the revenue stream by eliminating some corporate tax loopholes, as well.
"We now have a bipartisan group of senators who agree with that balanced approach," Obama said at an afternoon appearance today in the White House briefing room.
"We are now in the same playing field," Obama added, noting there is still a long way to go before a final agreement is reached.
The Gang of Six, which is calling in its plan for $500 billion in immediate cuts as a down payment, re-convened after Sen. Tom Coburn (R-Okla,) succeeded in getting the group to agree to some cuts in health care programs. Coburn had left the group in May over disputes in how to cut into the $14.3 trillion debt.
Some Senate Republicans and Democrats have signaled they like so far what they see form the Gang of Six. Other senators from both parties say they want to hear more before endorsing the newly emerging plan.
The Gang of Six -- Coburn, Kent Conrad (D-N.D.), Mark Warner (D-Va.), Mike Crapo (R-Idaho), Saxby Chambliss (R-Ga.) and Dick Durbin (D-Ill.) -- presented an outline of the plan top 49 senators this morning.
"I cannot suggest they all signed up," Durbin told the Senate. "I would never expect that to happen, but it is significant that at this moment in our history so many felt positive towards what we are doing."
The Senate was prompted to take the lead in the debt-ceiling debate after House Republicans, led by GOP leader Rep. Eric Cantor (R-Va.), gridlocked the negotiations with a refusal to allow any new revenue streams to be created as part of a deal.
The two leaders of the Senate, Sens. Harry Reid (D-Nev.) and Mitch McConnell (R-Ky.), are still working on emergency contingency legislation that would only ensure the Aug. 2 debt limit deadline is not crossed. The Reid-McConnell measure would not cut the deficit.
House Republicans, committed to appeasing Tea Party supporters, put forward a controversial plan that would cut spending by $111 billion in 2012 and cap future spending at 19.9% of the nation's gross domestic output. The proposal requires that Congress pass a balanced-budget constitutional amendment and send it to the states for the lengthy ratification process.
That "Cut, Cap and Balance" plan does not have enough support to pass in the Senate, but even if it did, Obama has said he will veto it.
The House passed the Tea Party-backed "Cut, Cap and Balance" plan 234-190 this evening as expected, but the measure will now die a certain death in the Senate, with President Obama's promised veto a final backstop to kill the measure.
"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," Obama said ahead of the vote.
Meanwhile, the latest polls show the GOP hardline approach is turning off a lot of Americans and is bolstering Obama's approach. An NBC/Wall Street Journal poll shows more Americans would blame the GOP if the U.S. does not raise the debt ceiling and defaults on its bills.
The same poll shows an overwhelming majority of Americans want the Democrats and Republicans to compromise -- something the House GOP, led by House Republican leader Eric Cantor of Virginia, has refused to do.
end update
---[
The House GOP is set to approve today its dead-on-arrival "Cut, Cap and Balance" plan to raise the debt ceiling, but the more mainstream Republicans in the newly reformed bipartisan Senate Gang of Six are proposing a popular $4 trillion in cuts over the next decade.
President Obama called the Gang of Six plan "a very significant step" because it appears to take a balanced approach to making significant cuts while increasing the revenue stream by eliminating some corporate tax loopholes, as well.
"We now have a bipartisan group of senators who agree with that balanced approach," Obama said at an afternoon appearance today in the White House briefing room.
"We are now in the same playing field," Obama added, noting there is still a long way to go before a final agreement is reached.
The Gang of Six, which is calling in its plan for $500 billion in immediate cuts as a down payment, re-convened after Sen. Tom Coburn (R-Okla,) succeeded in getting the group to agree to some cuts in health care programs. Coburn had left the group in May over disputes in how to cut into the $14.3 trillion debt.
Some Senate Republicans and Democrats have signaled they like so far what they see form the Gang of Six. Other senators from both parties say they want to hear more before endorsing the newly emerging plan.
The Gang of Six -- Coburn, Kent Conrad (D-N.D.), Mark Warner (D-Va.), Mike Crapo (R-Idaho), Saxby Chambliss (R-Ga.) and Dick Durbin (D-Ill.) -- presented an outline of the plan top 49 senators this morning.
"I cannot suggest they all signed up," Durbin told the Senate. "I would never expect that to happen, but it is significant that at this moment in our history so many felt positive towards what we are doing."
The Senate was prompted to take the lead in the debt-ceiling debate after House Republicans, led by GOP leader Rep. Eric Cantor (R-Va.), gridlocked the negotiations with a refusal to allow any new revenue streams to be created as part of a deal.
The two leaders of the Senate, Sens. Harry Reid (D-Nev.) and Mitch McConnell (R-Ky.), are still working on emergency contingency legislation that would only ensure the Aug. 2 debt limit deadline is not crossed. The Reid-McConnell measure would not cut the deficit.
House Republicans, committed to appeasing Tea Party supporters, put forward a controversial plan that would cut spending by $111 billion in 2012 and cap future spending at 19.9% of the nation's gross domestic output. The proposal requires that Congress pass a balanced-budget constitutional amendment and send it to the states for the lengthy ratification process.
That "Cut, Cap and Balance" plan does not have enough support to pass in the Senate, but even if it did, Obama has said he will veto it.
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