Political Highlights Debt Ceiling Showdown Recap July 18-24, 2011: 2 Plans, 8 Days No Debt Deal in Sight — Will the US Default on August 2, 2011?

POLITICAL HIGHLIGHTS

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

THE HEADLINES: DEBT CEILING SHOWDOWN: OBAMA VS CONGRESSIONAL LEADERS: JULY 18-24, 2011

• Factbox: How the Obama/Boehner debt talks unraveled: President Barack Obama and House Speaker John Boehner had agreed on the rough outlines of a far-reaching budget deal that would allow the United States to avert an imminent default before Boehner broke off talks on Friday.
  Here is a summary of what the two sides had agreed upon, where they had differed, and how things fell apart… – Reuters, 7-24-11
• Timeline: How the debt talks spiraled into crisis: With financial markets on edge, White House officials and Republican leaders scrambled to reassure them that the United States will avert default and lift its $14.3 trillion borrowing limit before August 2. Following is a timeline of the U.S. debt debate…. – Reuters, 7-24-11
• Debt Ceiling for Dummies: Why Compromise Is so Necessary — Huff Post, 7-24-11
• SCENARIOS-Options for raising the U.S. debt limit: Democrats and Republicans in Congress, unable to compromise on how to cut budget deficits and raise U.S. borrowing authority, are now working on their own, competing bills. With nine days’ left until the United States runs out of money to pay all its bills after Aug. 2, the two parties were rushing to get their respective bills moving through Congress this week.
  Here are some scenarios for raising the debt limit by the early August deadline to avoid a potentially crippling government default:
  AN ALL SPENDING CUTS, NO REVENUES PLAN…
  A SHORT-TERM DEBT LIMIT INCREASE…
  BLEND THE TWO IDEAS?…
  MCCONNELL “FALLBACK” PLAN…
  TALKS RESUME…
  OBAMA INVOKES THE CONSTITUTION… – Reuters, 7-24-11
• Timeline: Debt debate, 7-11-11: President Barack Obama and top lawmakers will meet again Monday in search of a deal on slashing the U.S. budget deficit and raising the $14.3 trillion debt ceiling before the United States defaults.
  Obama wants to strike a deal well before August 2, when the Treasury Department says it will no longer be able to honor its obligations and issue new bonds without breaching the limit that Congress set on how much the United States can borrow.
  Republican and Democratic lawmakers say any increase must include measures to ensure the country’s debt remains at a sustainable level. The debt-reduction debate is a sharp shift for Washington, which less than a year ago was focused on additional deficit spending to lower the unemployment rate.
  Following is a timeline of the debate…. – Reuters, 7-11-11
• Factbox: What’s on the table in debt talks: President Barack Obama and congressional leaders resume their White House talks on Monday to see if they have the makings of a deal to trim budget deficits and avert a looming default.
  The Treasury Department has warned it will run out of money to cover the country’s bills if Congress does not raise the $14.3 trillion debt ceiling by August 2.
  Although Democrats and Republicans agree on the need for trillions of dollars in budget savings, they remain sharply divided about how to get there.
  Following is a summary of the debate… – Reuters, 7-11-11

JULY 25, 2011: NO DEAL YET — BOEHNER & REID EACH DEVISING PLANS — BOEHNER WILL REVEAL UNLIATERAL PLAN IN THE PM FOR WEDNESDAY VOTE

• Two Deals, No Time: It’s crunch time. Congressional leaders have at most two days to days to reach an agreement to raise the debt limit, and lawmakers have made little progress on preventing the unthinkable.
  On Sunday talks “broke down,” according to Senate Majority Leader Harry Reid (D-NV), a particularly troubling development at a point where every hour counts. While August 2nd may be the deadline, a deal must be reached no less than 5 days sooner to guarantee passage in time.
  The House of Representatives requires that bill be made available online for three calendar days before a vote. In the Senate, rules require that a cloture motion to end debate “ripen” for over a day, and even then 30 hours of debate are required.
  Democratic and Republican legislators are now set out to go it alone, with competing plans to cut the deficit and raise the debt limit, beginning a high-stakes game of chicken to see which side blinks first.
  Speaker of the House John Boehner (R-OH) is expected to lay out a two-stage deficit reduction and debt limit package to GOP lawmakers at 2 p.m. today, and release make it available publicly this afternoon to allow for a Wednesday vote.
  The Republican plan would raise the debt limit in two tranches, requiring a second vote early next year after a deficit reduction commission exacts steep spending cuts…. – Business Insider, 7-25-11
• Three GOP leaders with three ideas on the debt: For Republicans, the debt talks have shown three leaders calling three different plays, each trying to push and pull congressional Republicans in his direction. So far, all three have failed to find a plan that all of them can support.
  Senate Minority Leader Mitch McConnell (R-Ky.) declared on June 19 that there wasn’t enough time to approve any of the plans to raise the government’s debt ceiling by the Aug. 2 deadline. He proposed a short-term hike to buy more time.
  Two days later, House Majority Leader Eric Cantor (R-Va.) declared short-term deals a non-starter and said “there are no votes” for any grand bargain including higher tax revenue.
  The next night, House Speaker John A. Boehner (R-Ohio) snuck into a secret meeting with President Obama to launch an effort for a “big deal” including hundreds of billions of dollars in new revenue.
  McConnell, Boehner and Cantor say they are on the same side and never publicly criticize one another. But for the past five weeks, each has appeared to play to different audiences inside the Grand Old Party, with different motivations, according to aides and Republican lawmakers…. – WaPo, 7-25-11

JULY 24, 2011: SPEAKER JOHN BOEHNER PROMISES DEBT CEILING PLAN BY ENDS OF DAY — FORGES AHEAD ON TWO STAGE PROCESS PLAN

Boehner tells House GOP he will press ahead with his own plan for reducing the deficit: Speaker John Boehner said in a conference call with House Republicans that he would continue to pursue a two-stage strategy that would give the Treasury only about $1 trillion in additional borrowing authority, forcing another debt-limit battle early next year.
Hours before Asian financial markets were set to open Sunday evening, House and Senate leaders are now threatening to pursue two different approaches to averting a government default.

“There will be a two-stage process; it’s just not physically possible to do all of this in one step. I know the president is worried about his next election. But my God, shouldn’t he be worried about the country? We have got a budget deficit of $1.5 trillion. We’re borrowing 42 cents on every dollar we spend, we have $14.5 trillion national debt. It is time to get serious about stopping the spending here in Washington, D.C.” — Speaker of the House John Boehner on Fox News

Obama cannot raise debt ceiling on his own: Timothy Geithner on the ABC program “This Week”: “It is not a workable option. This is not a workable option to limit the damage to the American people that would come from Congress not acting to raise the — to avoid a default crisis.”

“If you’re the leader of the free world, would you please come to microphone and quit hiding in the basement about your proposals, and come on up and address the American people? Is he chicken?
Where’s the president of the United States on the most pressing financial challenges of our country on entitlement reform? Where is his specific Medicaid reform proposal? Where is his specific Medicare reform proposal? Where is his Social Security reform proposal?
The answer is he doesn’t have one. You can’t find him publicly talking about that. He’s ducking, he’s bobbing, he’s weaving. He’s not leading, and that’s not the kind of president we need, and that’s why he needs to be removed from office.” — GOP presidential candidate Tim Pawlenty, the former Minnesota governor on CNN’s “State of the Union.”

“Now the President is outraged because the GOP House leadership called his bluff and ended discussions with him because they deemed him an obstruction to any real solution to the debt crisis. He has been deemed a lame duck president. And he is angry now because he is being treated as such.
His foreign policy strategy has been described as “leading from behind.” Well, that’s his domestic policy strategy as well. Why should he be surprised that he’s been left behind in the negotiations when he’s been leading from behind on this debt crisis? Thank you, GOP House leaders. Please don’t get wobbly on us now.” 2012 can’t come soon enough. — Sarah Palin on her Facebook Page

• Factbox: How the Obama/Boehner debt talks unraveled: President Barack Obama and House Speaker John Boehner had agreed on the rough outlines of a far-reaching budget deal that would allow the United States to avert an imminent default before Boehner broke off talks on Friday.
  Here is a summary of what the two sides had agreed upon, where they had differed, and how things fell apart… – Reuters, 7-24-11
• No deal yet on debt crisis. How will Asian markets and Wall Street react?: Washington’s self-imposed deadline to do something credible on the debt crisis before the Asian financial markets opened on Sunday passed in silence. “There could be extreme turmoil in markets,” says one expert…. – CS Monitor, 7-24-11
• Boehner, Reid seek own debt proposals: With just eight days left to raise the nation’s $14.2 trillion debt ceiling, President Obama and Republican congressional leaders failed Sunday to reach a bipartisan deal, leaving both sides to devise their own solutions.
  Democratic and Republican congressional leaders were working on separate plans to raise the debt ceiling by $2.4 trillion and avoid default. Both sides said they believed a compromise was still possible.
  Obama met for 66 minutes Sunday afternoon with Sen. Harry Reid of Nevada and Rep. Nancy Pelosi of California, the two Democratic congressional leaders, but they emerged with no plan or public comment….
  Without an agreement, Reid and House Speaker John Boehner, R-Ohio, are working on two, still hazily defined, proposals… – USA Today, 7-24-11
• Boehner Moving Ahead With Short-Term Debt Plan: House Speaker John Boehner plans to press ahead with a shorter-term increase in the U.S. debt limit than President Barack Obama has requested, he told lawmakers today, defying a veto threat and signaling continued stalemate in the U.S. Congress as time runs short for a deal.
  Boehner told rank-and-file Republicans during a conference call this afternoon that they needed to pull together as a team to block Obama, who has asked for a $2.4 trillion borrowing boost in the $14.3 trillion debt ceiling, from obtaining the money all at once, without any guarantees of spending cuts. His remarks were described on condition of anonymity by a person familiar with the discussion.
  The speaker said that no one is willing to default on the full faith and credit of the U.S., according to the person.
  The comments indicated that Boehner plans to force action on his plan to provide only a temporary borrowing boost of about $1 trillion accompanied by spending cuts of at least as much, tying the remainder of the debt-ceiling increase Obama has requested to further cuts in the future. The White House says Obama would veto such a measure…. – Bloomberg, 7-24-11
• House GOP and Senate Democrats each prepare new debt plans: With world financial markets watching nervously, top Democrats and Republicans in Congress each scrambled Sunday to put together new proposals to avert a looming government debt default and a potential global financial crisis.
  Senate Democratic Leader Harry Reid of Nevada drafted a new plan that would allow a multi-year increase in the nation’s debt ceiling, offset by an equal or greater amount of spending cuts spread over the coming decade. Significantly, it would not include tax increases.
  House Speaker John Boehner planned to outline a new blueprint on Monday amid warnings from their leader that they must find a solution that can get through the Democratic Senate.
  They all failed to meet their own deadline for a bipartisan agreement before markets opened in Asia on Sunday evening U.S. time, the first markets to open since talks broke down at the White House Friday evening.
  Financial markets appeared to be watching cautiously, but initial trading made it clear that they were unshaken as yet.
  Market jitters are expected to rise each day from now on that the United States government fails to raise its $14.3 trillion legal limit for borrowing before its Aug. 2 deadline. If the ceiling isn’t lifted by then, that could force the government to stop paying paychecks or benefit checks — or to default for the first time in history by failing to pay bond holders debt already owed. That could panic financial markets and kick the weak U.S. economy back into recession…. – McClatchy Newspapers, 7-24-11
• Obama, Congress fail to break debt deadlock: Lawmakers failed to achieve a budget breakthrough and instead worked on rival plans Sunday in a impasse that heightened prospects for a catastrophic debt fault.
  With time running out, Republican and Democratic lawmakers split into opposite camps and held talks among themselves. There were no signs of a deal emerging to head off a default in nine days that could trigger global economic calamity and downgrade America’s Triple-A credit rating.
  Lawmakers missed a self-imposed deadline of producing a deficit-reduction deal by the time Asian markets opened on Sunday, but planned to outline a proposal Monday. A deficit deal is needed to permit a vote to increase the $14.3 trillion U.S. debt ceiling by August 2.
  President Barack Obama heard details of a Senate Democratic plan that would rely on spending cuts, not new tax revenue, which would violate one of his key demands…. – Reuters, 7-24-11
• No deal on debt ceiling: The day started with congressional leaders trying to resolve the dangerous impasse over the debt ceiling — and calm any anxiety markets may have when they reopened Monday.
  It ended in a continuing impasse, with each party sketching out their own plans and showing little common ground.
  Senate Majority Leader Harry Reid said he is preparing a proposal to raise the ceiling through the end of 2012 and cut $2.7 trillion in debt. The measure would not call for any tax revenue increases.
  On the other side, House Speaker John Boehner told GOP lawmakers Sunday in a conference call that he wants a deal that sticks to the principles of the Cut, Cap and Balance bill that the House passed and Senate rejected last week, sources familiar with the call told CNN.
  A key sticking point remains how much to raise the debt ceiling: Democrats want it raised enough so the issue won’t come up again until after the November 2012 election. Boehner has said that is impossible; he wants it raised in two, smaller increments.
  It remains to be seen if the two sides can resolve their conflicts soon…. – CNN Money, 7-24-11
• ‘World News’ Political Insights: Washington Dysfunction Hits New Low: The only problem with talk of compromise is that it doesn’t have a natural constituency. Until and unless, of course, it has a huge one.
  The stand-off on debt negotiations declared late Friday begins to have real repercussions this week, as a new political player with even crasser motivations than Democrats or Republicans emerges: financial markets.
  The market reaction injects an unpredictable element into a drama that’s actually been quite predictable. Neither side is willing to move off of core principles because both sides are convinced that they’re right and that the public backs them up on it.
  Three consecutive “change” elections — two favoring Democrats, one Republicans — has created divided government. It’s also exacerbated the divide in perceptions around public sentiment, making any middle ground even more elusive.
  It isn’t that politicians don’t know that voters are angry. It’s that both sides are convinced that they’re only angry with the other side…. – ABC News, 7-24-11
• Boehner Said to Tell Republicans No Deal Yet as Obama to Meet Pelosi, Reid: House Speaker John Boehner is telling rank-and-file Republicans that there’s no agreement on a plan for raising the debt ceiling before a default threatened for Aug. 2, a sign of continuing stalemate in the U.S. Congress as time runs short for a deal.
  A Republican congressional official said Boehner, speaking by conference call to lawmakers, is reporting that discussions are continuing on such a plan.
  Boehner told his members yesterday that he wanted to send markets a positive sign by the time Asian markets began opening this afternoon that Congress would strike a deal to break the impasse over raising the $14.3 trillion borrowing limit.
  With no evidence that such compromise has been reached, President Barack Obama will meet at 6 p.m. at the White House with Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi…. – Bloomberg, 7-24-11
• Boehner presses ahead with unilateral debt plan: Hours before Asian financial markets were set to open Sunday evening, talks over the federal debt limit were at a standstill, and House and Senate leaders were threatening to pursue two different approaches to averting a government default in a messy legislative showdown.
  In a conference call with House Republicans, Speaker John A. Boehner (R-Ohio) said he would press ahead with a two-stage strategy that would give the Treasury only about $1 trillion in additional borrowing authority, forcing another debt-limit battle early next year with the political parties in the heat of the 2012 presidential campaign.
  “If we stick together, we can win this for the American people,” Boehner told his troops, participants said.
  Boehner promoted that strategy on Fox News Sunday, telling host Chris Wallace that “there’s going to be a two-stage process. It’s not physically possible to do all of this in one step.” In a barbed aside, he added: “I know the president’s worried about his next election. But my God, shouldn’t we be worried about the country?”… – WaPo, 7-24-11
• Boehner tells Republicans to stay united on debt deal: House of Representatives Speaker John Boehner on Sunday told his fellow Republicans that “there is a path” to cut U.S. spending and raise the debt ceiling, but it will require his party to accept sacrifices, according to two sources who heard his message.
  On a conference call, Boehner said he does not think it is possible to negotiate a large spending-cut deal directly with the White House, the sources said.
  He told Republicans he is drafting legislation that reflects the principles of a strict spending-cut bill that failed in the Democratic-controlled Senate last week, the sources said. – Reuters, 7-24-11
• Reid Working on Backup Plan to Lift Ceiling, Cut Spending: Senate Democratic Majority Leader Harry Reid is working on a backup plan to increase the debt ceiling by $2.5 trillion and cut spending by the same amount in the event there is no further progress in talks between Democratic and Republican congressional leaders, a Senate Democratic aide said Sunday.
  The plan would have no new tax increases, the aide said. The $2.5 trillion increase in the debt limit would be enough to support federal spending through 2012, avoiding the need to revisit the issue next year.
  The Senate Democratic leader could brief some members of his caucus on the plan later Sunday evening, the aide said. More details of what would constitute the spending reductions would not be available until after that briefing occurred…. – WSJ, 7-24-11
• John Boehner, GOP prepared to ‘move on their own’ to unveil debt ceiling plan Sunday: House Speaker John Boehner said Sunday he’s prepared to go it alone and unveil a plan to raise the nation’s debt ceiling timed to calm the opening of the Asian markets.
  “I would prefer to have a bipartisan approach to solve this problem. If that’s not possible, I and my Republican colleagues in the House are prepared to move on their own…today,” Boehner told Fox News Sunday.
  The move comes amid a weekend of emergency meetings on Capitol Hill as lawmakers try to cut a path out of deadlock to calm investors before the Asian markets open later this afternoon.
  Boehner’s latest proposal is a two-phase plan that would raise the debt ceiling about $1 trillion through 2011 and be offset by an equal amount of savings.
  A second debt boost would be pegged to upwards of $3 trillion more in savings in 2012, with a bipartisan committee charged with coming up with a mix of spending cuts, revamped programs and tax overhauls. Such a plan – which would mean another debt debate in the middle of the 2012 election season – was a non-starter with Democrats and the administration…. – NY Daily News, 7-24-11
• Developments in U.S. debt talks: U.S. House of Representatives Speaker John Boehner tells Fox News Sunday that House Republicans are prepared to push through their own deficit reduction package if congressional leaders fail to produce a bipartisan plan by Sunday afternoon. That would be just hours before financial markets open in Asia. With time running out, the Democratic-led Senate might have no choice but to accept what the Republican-led House passes this week.
  White House Chief of Staff Bill Daley tells NBC’s “Meet the Press” that any short-term deal to raise the debt limit would harm the economy because financial markets and business leaders would not have the certainty they need to make investment decisions. Democrats want a debt limit extension through the 2012 presidential election year…. – Reuters, 7-24-11
• Boehner Writes a House Plan in Case Debt Deal Stalls: Speaker John A. Boehner said Sunday that the House would prepare its own deficit reduction package if Congress and the White House failed to agree on a bipartisan plan by Sunday afternoon, as lawmakers forged ahead in an increasingly grim standoff over whether to raise the nation’s debt ceiling.
  Leaders of both parties continued to negotiate over the telephone, racing toward the opening of the Asian markets, which happens later on Sunday. That opening is widely feared to be the first real test of tangible financial market fallout from the impasse over the debt limit. It was far from clear that such a deal would or could be reached by that hour…. – NYT, 7-24-11
• Boehner asks GOP lawmakers to embrace new plan: House Speaker John Boehner implored fellow House Republicans Sunday to get behind a measure to resolve the debt crisis that can pass both the House and Senate.
  In a conference call, Boehner told the House Republicans that some of them will have to make sacrifices as part of the deal. A person familiar with Boehner’s remarks said the speaker told lawmakers that both the House and Senate are ready to embrace significant spending reductions.
  Boehner, however, said he does not believe President Barack Obama will ever embrace a big package that does not include tax increases…. – AP, 7-24-11
• US Republicans may present a proposal to Obama tonight: US Republicans may present a proposal to Obama tonight The impasse on Capitol Hill over how to reduce the United States´ budget deficit continues this weekend. Although it would seem that some progress has been made there is still, at least, and in the best of cases, some posturing coming from both sides and, at worst, the risk of miscalculations on either part.
  Thus, the House speaker, John Boehner, has told Republican lawmakers in a conference call that they need to provide a positive signal on a plan to avert default before Asian markets open, Republican congressional aides have said, according to Bloomberg News…. – Share Cast, 7-24-11
• As deadline looms, Congress scrambles for debt limit deal: Despite ongoing efforts by congressional leaders to hammer out a deal on Sunday for raising the debt ceiling, all indications suggest that the two parties remain far apart on a viable bipartisan agreement just hours before the opening of the Asian financial markets.
  House Speaker John Boehner, who abandoned debt negotiations with the president on Friday, says he is working on the framework for a new deficit reduction proposal, which he hopes to unveil on Sunday. But his proposal is expected to include a two-part plan, with two debt limit increases – and Democrats have repeatedly vowed to fight a short-term package.
  Nevertheless, Boehner pledged on Sunday to move forward with a his proposal regardless of Democratic opposition. “The preferable path would be a bipartisan plan that involves all the leaders, but it is too early to decide whether that’s possible,” he said in an appearance on “Fox News Sunday.” “If that’s not possible, I and my Republican colleagues in the House are prepared to move on our own.”
  Boehner’s $3-4 trillion proposal is expected to include a short-term increase in the debt limit paired with cuts of equal or greater size, along with an agreement to increase the limit again later on – on that occasion paired with spending reforms. Entitlements and mandatory spending would be targeted for reforms and savings, which would be identified either by a commission or by congressional committees…. – BS News, 7-24-11
• Geithner Calls Two-Stage Rise of Debt Ceiling ‘Nonstarter’: U.S. Treasury Secretary Timothy Geithner said the latest “two-stage” proposal being considered by Republicans to lift the federal debt ceiling is a non-starter because it can’t garner enough Democratic support to pass Congress.
  Mr. Geithner, speaking on CNN’s “State of the Union,” said the GOP idea would be just a short-term solution to the current budget impasse and that President Barack Obama’s “preference, still” is to reach a bigger agreement to reduce the budget deficit and raise the government’s $14.29 trillion borrowing limit through 2012.
  The president is still in talks with House Speaker John Boehner (R., Ohio) over how to lift the debt cap in time to avoid a government default, Mr. Geithner said.
  The latest Republican proposal would raise the debt limit in two phases, with a smaller increase of about $1 trillion immediately, which would carry the government through the end of this year, matched by a similar amount of spending cuts. The second increase would depend on a deficit-reduction commission’s recommendations.
  The commission would recommend a set of changes to safety-net programs and a tax overhaul in hopes of closing the deficit by as much as another $3 trillion. Once that package was adopted, the debt ceiling would be raised again in January 2012…. – WSJ, 7-24-11
• The 14th Amendment, the Debt Ceiling and a Way Out: A few days ago, former President Bill Clinton identified a constitutional escape hatch should President Obama and Congress fail to come to terms on a deficit reduction plan before the government hits its borrowing ceiling. He pointed to an obscure provision in the 14th Amendment, saying he would unilaterally invoke it “without hesitation” to raise the debt ceiling “and force the courts to stop me.”
  On Friday, Mr. Obama rejected the idea, though not in categorical terms. “I have talked to my lawyers,” Mr. Obama said. “They are not persuaded that that is a winning argument.”
  Another element of uncertainty and possible court battles do not seem to appeal to the White House, and it is, in any event, not clear that the nation’s creditors would continue to lend it money were the president to take unilateral action. The provision in question, Section 4 of the amendment, was meant to ensure the payment of Union debts after the Civil War and to disavow Confederate ones. But it was written in broader terms.
  “The validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion,” the critical sentence says, “shall not be questioned.”
  The Supreme Court has said in passing that those words have outlived the historical moment that gave rise to them….. – NYT, 7-24-11
• US House Speaker Boehner: last offer still on table: “The preferable path would be a bipartisan plan that involves all the leaders, but it is too early to decide whether that’s possible,” Boehner said on Fox News Sunday. “If that’s not possible, I and my Republican colleagues in the House are prepared to move on our own…. There is going to be a two-stage process. It is not physically possible to do all of this in one step.”
  Boehner said his offer that included some $800 billion in new tax revenue and massive spending cuts was never withdrawn. That plan was dubbed the “grand bargain” despite his decision to walk away from negotiations with Obama last week.
  “I don’t know, it may be pretty hard to put Humpty Dumpty back together again. My last offer is still out there. I’ve never taken my last offer off the table,” Boehner said, noting that the White House never has agreed to it. At the moment, however, Boehner said that the better path was working with his congressional colleagues “to put together a process” that is do-able…. – Reuters, 7-24-11
• Democrats cool to Boehner’s two-step debt-ceiling plan: House Speaker John Boehner said he is still trying to unveil a bipartisan debt limit deal this afternoon, but acknowledged he doesn’t have Democrats onboard with a two-step proposal he has offered. “We’re not there yet,” the Republican said in a morning interview on “Fox News Sunday.”
  Boehner and Democrats in Congress are stuck on the structure of the deficit reduction plan needed to persuade rank-and-file Republicans to raise the debt limit.
  If the limit isn’t raised by Aug. 2 the government will not be able to pay its bills. Boehner said Saturday that he wanted to announce a breakthrough in talks before the financial markets opened in Asia on Sunday.
  As talks with congressional Democrats appeared stalled, both Boehner and Treasury Secretary Timothy Geithner appeared to open the door to resuming direct discussions with the WH. The speaker pulled out those talks on Friday. Asked if that so-called “grand bargain” was dead, Boehner said, “It may be pretty hard to put Humpty Dumpty back together again,” he said. “My last offer is still out there.”
  The comments came as congressional Democrats appear to have drawn a hard line against two-step process Republicans are pushing…. – LAT, 7-24-11
• Obama, lawmakers scramble to salvage US debt deal:
  

  Congress drafting legislation, wants plan by Monday
  Treasury out of money on Aug. 2; AAA rating at risk
  Default would raise interest rates, hit global growth
  Congress aims to show progress before Asian markets open

  Scolded by President Barack Obama, Congress scrambled on Saturday to produce a deficit plan within 48 hours that keeps the United States from a catastrophic debt default now days away.
  A day after talks collapsed in acrimony, Obama held an emergency meeting with congressional leaders at the White House and told them to find areas of agreement.
  Their goal: Seal a deficit-reduction package of spending cuts and perhaps tax increases that will allow a vote by the Aug. 2 deadline to raise the U.S. debt ceiling beyond $14.3 trillion and avoid economic calamity.
  A Republican leadership aide said lawmakers are working on a plan for $3 trillion to $4 trillion in savings over 10 years, but another high-ranking Republican official said no numbers had been settled. Republican leaders want “to show progress” by 4 p.m. EDT (2000 GMT) on Sunday, the aide said…. – Reuters, 7-24-11

• Republicans Weigh Short-Term Debt Deal, Risking Obama Veto: Republicans prepared to force action on a shorter-term extension of the U.S. debt limit than President Barack Obama has requested, defying a veto threat amid warnings that continued stalemate risks roiling financial markets as soon as tonight.
  The president would veto a measure to raise the debt ceiling if it doesn’t extend the limit into 2013, White House Chief of Staff Bill Daley said in an interview on NBC’s “Meet the Press.” Daley warned that “markets around the world” would react negatively to a short-term measure offering less than $2.4 trillion in borrowing authority. “We’ve got to get past this debt-ceiling vote,” Daley said. “It’s time to get some certainty.”
  House Speaker John Boehner, an Ohio Republican, said while he’d prefer a compromise package, his party was “prepared to move on our own” if that proved impossible. He aims to announce a framework — bipartisan or not — later today to try to minimize uncertainty before Asian markets open, he said on Fox News. Boehner scheduled a 4:30 p.m. conference call with Republicans…. – Bloomberg, 7-24-11
• Boehner tells GOP he will unveil new debt strategy: Congressional leaders raced Saturday to develop a new strategy for raising the federal debt limit that House Speaker John A. Boehner told his troops would include an ambitious plan to reduce future borrowing by as much as $4 trillion.
  Although his talks with President Obama over a “grand bargain” to restrain the national debt collapsed in acrimony Friday, Boehner (Ohio) said he is confident lawmakers will avert a historic U.S. default — a possibility just 10 days off.
  “Over this weekend, Congress will forge a responsible path forward,” Boehner said in a statement.
  The speaker and other leaders started their day at the White House, where Treasury Secretary Timothy F. Geithner warned of possible trouble in the markets if policymakers don’t announce a viable plan for raising the debt limit before Asian exchanges open Sunday evening, according to people familiar with the meeting. Aides said Geithner’s warning lent fresh urgency to the negotiations, which continued throughout the day on Capitol Hill.
  By early evening, the outlines of a two-stage strategy were emerging. First, lawmakers would vote on a package to cut agency spending by as much as $1 trillion over the next decade and raise the debt limit, currently set at $14.3 trillion, by the same amount. That would give Geithner enough borrowing authority to cover the nation’s bills through the end of this year…. – WaPo, 7-23-11

JULY 23, 2011: OBAMA MEETS WITH CONGRESSIONAL LEADERS AT THE WHITE HOUSE — NO DEAL IN SIGHT

Boehner tells GOP he plans to unveil new debt strategy within 24 hours: House Speaker John A. Boehner (R-Ohio) told his troops Saturday that he hopes to roll out a two-step strategy within the next 24 hours for raising the federal debt limit and restraining the national debt to avoid roiling Asian financial markets when they open Sunday, according to a participant in the conference call.
In the call with his House GOP colleagues, Boehner said he still hopes to slice as much as $4 trillion out of the federal budget over the next decade, despite the collapse of talks with President Obama on Friday over a bipartisan “grand bargain” to reduce the government’s spiraling debt…. –

• President Barack Obama’s Weekly Address: A Bipartisan Approach to Strengthening the Economy — WH, 7-23-11
• Rep. Jeb Hensarling (R-TX) Delivers the Weekly Republican Address (VIDEO) — GOP, 7-23-11“I’ve been left at the altar now a couple of times. And I think that one of the questions that the Republican Party is going to have to ask itself is, Can they say yes to anything?” — President Barack Obama“The President wanted to know that there was a plan for preventing national default. The bipartisan leadership in Congress is committed to working on new legislation that will prevent default while substantially reducing Washington spending.” — Senate Republican Leader Mitch McConnell“Congress should refrain from playing reckless political games with our economy. Instead, it should be responsible and do its job, avoiding default and cutting the deficit.” — White House Press Secretary Jay Carney

  “This debate boils down to a simple choice. We can come together for the good of the country and reach a compromise or we can issue insults and demands and ultimatums at each other, withdraw to partisan corners, and achieve nothing. We know the right thing to do, and we know what the American people expect us to do.” — President Barack Obama in the July 23, 2011 Weekly Address

  “Our government has gotten so big, so expensive, it’s keeping our economy from recovering as it should. If we’re going to avoid any type of default and downgrade, if we’re going to resume job creation in America, the president and his allies need to listen to the people and work with Republicans to cut up the credit cards once and for all.” — House GOP Conference Chair Jeb Hensarling

  Obama/Boehner Talk Kicks Off With Light Banter: “I think everybody agrees it’s too hot to play golf today,” Obama told Boehner….
  Boehner responded to the president saying, “Yeah, I took a walk there this morning.” — ABC News, 7-23-11

  Giuliani: Obama Is Afraid to Lead on Budget: “If we default, 90 percent of the responsibility is on the president of the United States,” Giuliani told Sean Hannity on Fox News after a visit to New Hampshire that fueled speculation the he would seek the GOP nomination for president. “He is yet to outline a plan because he’s too darn afraid that he’s going to have to pay political [consequences]. And he’s pretending he wants to do all these big cuts; we know he doesn’t want to do cuts . . . He wants to do the minimum number of cuts and the maximum tax increases.”
  “I don’t want to do this just to run, I want to do it only because I have the best chance of winning,” he said. “And if I think someone else has a better chance of winning, I don’t want to spoil their chances.”
  “My objective is we cannot have President Obama after the next year,” he said. “I mean, look at what he’s put us through with this whole debt thing, and this because a president doesn’t lead. I mean, Republicans, Democrats fight with each other in the House, and the president has never outlined how he would do it . . . This is outrageous!”… – Newsmax, 7-23-11

• Obama and congressional leaders hold grim Saturday meeting on debt crisis: President Obama convened an unusual Saturday meeting with Congressional leaders on the looming government default. The session lasted less than an hour, and the atmospherics appeared grim…. – CS Monitor, 7-23-11
• Debt crisis: Deal sought to head off stock plunge: Precariously short of time, congressional leaders struggled in urgent, weekend-long talks to avert an unprecedented government default, desperate to show enough progress to head off a plunge in stock prices when Asian markets open ahead of the U.S. workweek.
  President Barack Obama met Saturday with Republican and Democratic leaders — but only briefly— the day after House Speaker John Boehner abruptly broke off his own once-promising compromise talks with the White House. Staff members kept up detailed efforts.
  The goal now is to produce at least a framework agreement to raise the nation’s debt limit by Monday, congressional officials said. Even that would allow scarcely enough time for the House and Senate to clear legislation in time for Obama’s signature by the Aug. 2 deadline, a week from Tuesday.
  House Speaker John Boehner told rank-and-file Republicans in a conference call after Saturday’s meeting that he hoped to be able to announce a “viable framework for progress” by 4 p.m. EDT on Sunday, before the stock markets open in Japan and elsewhere in Asia, according to two participants.
  Lawmakers fear a big drop in investor confidence in U.S. stocks and bonds could start in Asia and sweep toward Europe and the Americas, causing U.S. stock values to plunge on Monday…. – AP, 7-23-11
• Congress Looks For New Debt Deal To Prevent Monday Panic: Lawmakers and President Barack Obama met at the White House Saturday, once again looking to renew talks to raise the debt limit and lower the deficit after a highly public breakdown.
  The tense scene in the Cabinet Room was described by the pool reporter as “a school principal’s office with a handful of sullen suspects sitting grimly downcast as the boss says: ‘OK, we’re going to sit here all day until I find out who shot that spitball.’”
  But a marathon session to iron out a deal before the end of the weekend it wasn’t — lasting just 50 minutes — and all signs point to a continued stalemate after Friday’s surprising events.
  An agreement that seemed within reach to Obama on Thursday was left on the table Friday by Speaker of the House John Boehner, spurring hours of recriminations over who killed the deal.
  In an hastily called press conference, Obama angrily claimed he had been “left at the altar” by Boehner for the second time in as many weeks. Boehner responded, accusing Obama of demanding new taxes at the last minute and saying “the White House moved the goalposts.”
  Both leaders made themselves vulnerable in the negotiations — Obama accepting cuts to entitlements that already were inflaming his base, and Boehner agreeing to $800 billion in revenue increases — and moved quickly to blame the other for failing to agree to a historic deficit reduction package.
  Obama appeared to be holding out hope Friday night that his deal with Boehner could be resurrected in some form, with an administration official saying “this offer is still available.”
  But according to congressional aides, Boehner insists negotiations resume anew in Congress on a plan with spending cuts and few, if any, revenue increases — and without Obama. Additionally, they are drafting the so-called “last ditch” plan put forth by Senate Minority Leader Mitch McConnell and Senate Majority Leader Harry Reid to allow Obama to unilaterally raise the debt limit, to be taken up if all else fails….. – Business Insider, 7-23-11
• Debt crisis and market worries: Quick deficit-deal framework sought to head off stock sell-off: Precariously short of time, congressional leaders struggled in urgent, weekend-long talks to avert an unprecedented government default, desperate to show enough progress to head off a plunge in stock prices when Asian markets open ahead of the U.S. workweek. With the White House consigned to the periphery of negotiations, Republicans sought as much as $4 trillion in deficit cuts over a decade as a condition for raising the nation’s debt limit.
  But after hours of staff negotiations followed by a meeting of Congress’ top four leaders, Senate Majority Leader Harry Reid accused GOP leaders of intransigence, adding he would not accept anything less than a deal that raised the debt limit through 2012. “Their unwillingness to compromise is pushing us to the brink of a default on the full faith and credit of the United States. We have run out of time for politics. Now is the time for cooperation,” he said in a sharply worded statement.
  A spokesman for House Speaker John Boehner, Michael Steel, responded mildly. “Like the President and the entire bipartisan, bicameral Congressional leadership, we continue to believe that defaulting on the full faith and credit of the United States is not an option,” he said in a written statement.
  Obama met earlier in the day with the Republican and Democratic leaders — but only briefly— the day after Boehner abruptly broke off his own once-promising compromise talks with the White House…. – WaPo, 7-23-11
• White House says Obama wants long-term debt solution to protect US economy: The White House says President Barack Obama won’t accept a short-term extension of the nation’s debt limit because it would do more harm than good.
  Obama met with congressional leaders at the White House on Saturday for about an hour. In a written statement afterward, his spokesman said a temporary extension could hurt the U.S. credit rating and force Americans to pay higher interest rates on credit cards and other consumer debt. The White House said Congress shouldn’t be playing “reckless political games” with the economy.
  Obama wants a debt-ceiling extension that will last through the end of 2012. Republicans have talked of a shorter extension…. – AP, 7-23-11
• Obama, congressional leaders gather at White House to try to save debt deal: Ahead of the Saturday talks, a House GOP aide signaled that the speaker’s most likely position would be to push for a shorter-term deal. Both sides have identified more than $1 trillion in cuts, and Boehner’s camp suggested that some of those reductions could be used to meet the Republican demand of lifting the debt ceiling by cutting more than the dollar value of that increase in borrowing authority.
  The president has repeatedly objected to any short-term deal, calling it “kicking the can down the road,” because there is a likelihood that the two sides would reach the same gridlock next year once such an extension was set to expire, and he did so again on Friday. But on Saturday morning, the GOP aide said Obama was just trying to avoid dealing with the issue next year, when he will face reelection.
  “Now, we do not know what size or shape a final package will take, but it would be terribly unfortunate if the president was willing to veto a debt-limit increase simply because its timing would not be ideal for his reelection campaign. “We want the most significant deficit-reduction possible, but linking the full faith and credit of the United States to presidential campaign politics is not a defensible position,” the aide added, speaking on the condition of anonymity to discuss Boehner’s strategy…. – WaPo, 7-23-11
• Fight over raising the debt ceiling almost sure to lead to bad policy: It’s quite likely that any deal reached by lawmakers to stave off default is going to involve compromises that were unthinkable even a few short weeks ago…. – LAT, 7-23-11
• Obama Calls For Leaders To Work Together On Debt ‘Neither Party Is Blameless,’ President Says: President Barack Obama called on Democratic and Republican leaders to come together and do “the right thing” to resolve the nation’s debt crisis Saturday in his weekly address.
  He warned that unless an agreement is reached to raise the amount of money the federal government is allowed to borrow, debt will “weaken our economy, cause higher interest rates for families, and force us to scale back things like education and Medicare.”
  The president summoned congressional leaders to the White House Saturday after House Speaker John Boehner announced Friday night he was pulling out of the debt-ceiling negotiations with the Obama administration.
  “Neither party is blameless,” Obama said of the nation’s debt. “Both parties have a responsibility to do something about it.” Envisioning a way forward, the president said, “We need to put aside our differences to do what’s right for the country. Everyone is going to have to be willing to compromise. Otherwise, we’ll never get anything done.” Obama advocated a “balanced approach” to cutting the deficit that “goes after waste” and “makes some serious cuts to worthy programs” that wouldn’t be made “under normal circumstances.”… – CNN, 7-23-11
• Obama’s Weekly Address: There’s Still Time to Compromise on the Deficit: In a message that may be too little too late, President Obama used his weekly address to issue an urgent plea to Congress to compromise on a deal to raise the debt ceiling and reduce the deficit.
  The morning after a deal to reduce the deficit broke down, Obama outlined his case for “a balanced approach to cutting the deficit” through spending cuts and revenue increases.
  “We need an approach that goes after waste in the budget and gets rid of pet projects that cost billions of dollars,” Obama said. “We need an approach that makes some serious cuts to worthy programs – cuts I wouldn’t make under normal circumstances. And we need an approach that asks everybody to do their part.”
  “There will be plenty of haggling over the details in the days ahead. But this debate boils down to a simple choice,” he said. “We can come together for the good of the country and reach a compromise; we can strengthen our economy and leave for our children a more secure future.
  “Or we can issue insults and demands and ultimatums at each another, withdraw to our partisan corners, and achieve nothing,” he said. “Well, we know the right thing to do. And we know what the American people expect us to do.”… – ABC News, 7-23-11
• Debt Ceiling Talks Collapse as Boehner Walks Out: ….Republicans, though, said that the White House pushed for more revenue midway through the talks. “The White House moved the goal posts,” Mr. Boehner said in a news conference.
  In his weekly radio address on Saturday, Mr. Obama continued to press the idea that it was “not right to ask middle class families to pay more for college before we ask the biggest corporations to pay their fair share of taxes.” “This debate boils down to a simple choice,” the president said. We can come together for the good of the country and reach a compromise; we can strengthen our economy and leave for our children a more secure future. Or we can issue insults and demands and ultimatums at each another, withdraw to our partisan corners, and achieve nothing.”
  Representative Jeb Hensarling, Republican of Texas, pressed the idea that the deficit and government spending need to come down to help create jobs and bolster the economy. “If we’re going to avoid any type of default and downgrade — if we’re going to resume job creation in America _ the president and his allies need to listen to the people and work with Republicans to cut up the credit cards once and for all,” Mr. Hensarling said.
  This time, however, Mr. Obama had also faced a firestorm from within his party, because of the spending cuts he was considering with Mr. Boehner. NYT, 7-23-11
• What Obama said in his 30-minute primal scream at the GOP: President Obama, clearly angry, let loose on House Republicans in what was, for him, an extraordinary fit of pique Friday night after talks with Speaker John Boehner broke down…. – CS Monitor, 7-23-11
• Failure to reach a ‘grand bargain’ on debt makes 2012 harder for Obama: Sometime this spring, President Barack Obama shifted course on the budget and started pursuing a “Big Deal” to dramatically curb runaway deficits. On Friday chances for that deal disappeared, and with it perhaps his last chance to fundamentally change the course of the 2012 elections.
  Even a multitrillion-dollar package of spending cuts and tax increases would not have stopped the red ink. At best, the grand bargain being sought would have shaved about $4 trillion from deficits expected to total at least $8 trillion over the next 10 years. But it could have changed the storyline of the nation’s politics, if not its government. Obama would have been able to run for a second term claiming bipartisan success at fiscal restraint, a boast he hoped would help erase or at least blur the image of him as a tax-and-spend liberal.
  Instead, the apparent failure of Obama and congressional leaders to reach a big deal likely means the stage is largely set for the pivotal 2012 elections. The two major parties are unable to agree on how much government people want and who should pay for it. Voters – who went for Obama and the Democrats in 2008 and for the Republicans in 2010 – will have to decide between two rival visions of government.
  For Obama, who as the incumbent will be the centerpiece of the campaign, the big deal was something he came to cherish after first ignoring it…. – McClatchy Newspapers, 7-23-11
• Deficit negotiations: Myths and realities: For the better part of 2011, President Barack Obama and House Speaker John Boehner (R-Ohio) have been talking hypothetically — each from his own ideological perspective — about the potential fallout of their inability to reach a debt ceiling, deficit-cutting plan. The implications of their inability to get some deal done are about to become terrifyingly concrete — in the form of Monday’s skittish market opening and a potentially costly credit downgrade that will hike the price of everything from government borrowing to home mortgages. But that hasn’t stopped the spinning and posturing as each side seeks the most advantageous deal possible while selling the American public on the argument that it’s the other guy who is pushing the country over the abyss.
  With that in mind, here’s a guide to the reality behind the spin in the debt ceiling battle:
  Myth: Obama wins politically, no matter what happens…. Reality: That may have been true a week ago, but it’s less of a sure thing now.
  Myth: The talks collapsed over Obama’s demand for $400 billion more in revenue over 10 years…. Reality: Boehner didn’t have the votes.
  Myth: Obama could sell his end of the bargain to Democrats…. Reality: He probably could have.
  Myth: The GOP owns the deficit-reduction debate…. Reality: Bye-bye high ground.
  Myth: There are three branches of government…. Reality: Grover Norquist seems to have opened a fourth. And he says the McConnell-Reid compromise is the way to go, so don’t bet against everybody’s least favorite fallback. – Politico, 7-23-11
• What’s Happened to Obama?: Scarcely a week goes by without one of the big three liberal economists — Paul Krugman, Robert Reich, and Joseph Stiglitz — lambasting the president. Recently New York Times columnist Krugman lamented that Obama’s campaign slogan “Yes, we can” had become “No, we won’t.”…
  What happened? Frank Rich complains about Obama’s “passivity.” Others grumble the supposedly great communicator has failed to control the political narrative — as is currently the case where the discussion in Washington centers on the Republican theme, “reduce the deficit,” when it should be on “increase the number of good jobs.” Writing in the New York Review, Yale Professor David Bromwich observed, “Obama has always preferred the symbolic authority of the grand utterance to the actual authority of a directed policy… protracted moods of extreme abstraction seem to alternate with spasmodic engagement.”
  Not surprisingly, there’s recently been a spate of articles “psychoanalyzing” the president. Writing in the New Yorker, George Packer observed that Obama “takes responsibility as an end in itself.” In his blog, Packer explained, “there something in Obama’s character that needs to be seen as reasonable — as the one grown-up — in the room — and that is deeper than any partisan policy views he might hold.”…. – Huff Post, 7-23-11

JULY 22, 2011: DEBT TALKS BREAK DOWN, BOEHNER WALKS AWAY FROM OBAMA AND WHITE HOUSE NEGOTIATIONS

Boehner blames Obama for collapse of debt talks: House Speaker John Boehner said the White House “moved the goal posts” by demanding an additional $400 billion in revenue during talks over a deal to avoid default. He said he was confident the U.S. will not default but said the White House has “refused to get serious” about spending cuts. “Dealing with the White House is like dealing with a bowl of Jell-O,” Boehner said.

Obama says Boehner “walked away” from debt talks: President Obama said House Speaker John A. Boehner broke off talks over crafting a “big deal” that would avert a federal default. He called the deal the White House was offering “extraordinarily fair” and said that “if it was unbalanced it was unbalanced in the direction of not enough revenue.”
The president said he was summoning congressional leaders to the White House Saturday morning at 11 a.m. “We have run out of time and they are going to have to explain to me how it is that we are going to avoid default,” he said.

Talks in the effort to avert a government default have collapsed, GOP aides say: Negotiations between the White House and House Speaker John Boehner over an agreement to cut spending, overhaul the tax code and avert a government default have broken down, according to senior House Republican aides. Boehner planned to notify his caucus Friday night.

“In the end, we couldn’t connect. Not because of different personalities, but because of different visions for our country.” — House Speaker John Boehner

“This was an extraordinarily fair deal. If it was unbalanced, it was unbalanced in the direction of not enough revenue. It is hard to understand why Speaker Boehner would walk away from this kind of deal.” — President Barack Obama

McConnell Statement on Debt Talks: U.S. Senate Republican Leader Mitch McConnell made the following statement Friday regarding the announcement that Speaker Boehner will work with the Senate Leadership on deficit reduction legislation:
“It’s disappointing that the talks with the White House did not reach a favorable conclusion, and I appreciate the Speaker insisting on reduced spending and opposing the President’s call for higher taxes on American families and job creators. It is similarly disappointing that the White House has refused to join Republicans in our effort to cut Washington spending now, cap runaway spending in the future and save our entitlement programs and our country from bankruptcy by requiring the nation to balance its budget. Speaker Boehner has informed us that he will work on a new path forward with Leader Reid to develop a solution that will prevent default, without job killing tax hikes, while substantially reducing Washington spending.
“As I’ve said before, it’s time now for the debate to move out of a room in the White House and on to the House and Senate floors where we can debate the best approach to reducing the nation’s unsustainable debt.”

• Boehner confident government won’t default: Speaking Friday evening after withdrawing from talks on a “grand bargain” for $4 trillion or so in deficit cuts over the coming decade, Boehner said Congress will have to step in to forge an agreement to lift the government’s borrowing cap.
  “We can work together here on Capitol Hill to forge an agreement and I’m hopeful the president will work with us,” Boehner said.
  Boehner accused Obama of “moving the goal posts” by demanding $400 billion in tax increases on top of about $800 billion in revenues that would have been reaped through a comprehensive rewrite of the tax code.
  “There was an agreement with the White House at $800 billion in revenue. It’s the president who walked away from his agreement and demanded more money at the last minute,” Boehner said. “And the only way to get that extra revenue was to raise taxes.” AP, 7-22-11
• Debt talks break down; “We have run out of time”: “We have run out of time,” Mr. Obama said in acknowledging the breakdown.
  “It is hard to understand why Speaker Boehner would walk away from this kind of deal and frankly, if you look at the commentary out there, there are a lot of Republicans that are puzzled as to why it couldn’t get done,” he said. “In fact, there are a lot of Republican voters out there who are puzzled as to why it couldn’t get done.”
  Mr. Obama at one point suggested he “couldn’t get a phone call returned” from Boehner earlier in the day, and said that when it comes to a deal, “I’ve been left at the altar now a couple of times.” He said he was unable to guarantee that Social Security checks and other obligations would go out after the August 2 deadline, and said the blame falls on House Republicans who have been unwilling to compromise to get a deal done.
  Mr. Obama said he was calling Congressional leaders to the White House Saturday morning at 11:00 “to explain to me how we are going to avoid default,” acknowledging that discussions were basically back to square one.
  “What this came down to is there doesn’t seem to be a capacity for them to say yes,” Mr. Obama said.
  “I think the challenge really has to do with the seeming inability, particularly in the House of Representatives, to arrive at any kind of position that compromises any of their ideological preferences,” he said. “None. And you’ve heard it. I’m not making this up. I think there are a number of members of that caucus that have been very clear about that.”
  Asked what he would say to calm skittish markets, Mr. Obama said, “I remain confident that we will get an extension of the debt limit and we will not default,” but he was less confident that the GOP will step up and deal with underlying debt and deficits “in a way that is fair.” He said he would be willing to sign a debt limit increase that did not include deficit reduction measures if presented such a bill by Congress.
  The president acknowledged that the Democratic leadership in Congress had not signed off on the proposed deal. He said, however, that both he and the leadership “were willing to engage in serious negotiations despite a lot of heat from a lot of interest groups around the country in order to make sure that we actually dealt with this problem.”
  The proposed cuts to entitlements had angered many Democrats and interest groups, and in announcing that he had offered $650 million in cuts on that front over ten years, Mr. Obama said, “We believed that it was possible to shape those in a way that preserved the integrity of the system, made them available for the next generation and did not affect current beneficiaries in an adverse way.”
  “I was willing to try to persuade Democratic leadership as well as Democratic members of Congress that even a deal that is not as balanced as I think it should be, is better than no deal at all,” he said. “And I was willing to persuade Democrats that getting a handle on debt and deficit reduction is important to Democrats just as much as it’s important to Republicans. And frankly a lot of Democrats were persuaded by that.”… – CBS News, 7-22-11
• Boehner abruptly withdraws from talks with Obama: House Speaker John Boehner abruptly broke off talks with President Barack Obama Friday night on a deal to cut federal spending and avert a threatened government default, sending compromise efforts into an instant crisis.
  Within minutes, an obviously peeved Obama virtually ordered congressional leaders to the White House for a Saturday meeting on raising the nation’s debt limit. “We’ve got to get it done. It is not an option not to do it,” he declared.
  For the first time since negotiations began, he declined to offer assurances, when asked, that default would be avoided. Moments later, however, he said he was confident of that outcome.
  At a news conference of his own a short while later, Boehner said, “I want to be entirely clear. No one wants default.”
  In a letter circulated earlier to the House Republican rank and file, said he had withdrawn from the talks with Obama because “in the end, we couldn’t connect.”
  He said the president wanted to raise taxes, and was reluctant to agree to cuts in benefit programs…. – AP, 7-22-11
• Debt Ceiling Talks Collapse as Boehner Walks Out: An angry and frustrated President Obama accused Republican leaders on Friday night of walking away from “an extraordinarily fair deal” to raise the nation’s debt limit.
  In a hastily called news conference at the White house, a grim-faced Mr. Obama demanded that congressional leaders appear at the White House on Saturday.
  “I want them here at 11 a.m. tomorrow,” Mr. Obama told reporters. “They are going to have to explain to me how it is that we are going to avoid default.”
  The president spoke moments after House Speaker John A. Boehner, the Republican from Ohio, released a letter that he had sent to House colleagues, saying he was breaking off the budget negotiations because of differences over revenues and would instead try to strike an agreement with Senate leaders to raise the debt limit by Aug 2 and avoid sending the government into a potential default.
  “In the end, we couldn’t connect,” Mr. Boehner said. “Not because of different personalities, but because of different visions for our country.”
  In his comments, Mr. Obama described a deal of spending cuts that he said was more generous than what the so-called Gang of Six had offered and said it was “hard to understand” why Mr. Boehner would walk away…. – NYT, 7-22-11
• Boehner calls off debt talks with Obama: House Speaker John Boehner told President Obama tonight he is pulling out of debt negotiations to work directly with the Senate about a fall-back plan to lift the nation’s $14.3 trillion debt ceiling by the Aug. 2 deadline.
  In response, Obama said he is summoning House and Senate leaders to the White House Saturday morning “to explain to me how we are going to avoid default.” “We are running out of time,” Obama said.
  The Treasury Department has said that if the debt ceiling is not lifted by Aug. 2 — a week from Tuesday — it will lose borrowing authority to pay the government’s bills and face default…. – USA Today, 7-22-11
• Obama scolds GOP as debt talks break down: ‘Where’s the leadership?’: In an unusual display of emotion, President Obama angrily responded to House Speaker John A. Boehner’s abrupt withdrawal from talks on a debt ceiling increase, and summoned congressional leaders to the White House on Saturday for emergency talks to plot a new course before the Aug. 2 deadline.
  “We have run out of time,” the president said in a hastily-called news briefing, just moments after Boehner informed him of his decision.
  On Thursday, Obama and Boehner appeared to be closing in on a deal that would have raised the debt ceiling through 2013, combined with spending cuts and entitlement reforms to achieve $3 trillion in deficit reduction.
  But talks apparently broke down in a dispute over taxes. Obama, prodded by Democrats, insisted that any deal include new revenues in addition to spending cuts…. – LAT, 7-22-11
• Boehner Pulls Out of Debt Talks: House Speaker John Boehner (R., Ohio) has decided to no longer pursue a major deficit-reduction deal with the White House and informed President Barack Obama of his decision Friday night, House Republican leadership aides said late Friday.
  “In the end we couldn’t connect. Not because of different personalities, but because of different visions for our country,” Mr. Boehner wrote in a letter to his colleagues. “I have decided to end discussions with the White House and begin conversations with the Senate in an effort to find a path forward.”
  The speaker’s office reached out to Senate leaders Friday to begin to figure out what the path forward is, Republican officials said. House and Senate negotiators will hold talks through the weekend to try to determine what kind of agreement they could reach to raise the government’s debt ceiling by Aug. 2 and prevent a government default.
  Senior Republican aides said they didn’t know what shape a deal would ultimately take, but they said they needed to present House members with an agreement by Monday to have time to pass legislation in both chambers by Aug. 2.
  “We know we have a short window of time here,” a senior Republican aide said.
  After a series of discussions between administration officials and the House leadership, it became clear, the GOP aides said, that the White House and Congress’s interests were not aligned…. – WSJ, 7-22-11
• John Boehner walks away from debt talks: House Speaker John Boehner has walked away from negotiations with President Obama over a deal to raise the debt limit.
  “In the end, we couldn’t connect. Not because of different personalities, but because of different visions for our country,” Boehner said in a letter to colleagues. He said Mr. Obama ” is emphatic that taxes have to be raised” and “adamant that we cannot make fundamental changes to our entitlement programs.”
  “For these reasons, I have decided to end discussions with the White House and begin conversations with the leaders of the Senate in an effort to find a path forward,” he said. (Read the letter here)
  House Republican leadership aides told CBS News that Boehner will work with the Senate leadership in an attempt to reach a deal that meets the GOP’s two central requirements: That spending cuts are equal to or greater than debt limit increase and that there are no new taxes…. – CBS New, 7-22-11
• Obama-Boehner talks collapse; each side blames the other: Debt-reduction negotiations between President Obama and House Speaker John A. Boehner collapsed Friday, derailing an effort to reach a landmark agreement to cut spending, overhaul the tax code and avert a government default.
  In subsequent statements, both sides blamed the other for an impasse that threatens to plunge the nation into a fiscal crisis if the government fails to meet a looming deadline to raise the federal debt ceiling.
  Announcing the collapse, Boehner (R-Ohio) said he could not overcome disputes with Obama on taxes and entitlements.
  Appearing before reporters at the White House, Obama said he had been willing to agree to a deal that was more generous to Republican interests than to those of his fellow Democrats. “It’s hard to understand why Speaker Boehner would walk away from this kind of deal,” he said. “The vast majority of the American people believe we should have a balanced approach” between revenues and cuts.
  Saying that “we have now run out of time,” Obama summoned Boehner, House Minority Leader Nancy Pelosi (D-Calif.), Senate Majority Leader Harry M. Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) to the White House at 11 a.m. Saturday.
  “They’re going to have to explain to me how it is that we are going to avoid a default,” he said. He later said he was confident that a default could be avoided…. – WSJ, 7-22-11
• Obama allows for possibility of default, saying ‘if’ instead of expressing confidence US won’t: President Barack Obama for the first time has allowed for the possibility that the U.S. may default on its financial obligations.
  At a hastily arranged White House appearance on Friday, Obama said: “If we default, then we’re going to have to make adjustments.”
  But minutes later, the president said he remained confident that the debt limit will be extended. Said Obama: “We will not default. I am confident of that.”… – Washingtn Post, 7-22-11
• Debt talks break down; Volatility ahead: Shortly before the latest bust up in Washington, Kathy Lien Director, Global Research & Analysis at GFT wrote:
  

  Barack Obama’s Presidency and his chance of reelection could very well be defined by what happens over the next week. If the Senate fails to raise the debt ceiling either temporarily or permanently, panic selling of U.S. dollars could drive the greenback to fresh lows against all of the major currencies. The weakness of USD/JPY and USD/CHF confirms that investors are worried about the developments or the lack thereof in the coming week.

  Ultimately there are three scenarios, according to Lien:

  Scenario 1 – Watered Down Debt Deal Passed – Very Dollar Bullish Scenario 2 – Temporary Increase to Debt Ceiling – Mildly Dollar Bullish Scenario 3 – Throw Up their Hands and Let the U.S. Default – Very Dollar Bearish

  For not it appears we’ve moved closer to scenario 2…. – CBS Market Watch, 7-22-11

JULY 22, 2011: DEBT DEAL DEADLINE — OBAMA HOLDS TOWN HALL ON DEBT CRISIS — SENATE VOTES DOWN CUT, CAP, AND BALANCE

“Frankly, we are not close to an agreement. I would just suggest it is going to be a hot weekend here in Washington, D.C.” — House Speaker John Boehner

“I have talked to my lawyers. They are not persuaded that that is a winning argument. So, the challenge for me is to make sure that we do not default, but to do so in a way that is as balanced as possible and gets us at least a down payment on solving this problem.” President Obama said in response to a question about the Constitutional argument at a townhall at the University of Maryland.

“We’re going to dispose of this legislation as it needs to be, so that President Obama and the speaker can move forward on a [plan] that will have some revenue in it.” — Senate Majority Leader Harry Reid (D-Nev.)

“It’s a great opportunity for him to talk to young people, to students, about how this is really a debate about the economy and jobs and the need to stabilize the foundation of the economy and creating jobs and lessening the economic anxiety out there, felt by students.” — White House Press Secretary Jay Carney said Thursday aboutr President Obama’s Town Hall at the University of Maryland

• President Obama Discusses Debt Crisis at University of Maryland Town Hall – Transcript — WH, 7-22-11
• Obama stresses need for more tax revenue; Senate rejects House debt plan: President Obama insisted Friday that any broad deficit-reduction plan must include new tax revenue in addition to large spending cuts, and the Senate rejected a bill from the Republican-controlled House that would have required a balanced budget amendment and massive cuts, but no tax hikes.
  Speaking at a town hall meeting at the University of Maryland in College Park, Obama told a largely supportive audience, “We can’t just close our deficit with spending cuts alone.” That would mean senior citizens would have to “pay a lot more for Medicare,” students would have trouble getting education loans, job training programs would be trimmed and there were be “devastating cuts” in medical and clean-energy research, he said.
  “If we only did it with cuts, if we did not get any revenue to help close this gap . . . then a lot of ordinary people would be hurt, and the country as a whole would be hurt,” Obama said. “And that doesn’t make any sense. It’s not fair. And that’s why I’ve said, if we’re going to reduce our deficit, then the wealthiest Americans and the biggest corporations should do their part as well.”
  “This idea of balance, this idea of shared sacrifice, of a deficit plan that includes tough spending cuts but also includes tax reform that raises more revenue, this isn’t just my position,” he said. “This isn’t just a Democratic position. This isn’t some wild-eyed socialist position.” Rather, it argued, it is a position taken in the past by presidents from both parties who have signed major deficit-reduction deals.
  “So we can pass a balanced plan like this,” Obama said. “The only people we have left to convince are some folks in the House of Representatives. We’re going to keep working on that.”… – WaPO, 7-22-11
• Obama again presses GOP to move on taxes in debt deal: If President Obama is indeed pursuing a deal with House Speaker John Boehner that would lack an ironclad agreement to boost government receipts, he didn’t show his hand Friday.
  At a town-hall-style event at the University of Maryland, Obama again restated his long-standing position that any accord to raise the federal debt ceiling must combine spending cuts with revenue generators stemming from a rewrite of the tax code.
  “We can’t just close our deficit with spending cuts alone,” Obama said before a crowd in College Park, Md. “If we only do it with cuts … a lot of ordinary people would be hurt and the country as whole would be hurt.”… – LAT, 7-22-11
• Senate Rejects House Budget Plan; Obama Calls for Deal: The Senate on Friday rejected a House plan to substantially cut government spending and raise the federal debt limit contingent on a balanced budget proposal, leaving Congress up in the air about how to resolve its impasse over the federal debt ceiling and avoid a government default.
  Senators voted 51 to 46 along party lines to set aside the measure, known as the “cut, cap and balance” bill, which was sent to the Senate by the House this week and seen by conservative House members as their preferred option for increasing the debt ceiling. For many House Republicans, the legislation was their best offer in the continuing standoff with President Obama and Congressional Democrats.
  After the vote, Senator Harry Reid, the Nevada Democrat and majority leader, said the Senate was for the moment abandoning its fallback plan and would not immediately move ahead with a procedural maneuver proposed by Senator Mitch McConnell of Kentucky to increase the debt limit. He said the Senate would instead await the results of negotiations between Mr. Obama and the House speaker, John A. Boehner of Ohio, over a broad deficit reduction package.
  “The path to avert default now runs through the House of Representatives,” Mr. Reid said after Democrats voted against the House plan. He said that he was canceling plans to keep the Senate in session over the weekend and that lawmakers would instead reconvene Monday, just more than a week before the Aug. 2 deadline set by the Treasury Department for increasing the $14.3 trillion limit.
  Mr. Obama said at a town hall meeting where he was taking questions Friday morning that he was willing to agree to “historic” spending cuts in an effort to trim the nation’s budget deficit, and urged Congressional factions to come together and reach a deal. He said it was not conceivable that the United States would default on its debt.
  “This is a rare opportunity for both parties to come together and choose a path where we stop putting so much debt on our credit card,” Mr. Obama said…. – NYT, 7-22-11
• Senate votes down GOP debt ceiling plan: The Senate on Friday defeated the Republican “Cut, Cap and Balance” proposal, a move that puts the onus on President Obama and House Speaker John Boehner to present a plan soon to raise the debt ceiling or risk a potentially catastrophic default.
  The procedural vote to kill the measure that was approved by the Republican-controlled House on Tuesday was along party lines in the Democratic-controlled Senate.
  “We’re going to dispose of this legislation as it needs to be, so that President Obama and the speaker can move forward on a [plan] that will have some revenue in it,” Senate Majority Leader Harry Reid (D-Nev.) said just before the roll call began.
  Friday had been seen as a potentially critical date in the weeks-long budget debate. According to the Treasury Department, lawmakers must agree to a plan that raises the debt limit before Aug. 2 or the federal government could default on its obligations for the first time in the nation’s history…. – LAT, 7-22-11
• John Boehner: Debt talks will make for a “hot weekend here in Washington”: “It’s going to be a hot weekend here in Washington, D.C.,” House Speaker John Boehner said today.
  Nevermind that the heat index for the District on Friday is 120 degrees — lawmakers will be sweating in their Washington offices as the clock ticks down toward a possible U.S. default.
  The Senate on Friday rejected a Republican plan that would have made raising the debt ceiling contingent on passing a balanced budget amendment. Democratic leaders blasted the plan as bad policy and hardly worthy of consideration. But Boehner said today it’s still the only plan to raise the debt ceiling that he supports.
  Calling himself a “happy warrior” on behalf of the GOP plan — dubbed “cut, cap and balance” — Boehner said, “The House has done its job.” The speaker refused to acknowledge the need for an alternative plan. “If [members of the Senate] don’t like our version of ‘cut, cap and balance’… then what’s their plan?” he asked. “They can make amendments and send it back over.”… – CBS News, 7-22-11
• Boehner: ‘We are not close’ to reaching a debt deal with Obama: Speaker John Boehner (R-Ohio) on Friday assured House Republicans that he is not on the verge of striking a deal with the White House to raise the debt ceiling.
  “Frankly, we are not close to an agreement,” Boehner said. “I would just suggest it is going to be a hot weekend here in Washington, D.C.”
  Boehner told reporters there “never was an agreement” with the White House on a grand bargain.
  But he told the GOP conference that the House needs to be prepared to pass something related to the debt ceiling by next Wednesday, according to Rep. Peter King (R-N.Y.) Others in the meeting said Boehner was talking about fall-back options because it would be irresponsible not to.
  GOP members on Friday insisted the Senate should amend “Cut, Cap and Balance” and send an alternative back to the House. Boehner claimed two-thirds of the pubic supports the plan, which would cut at least $6 trillion in spending over a decade without revenue increases.
  “The House has done its job, and I hope the Senate will do theirs. And if they don’t our version of ‘Cut, Cap and Balance,’ guess what?

Debt Ceiling Showdown Recap July 6-18, 2011: Bipartisan Senate Compromise Plan Emerges — Obama Sets New Deadline for Friday July 22, 2011

POLITICAL HIGHLIGHTS

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

THE HEADLINES: DEBT CEILING SHOWDOWN: OBAMA VS CONGRESSIONAL LEADERS

 

• Timeline: Debt debate: President Barack Obama and top lawmakers will meet again Monday in search of a deal on slashing the U.S. budget deficit and raising the $14.3 trillion debt ceiling before the United States defaults.
  Obama wants to strike a deal well before August 2, when the Treasury Department says it will no longer be able to honor its obligations and issue new bonds without breaching the limit that Congress set on how much the United States can borrow.
  Republican and Democratic lawmakers say any increase must include measures to ensure the country’s debt remains at a sustainable level. The debt-reduction debate is a sharp shift for Washington, which less than a year ago was focused on additional deficit spending to lower the unemployment rate.
  Following is a timeline of the debate…. – Reuters, 7-11-11
• Factbox: What’s on the table in debt talks: President Barack Obama and congressional leaders resume their White House talks on Monday to see if they have the makings of a deal to trim budget deficits and avert a looming default.
  The Treasury Department has warned it will run out of money to cover the country’s bills if Congress does not raise the $14.3 trillion debt ceiling by August 2.
  Although Democrats and Republicans agree on the need for trillions of dollars in budget savings, they remain sharply divided about how to get there.
  Following is a summary of the debate… – Reuters, 7-11-11According to a Gallup poll released this week, 20% of Americans favor an approach that includes only spending cuts. Nearly a third — 32% — said they favored a deal created “equally with spending cuts and tax increases” and 30% said the deal should be made “mostly with spending cuts.” Only 4% favored a deal done just with tax increases. – USA Today, 7-15-11
• Various options for Obama, debt showdown foes in Congress: President Barack Obama, House Republicans and Senate leaders Mitch McConnell, R-Ky., and Harry Reid, D-Nev., have competing ideas about how to handle the need to increase the government’s borrowing limit and cut the budget. Highlights include…. – WaPo, 7-15-11
• Obama news conference: What the polls say: As Obama steps to the podium for his third press conference in two weeks, polls show the public widely concerned about the consequences of a default, but also troubled by the prospect of higher government spending if the debt limit is increased.
  Dueling concerns over spending, default – A Post-Pew survey released Monday finds 74 percent of the public “very” or “somewhat” concerned about the economic consequences of default, but fully 78 percent are concerned about higher government spending if the debt limit is raised. Asked to choose among worries, slightly more Americans – 47 percent – say raising the debt limit is a greater concern, while 42 percent are most worried about not raising the debt ceiling.
  Overall approval steady, but divided – Obama’s overall approval rating stands at the mid-to-upper 40s in recent polls, about even with his disapproval numbers. Obama clocks in at 44 percent approval in Gallup’s most recent tracking numbers, 49 and 47 percent in recent Ipsos-Reuters and Quinnipiac polls, the latter among registered voters.
  Obama trumps GOP on economy – Obama has regained a narrow advantage over Republicans in trust to handle the economy in a new Quinnipiac poll, and registered voters say by 48 to 34 percent that Republicans in Congress would be to blame if the debt limit is not raised. Despite gaining a recent edge over the GOP, a consistent majority have disapproved of his handling of the economy, including 56 percent in the recent Quinnipiac poll and 52 percent in the CBS/NYT poll in late June.
  Public skeptical of Obama on spending and taxes – Working against Obama, 42 percent of voters in the Quinnipiac poll – and 49 percent of independents – say Obama would cut “too little” government spending in combination with raising the debt ceiling, and four in 10 believe he would raise taxes too much. – WaPo, 7-15-11
• Obama on debt ceiling: Is he winning over Americans?: An increasing number of Americans are concerned about the consequences of not raising the debt ceiling, according to a new poll. President Obama has been blunt about the consequences of default…. – CS Monitor, 7-12-11“We might as well do it now — pull off the Band-Aid; eat our peas.” – President Barack Obama“I know you all love to write the soap opera here.” — Eric Cantor (R-Va.), joking about the Republican-Democrat split.

  “It’s time for tough love. Don’t let them scare you by telling you that the country’s going to fall apart.” — Michele Bachmann (R-Minn.), speaking to a cheering crowd in Iowa over the weekend.

  “I hope and pray and believe they should not raise the debt ceiling. These historic, dramatic moments where you can draw a line in the sand and force politicians to actually do something bold and courageous are important moments.” – Tim Pawlenty, Former Minnesota governor

  “A cataclysmic game of chicken. Negotiating with a gun to your head. A Thelma & Louise-style full throttle off a cliff.” — John Avlon at the Daily Beast, on the “dire metaphors” for the debate.

  “The debt ceiling is a gut-check time for all Republicans on spending and size of government. … Apparently, Gov. Romney is still checking his gut to figure out where he should stand.” — Alex Conant, spokesman for former Minnesota Gov. Tim Pawlenty.

  “You and I have decided to have lunch together today. We both need lunch. We both know we’re going to have lunch. But we don’t agree on where to eat. So you propose Mexican, but I counter with Chinese, and warn that if you refuse, neither of us will get to eat lunch ever again. Deal? … Of course not. But that’s pretty much the GOP’s strategy on the debt-ceiling negotiation.” — Ezra Klein on the partisan bickering

  “It’s a hostage negotiation! It’s a lunch conversation! No, it’s the debt ceiling debate.” — Eric Thompson at the Atlantic, on how to characterize the debt ceiling.

  “We are at each others throats more than is necessary.” — Jeff Immelt, chairman of Obama’s outside panel of economic advisers, calling the White House and Congress to strike a deal on Monday.

JULY 18, 2011: BIPARTISAN SENATE DEBT PLAN EMERGES

 

• Senate debt plan emerges Members seem likely to raise limit; outcome in House more iffy: A bipartisan effort in the Senate to allow President Barack Obama to raise the federal debt ceiling in exchange for about $1.5 trillion in spending cuts over 10 years gained momentum Sunday, as leaders agreed they would have to act in the next two weeks to avert a potential default by the U.S. government.
  The growing sentiment for raising the federal limit on U.S. borrowing sets the stage for a week of largely scripted actions on Capitol Hill, where leaders in both chambers are looking to build support for the plan being crafted by Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky.
  Republican leaders will first push forward in the House and the Senate with a constitutional amendment to balance the federal budget. The measure is virtually certain to fail in the Senate, which will then take up the debt limit proposal by midweek.
  If that clears the Senate, the House is expected to revise the measure, adding a proposal to reduce the deficit by $1.5 trillion over 10 years — savings that will come through cuts to domestic programs and not cuts to entitlement or new taxes.
  The plan would also create a new congressional panel that would, by the end of the year, seek to come up with a way of reducing the deficit by another $2.5 trillion or more through cuts in entitlements and other steps.
  Although the debt-limit plan has broad support in the Senate, the prospects in the House are less clear and rely largely on whether House Speaker John A. Boehner, R-Ohio, will bring the proposal up for a vote and how many House Democrats would support it since few Republicans are expected to get behind it…. – WaPo, 7-18-11
• Talks continue over debt ceiling: The White House and congressional leaders exchange possible proposals through the weekend. No immediate breakthrough is apparent.
  Hoping to break the impasse over the nation’s debt limit, White House and congressional leaders and aides continued their private discussions Sunday to exchange possible proposals to keep the government from defaulting on its bills.
  Senate leaders have shaped the outline of a compromise that would attach as much as $1.5 trillion largely in spending reductions to a debt ceiling increase, and establish a new congressional committee to present further cuts for a vote by year’s end. Other ideas also were being considered.
  No signs emerged that the negotiations were as contentious as last week, when tempers sometimes flared. But no immediate breakthrough was apparent.
  “There have been a lot of conversations going on, and they will continue,” Jacob Lew, director of the White House Office of Management and Budget, said on CNN’s “State of the Union.” Congress has been “figuring out what it could do,” Lew added on NBC’s “Meet the Press.” “That will continue over the next day or so.” President Obama and Vice President Joe Biden participated in the private discussions, which took place all weekend, the White House said…. – LAT, 7-18-11

JULY 17, 2011: DEBT IMPASSE CONTINUES — OBAMA SETS NEW DEADLINE FOR JULY 22, 2011

“It’s important for the American people that everybody in this town set politics aside, that everybody in this town set our individual interests aside, and we try to do some tough stuff. And I’ve already taken some heat from my party for being willing to compromise.” — President Obama on July 15, 2011 as he delivered a message to Republicans worried about angering the GOP’s right flank.

 

• Democrats, Republicans still at odds on debt ceiling: With five days remaining before President Barack Obama’s deadline for a deal to raise the U.S. debt ceiling, Republicans and Democrats have yet to agree on a big plan to cut the nation’s deficit and raise its debt limit in time to avoid an unprecedented U.S. default.
  Efforts to reach a comprehensive deficit-reduction deal are at an impasse over tax breaks as lawmakers — with an eye on 2012 elections — hold on to entrenched positions.
  This week, senators will likely move forward with a potential fallback plan that would authorize more borrowing power and could also include some spending cuts.
  Obama had set a Friday deadline for Congressional leaders from both parties to agree on a deal to raise the country’s debt ceiling. He said the July 22 deadline would give Congress enough leeway to write and pass legislation before August 2, when the government will run out of money to pay its bills…. – Reuters, 7-17-11
• ‘Big Deal’: $4T Budget Cut Package on Table, Sources Say: With the country’s credit card about to be cancelled, the White House said today there is still time to cobble together a “big deal” to lower the deficit.
  President Obama’s budget director, Jack Lew, says even though only a few days remain to start the legislative process to raise the debt ceiling, he is confident something will be approved.
  “I believe the debt will be extended,” he said on ABC’s “This Week.” “I think notwithstanding the voices of a few who are willing to play with Armageddon, responsible leaders in Washington are not.”
  And it does appear the “big deal” is back on the table. Capitol Hill sources tell ABC News that Obama and Republican House Speaker John Boehner are again talking about reducing the deficit by more than $4 trillion over the next decade or so. Boehner reportedly wants the president to lay out specific cuts to entitlement programs. But many Republicans doubt such a plan can get through Congress.
  Over the weekend the two leaders in the Senate continued to devise a “plan B” to avert the country from potentially defaulting.
  “That’s what the Senate is proceeding with,” Republican Sen. Jon Kyl of Arizona said this morning on ABC’s “This Week with Christiane Amanpour.” “Now, the House of Representatives has to make its decision about what it will do. But I’m simply answering your question, at the end of the day, I don’t think there will be a default.”
  The plan would give the president the authority to raise the country’s debt ceiling, while allowing Congress to avoid having to directly vote for the measure.
  “It takes the pressure off all the politicians, but it allows us to pass a debt limit without making the hard choices that this country has to make,” Republican Sen. Tom Coburn of Oklahoma said this morning on CBS’ “Face the Nation.”
  The standoff between Republicans and Democrats is led by House Majority Leader Eric Cantor of Virginia and a group of other Republicans on Capitol Hill who refuse to consider tax increases as part of the deal.
  While many Republicans refuse to consider tax hikes, some Democrats are unwilling to compromise on entitlement programs. House Democratic Leader Nancy Pelosi says she won’t accept a deal that includes cuts to entitlement programs like Social Security and Medicare…. – ABC News, 7-17-11
• Parties assess debt options as time runs short: The White House held out hope Sunday that congressional leaders still had time “to get something big done” with President Barack Obama as the deadline for raising the nation’s debt ceiling drew nearer without a solution.
  “I think that what is encouraging is that the leaders in Congress seem to have all agreed that we can’t push to a default,” White House budget director Jack Lew said. “So I think that there are many conversations going on in order to make sure that doesn’t happen.”
  White House and congressional aides are continuing discussions Sunday as Congress moves on two tracks to find a solution for increasing the nation’s borrowing authority while reducing long-term deficits. This comes after the failure to get a deal after five straight days of meetings between Obama and congressional leaders at the White House.
  “I think there’s still time to get something big done,” Lew said…. – AP, 7-17-11
• Debt crisis may help Obama woo independent voters: It’s possible the debt-ceiling debate will turn out badly for President Barack Obama. For now, however, it may be helping his image with a vital group: independent voters, who have decided the last several elections. He’s certainly playing to them.
  “It’s important for the American people that everybody in this town set politics aside, that everybody in this town set our individual interests aside, and we try to do some tough stuff. And I’ve already taken some heat from my party for being willing to compromise,” Obama said Friday as he delivered a message to Republicans worried about angering the GOP’s right flank. “My expectation and hope is, is that everybody, in the coming days, is going to be willing to compromise,” he said pointedly.
  Over the past week, Obama repeatedly has positioned himself as someone willing to make political sacrifices to reach a bipartisan accord and avoid a potentially disastrous default on U.S. obligations. He says some trims are needed to Social Security and Medicare, the safety-net programs dear to liberal Democrats. He also says an eventual package must include some tax increases, but only on the wealthiest Americans. The reactions from GOP and Democratic leaders — they are worried about angering their conservative and liberal bases with a deal to raise the debt limit — are boosting Obama’s image as a comparative centrist, a posture that could appeal to independent voters in next year’s presidential election…. – AP, 7-17-11
• G.O.P. Freshmen Say Debt Concerns Them More Than Re-election: For years, legislation to raise the federal debt limit offered plenty of political theater on Capitol Hill, with the party out of power using it to rail against the party in power. As a senator, Barack Obama said in 2006 that a bill to raise the debt limit was “a sign of leadership failure.” This time is different, and not only because the parties have switched roles. Now, conservative House Republicans have a virtual veto over a measure to increase the debt ceiling, and some freshmen in both chambers say they worry more about changing the ways of Washington than about getting re-elected.
  “Re-election is the farthest thing from my mind,” said Representative Tom Reed, a freshman Republican from upstate New York. “Like many of my colleagues in the freshman class, I came down here to get our fiscal house in order and take care of the threat to national security that we see in the federal debt. We came here not to have long careers. We came here to do something. We don’t care about re-election.”
  It is not clear how genuine or widespread that sentiment is in Congress, but regardless, it has upended what President Obama said on Friday had been a “difficult but routine process” in past years. The sheer size of the debt and its rapid growth in recent years have emboldened fiscal conservatives in the House, prompting some of them to pledge not to vote for a higher debt ceiling even if a compromise can be reached before Aug. 2, when the Treasury Department says it will hit the $14.3 trillion debt cap and run out of borrowing authority…. – NYT, 7-17-11
• Democratic and Republican politicians call for debt ceiling talks but impasse remains: Talks to raise the nation’s debt ceiling remain at an impasse as the deadline approaches – but political leaders from both parties may meet as soon as Sunday to resume brokering a deal.
  No negotiations were held yesterday, but White House officials asked Congressional leaders to keep their calendars clear this weekend to work toward an agreement before the nation defaults on its debt Aug. 2.
  President Obama, who has held a series of recent news conferences to make his case to the American public, devoted his weekly address to urge Republicans to compromise with their Democratic counterparts.
  “The truth is, you can’t solve our deficit without cutting spending,” said Obama, acknowledging that some in his own party weren’t happy with his proposals. “But you also can’t solve it without asking the wealthiest Americans to pay their fair share. “So I’ve put things on the table that are important to me and to Democrats, and I expect Republican leaders to do the same,” Obama said…. – NY Daily News, 7-17-11

JULY 16, 2011: DEBT CEILING DEAL DEADLINE

“This is not a matter of the American people knowing what the right thing to do is,” Obama said. “It’s a matter of Congress doing the right thing and reflecting the will of the American people.” — Barack Obama

“The truth is, you can’t solve our deficit without cutting spending,” Obama said in his weekly radio and Internet address on Saturday. “But you also can’t solve it without asking the wealthiest Americans to pay their fair share — or without taking on loopholes that give special interests and big corporations tax breaks that middle-class Americans don’t get.” — Barack Obama

 

• Debt limit crisis: what’s happening today?: No weekend negotiations on the debt limit crisis, though President Obama has told top lawmakers to keep their schedules free. In their weekend addresses, Obama and designated hitter Sen. Orrin Hatch made familiar arguments…. – CS Monitor, 7-16-11
• Developments in U.S. debt talks: Here is what is happening on Saturday in negotiations to raise the U.S. $14.3 trillion debt limit.
  President Barack Obama in his regular weekly radio address calls for shared sacrifice in a deficit reduction package that would help clear the way for Congress to raise the debt ceiling. He says he’s willing to compromise and calls on members of Congress to do the same. Republicans have refused to consider tax increases to reduce the deficit.
  Senator Orrin Hatch in the weekly Republican radio address talks about the need for a constitutional amendment requiring the federal government to balance its finances.
  No face-to-face negotiations are planned over the weekend between Obama and congressional leader but that could change.
  Senate Democratic Leader Harry Reid and Republican Leader Mitch McConnell are said to be discussing modifications to a plan put forward by McConnell that would raise the debt limit and put nearly all the burden on Obama to carry it out.
  Lawmakers are under growing pressure from the U.S. business community and U.S. creditors to strike a deal. China, the United States’ biggest foreign creditor with more than $1 trillion in Treasury debt, is urging Washington to adopt responsible policies to protect investor interests. – Reuters, 7-16-11
• Congress seeks debt solution, Obama goes to public: Racing the debt clock, Congress is working on dual tracks while President Barack Obama appeals to the public in hopes of influencing a deal that talks have failed to produce so far.
  “We have to ask everyone to play their part because we are all part of the same country,” Obama said Saturday, pushing a combination of spending cuts and tax increases that has met stiff resistance from Republicans. “We are all in this together.”
  In his weekly radio and Internet address, Obama said the wealthiest must “pay their fair share.” He invoked budget deals negotiated by GOP President Ronald Reagan and Democratic House Speaker Tip O’Neill, and Democratic President Bill Clinton and Republican Speaker Newt Gingrich.
  “You sent us to Washington to do the tough things, the right things,” he said. “Not just for some of us, but for all of us.”… – AP, 7-16-11
• Obama’s weekly address: Tax the rich as part of debt relief: President Obama isn’t giving up on his effort to include some tax increases in a “balanced” deficit-reduction plan.
  Obama uses his weekly address today to reiterated his pitch that along with domestic and defense spending cuts and changes to Medicare, taxes should rise for upper-income Americans and corporations that enjoy special tax loopholes.
  “If we’re going to ask seniors, or students, or middle-class Americans to sacrifice, then we have to ask corporations and the wealthiest Americans to share in that sacrifice,” Obama said. “We have to ask everyone to play their part. Because we are all part of the same country. We are all in this together.”… – USA Today, 7-16-11
• Obama may back fallback plan Still pushes tax increases as part of ‘big deal’: House Speaker John Boehner gave no public hint of accord after meeting with top presidential advisers yesterday.With talks on a big budget deal locked in stalemate, congressional leaders turned yesterday to negotiating a fallback plan for raising the debt limit as President Obama and House Republicans intensified their efforts to win over public opinion for the long political battle ahead.
  Given the impasse, House Republicans scheduled a vote for Tuesday on a measure that would cut deeply into the federal budget, cap government spending for the years ahead, and approve a constitutional amendment requiring a balanced budget. The Democratic-controlled Senate tentatively planned a vote for Wednesday on a balanced budget amendment.
  While neither measure will make it into law given opposition from Obama, Republicans are eager to reassure their conservative base that they are not backing down and that they will continue to press their case for vastly shrinking the government through the 2012 elections.
  Obama signaled that he would support the fallback plan, based on a proposal from Senator Mitch McConnell of Kentucky, the Republican minority leader, which would defer the bigger budget fight but allow for the debt limit to be raised…. – Boston Globe, 7-16-11
• Obama eyes more deficit talks: President Barack Obama will decide on Saturday whether to summon lawmakers for a new round of debt and deficit talks, weighing the chances of progress as both sides stick to their positions on spending and taxes.
  Congress must raise the $14.3 trillion limit on U.S. borrowing by August 2 or the government will run out of money to pay its bills, causing turmoil in global financial markets and potentially forcing the United States into another recession.
  The top two Republicans in the House of Representatives, John Boehner and Eric Cantor, met on Friday with Treasury Secretary Timothy Geithner and Bill Daley, the White House chief of staff.
  But prospects for a deal anytime soon appear unlikely, as the House and Senate were expected to spend much of next week debating measures that have little chance of becoming law…. – Reuters, 7-16-11
• Obama White House touts ‘compromise’ position: The White House is looking to build political support for its debt reduction plans by promoting the concept of compromise. The Republicans, meanwhile, say that — for Obama — “compromise” means taxes.
  White House senior adviser David Plouffe has e-mailed supporters a video of Obama talking to young people about politics.
  “The nature of our democracy and the nature of our politics is to marry principle to a political process that means you don’t get 100% of what you want,” Obama says at one point.
  The White House is promoting what it calls a “balanced” debt reduction plan, one that includes tax increases on wealthy Americans as well as budget cuts.
  “The President is willing to make tough cuts with real impacts, not easy decisions,” Plouffe writes in introducing the video, also available on the White House website. “But most Congressional Republicans have dug in and demanded that the sacrifice fall only on the middle class, seniors and struggling Americans.”
  Plouffe adds that “compromise isn’t a dirty word — in fact, it’s the only way our democracy can get big things done.”… – USA Today, 7-16-11
• Obama holds news conference on debt talks: President Obama challenged Congress on Friday to fulfill its obligation to put the country on the right fiscal footing for decades to come by slashing spending and increasing revenue as part of a bold package to raise the nation’s $14.3 trillion debt limit.
  In a news conference at the White House after five days of often-tense closed-door talks with congressional leaders, Obama said there is still time to put together a “big deal” before the Aug. 2 deadline imposed by the Treasury Department to avoid the first government default on its loans.
  He cautioned, however, that time is running short and said he will ask leaders if they have come up with a solution before the end of the weekend. “If they show me a serious plan, I’m ready to move,” Obama said.
  At issue: Democrats want trillions of dollars in spending cuts to be accompanied by new revenue through ending tax breaks for big oil companies and other such measures.
  “The American people are sold” on a plan that would do both, Obama said. “The problem is that members of Congress are dug in ideologically.”
  The pressure is on: Both Standard & Poor’s and Moody’s Investor Services have said they will consider downgrading the U.S. credit rating if a deal is not made soon…. – USA Today, 7-15-11
• Is Plan B Now Plan A in the Debt Talks? The pieces are moving in place for a debt ceiling deal, but it still may be a long shot:
  By most accounts, the debt ceiling talks have reached a kind of dead end. While not over, the two sides have realized that there just isn’t any more common ground to haggle over. With just two weeks left until the Treasury Department’s deadline to raise the federal debt limit, the pieces are beginning to come together for a steroid version of Senate Minority Leader Mitch McConnell’s plan to raise the debt ceiling in increments over the next year and a half. But the plan still has a tough road ahead, with conservatives crying foul over concessions to President Obama.
  The latest version of the plan is a hybrid of McConnell’s original idea and what both sides have loosely agreed to in the White House debt talks. Democratic sources say that McConnell and Senate Majority Leader Harry Reid are working on a proposal that would immediately enact the $1.5 trillion in spending cuts which White House and GOP negotiations have generally agreed on, and which then would space out debt ceiling hikes through the rest of 2011 and 2012. Those spending cuts would cover only federal discretionary spending, leaving entitlement programs such as Medicare and Social Security untouched. Lawmakers are also considering adding a provision which would set up a Senate committee to recommend further spending cuts, and bring them to a vote on the Senate floor. President Obama didn’t mention it specifically in his press conference Friday, but did note that he’d support a plan less ambitious than the grand bargain he had been pushing.
  In the meantime, both the House and Senate will soon vote on the so-called “Cut, Cap, and Balance” plan promoted by the Republican Study Committee, a conservative House group. That proposal would enact much deeper spending cuts, and only trigger a debt ceiling hike once the Senate and House had passed a balanced budget amendment and sent it to the states for ratification. It’s unlikely to pass, but is seen as a necessary catharsis for conservative lawmakers who may have to hold their noses and vote for a smaller deal.
  But not all will. Conservative opposition to the idea continues to grow. South Carolina Republican Sen. Jim DeMint, a regular thorn in the GOP leadership’s side, promised to use “every tool in the Senate” to stop McConnell’s plan. “No Republican was elected to give President Obama more power and that’s what this plan does,” DeMint wrote on his Twitter account. It’s not an idle threat. Even one senator could block the bill for days, making it difficult to pass under a tight deadline…. – US News, 7-15-11
• A Bad Economy Could Harm House Republicans: If you are a Republican trying to keep your job in Congress, your feelings about President Obama notwithstanding, would you rather the economy be better or worse?
  The answer is actually not so obvious. In five election cycles in the last 60 years, a poor economy combined with a divided government. This is how they proceeded… – NYT, 7-15-11

JULY 15, 2011: PRESIDENT OBAMA’S SECOND PRESS CONFERENCE ON DEBT CEILING CRISIS — SPEAKER JOHN BOEHNER ALSO SPEAKS TO PRESS

“Listen, we’re in the fourth quarter here. Time and time again Republicans have offered serious proposals to cut spending and address these issues, and I think it’s time for the Democrats to get serious as well. We asked the president to lead. We asked him to put forward a plan – not a speech, a real plan – and he hasn’t.” — John Boehner

“This is not some abstract issue. Congress has run up the credit card and we now have an obligation to pay our bills.” — President Barack Obama

“We have a unique opportunity to do something big. We have a chance to stabilize America’s finances for a decade, 15 years, or 20 years, if we are willing to seize the moment.” — President Barack Obama

“You have 80 percent of the American people who support a balanced approach. Eighty percent of the American people support an approach that includes revenues and includes cuts. So the notion that somehow the American people aren’t sold is not the problem,” “The problem is members of Congress are dug in ideologically into various positions because they boxed themselves in with previous… — President Barack Obam at a White House briefing room news conference.

John Boehner: The President said today that the American people are “sold” on job-crushing tax hikes. Most Americans would beg to differ. Our looming debt crisis isn’t the result of Washington not taxing enough; it’s the result of our government spending too much. It’s absurd & self-destructive to continue dumping taxpayer money into a failed ‘stimulus’ philosophy. The White House must step up & embrace real spending reductions. — – John Boehner

 

• Full Text July 15, 2011: President Obama’s Second Press Conference This Week on the Debt Ceiling Negotiations — WH, 7-15-11
• Live blog of Obama’s press conference – CNN, 7-15-11
• Obama’s hands-on negotiation a political necessity: President Barack Obama’s decision to haul lawmakers in day by day to negotiate a debt deal comes down to reality: He has no other choice. The president has essentially cleared his agenda to deal with one enormous crisis.
  The threat of an unprecedented government default, combined with the shrinking time left to prevent it, has prompted an extraordinary dynamic in a town of divided government and divisive politics. For five straight days, the president and leaders of Congress have gathered in the Cabinet Room to try to work it out…. – AP, 7-15-11
• House to Vote on $2.4 Trillion Debt Increase, Cuts: House Republicans will vote next week on legislation to limit spending and tie a $2.4 trillion increase in the U.S. debt ceiling to a constitutional amendment to balance the budget, a plan President Barack Obama dismissed as not “serious.”
  While the measure may win acceptance by the Republican-led House, it can’t pass the Democratic-controlled Senate, said Representative Steny Hoyer of Maryland, the House’s No. 2 Democrat. It will let Republicans put their stance on the record while offering no immediate resolution to talks in Washington aimed at reaching a deficit-cutting deal by an Aug. 2 deadline for raising the $14.3 trillion debt ceiling.
  “You’ll probably see the House vote on a couple of things just to make political statements,” Obama said at a White House news conference today. The Republican plan, which would mandate spending cuts of at least $2.4 trillion without increasing tax revenue, “doesn’t seem like a serious plan to me,” the president said.
  A constitutional amendment requires a two-thirds vote of both House and Senate, and then ratification by three-fourths of the 50 states. “We don’t need a constitutional amendment to” revamp the government’s finances, Obama said. “What we need to do is do our jobs.”… – Bloomberg, 7-15-11
• House Republicans Plan Vote on Deficit: With budget negotiations with the White House stalled, Speaker John A. Boehner of Ohio said Friday that the House would vote next week on a three-part plan to cut the deficit, cap federal spending as a share of the economy and amend the Constitution to require a balanced budget.
  The plan, which has a companion in the Senate, would represent the House position in the final stages of the debate as the federal government nears the limit of its borrowing power. While it would not appear to have a chance of passing the Democrat-controlled Senate, and President Obama is opposed, it could provide a legislative avenue to increasing the debt limit as it makes it way through Congress.
  The House Republican leader, Representative Eric Cantor of Virginia, said the House would move on its own because the president’s deficit-reduction proposals fell far short of what was needed…. – NYT, 7-15-11
• Obama calls on Congress to act on big debt ceiling deal: President Obama challenged Congress on Friday to put the country on the right fiscal footing for decades to come by slashing spending and increasing revenue as part of a package to raise the nation’s $14.3 trillion debt limit.
  In a news conference at the White House after five days of often-tense closed-door talks with congressional leaders, Obama said there is still time to put together a “big deal” to solve the nation’s debt and deficits problem for the long term and raise the debt ceiling before the Aug. 2 deadline imposed by the Treasury Department.
  He cautioned, however, that time is running short to avoid the first government default on its loans, something Federal Reserve Chairman Ben Bernanke and a host of economists have warned would be catastrophic. Obama said he is asking leaders to come up with a solution before the end of the weekend. “If they show me a serious plan, I’m ready to move,” Obama said…. – USA Today, 7-15-11
• Obama calls on Congress to ‘seize the moment’ on debt talks: President Obama with new immediacy today reiterated his call for a sweeping plan to deal with the nation’s long-term debt problems. He warned GOP lawmakers that time is running out on a deal that would prevent the U.S. from defaulting on its financial obligations.
  In his second news conference this week on the issue, Obama called on lawmakers to give him a “serious” plan to raise the debt ceiling within the next 24 or 36 hours. But he emphasized the need for Congress to “put politics aside” and tackle an “ambitious” solution to the nation’s deficit problems–not just a quick fix.
  “We have a unique opportunity to do something big,” Obama said. “We have a chance to stabilize America’s finances for a decade, for 15 or 20 years, if we are willing to seize the moment.”
  But the president acknowledged it would be “tough” to get Democrats and Republicans to agree on a significant proposal before Aug. 2, when the Treasury Department says the U.S. will begin defaulting on its more than $14 trillion debt. Obama warned that if nothing is done, Americans could be facing financial catastrophe, including more job loss and potentially higher interest rates, which he described as “effectively a tax increase on everybody.”… – AP, 7-15-11
• Obama Reiterates Desire for Comprehensive Budget Package: In a news conference, President Obama held out hope Friday that a broad deal could be reached on raising the debt ceiling.Doug Mills/The New York TimesPresident Obama held out hope Friday that a broad deal could be reached on raising the debt ceiling.
  President Obama on Friday reiterated his desire to reach a grand bargain that would deal with the nation’s long-term debt problems even as leaders in Washington take action to avoid a financial default by the government.
  Mr. Obama said that he was encouraged by comments from lawmakers in both parties signaling an understanding of the need to increase the nation’s debt ceiling in the next two weeks.
  “The American people expect more than that. They expect that we try to solve our problem,” Mr. Obama said. “We have a chance to stabilize America’s finances for a decade, for 15 years or 20 years, if we are willing to seize the moment.”… – NYT, 7-15-11
• Boehner: Obama has no debt plan. Republicans do: The House next week will take a vote to raise the debt ceiling and pass a balanced budget amendment, House Republican leaders said today.
  The plan is unlikely to go anywhere, since a balanced budget amendment would likely fail in the Democrat-led Senate, but GOP leaders nevertheless called it a serious plan to raise the debt ceiling. They said President Obama and Democrats have failed to come up with an equally serious plan…. – CBS News, 7-15-11
• Debt ceiling adversaries take a time out to face the microphones: With roughly a week left for President Obama and congressional leaders to reach an agreement on raising the debt ceiling, both sides took time out to argue their case to the public…. -
  With roughly a week to go for President Obama and congressional leaders to reach agreement on raising the nation’s debt ceiling and prevent a government default, both sides in the debate took time out from negotiations to argue their case to the public.
  Friday morning began on Capitol Hill with House Speaker John Boehner (R) telling reporters that congressional Democrats and the president had not been serious in the Republicans’ sometimes heated negotiations with the White House…. – CS Monitor, 7-15-11
• Debt ceiling: financial world warns Washington to hurry up: Fed Chairman Ben Bernanke warns of a ‘self-inflicted’ wound, and Wall Street firms see dire consequences, if stalemate over how to raise the US debt ceiling persists…. – CS Monitor, 7-15-11
• Allan Lichtman: Obama’s hands-on negotiation a political necessity: “It’s absolutely remarkable,” said Allan Lichtman, a presidential historian at American University.
  “Obama has got to get this done,” Lichtman said. “Even if people blame the Republicans in Congress, he’s the president. And if things go rotten on his watch, he pays for it. This is his moment. And he knew it was going to be trouble, because Republicans have very little incentive to make a deal.” – AP, 7-15-11

JULY 14, 2011: PRESIDENT OBAMA SETS DEBT DEAL TIME LIMIT T-36 HOURS

“It’s decision time. We need concrete plans to move this forward.” — President Barack Obama

“We’ve looked at all available options, and we have no way to give Congress more time to solve this problem. The eyes of the country are on us, and the eyes of the world are on us, and we need to make sure that we stand together and send a definitive signal that we are going to take the steps necessary to avoid default.” — Treasury Secretary Timothy F. Geithner

 

• ‘Decision Time’ on Budget, Obama Tells Leaders: President Obama threw the deadlocked budget negotiations back to Congress on Thursday, telling Republicans and Democrats to try to work out an agreement to avert a government default, and suggesting that more ambitious efforts to cut the deficit had hit a wall.
  After a polite but inconclusive session that covered familiar ground and made no headway, Mr. Obama told the Congressional leaders to confer with their rank-and-file members over the next 24 to 36 hours to “figure out what can get done,” said a Democratic official briefed on the negotiations.
  The president said he might summon the leaders to the White House over the weekend if there was no progress; he has scheduled a news conference for Friday morning to argue his case publicly. On Capitol Hill, leaders of both parties were focused increasingly on a proposal by the Senate Republican leader, Mitch McConnell of Kentucky, that could provide a way out of the stalemate on the debt limit…. – NYT, 7-14-11
• Obama gives leaders ’24 to 36 hours’ to come to debt agreement: President Obama told congressional leaders at their latest debt-limit meeting that they must come to an agreement on the way forward by early Saturday morning or else they will be called back to the White House this weekend, aides from both parties with knowledge of the meeting said Thursday evening.
  At a meeting that lasted 80 minutes, congressional negotiators and the White House finished their review of the work done by a group led by Vice President Biden, said the aides, who were not authorized to speak publicly about the meeting.
  At the end, Obama told the bipartisan leaders that, over the next 24 to 36 hours, he wanted them to indicate a path forward that would be able to pass both chambers.
  No White House meeting is set for Friday. Instead, leaders are expected to go to their rank-and-file members to discuss the negotiations.
  Thursday’s meeting ended at 5:43 p.m. Shortly afterwards, the White House announced that Obama would hold a news conference at 11 a.m. Friday…. – WaPo, 7-14-11
• Looking for debt deal, Obama outlines cuts: President Obama implored congressional leaders Thursday to reach a deal on raising the nation’s $14.3 trillion borrowing limit by this weekend to reassure jittery world financial markets, and he suggested he could settle for a smaller deficit-reduction package than he originally sought.
  Rather than continue to push for $4 trillion in savings over the next decade, Obama outlined a plan that would achieve roughly $2 trillion, almost entirely from spending reductions. That marks a major concession — one the president is likely to address at a news conference scheduled for 11 a.m. ET this morning.
  At the same time, Senate Republican leader Mitch McConnell and Democratic leader Harry Reid forged ahead with an even smaller deal of their own, one that represents a second fallback plan. It would allow Obama to raise the debt limit and create a process by which Congress would vote in the future on spending reductions…. – USA Today, 7-14-11
• As White House talks falter, Senate works on agreement to raise debt limit: President Obama prepared Thursday to bring bipartisan talks over the debt to a close, as Senate leaders worked across party lines to craft an alternative strategy to raise the nation’s $14.3 trillion debt limit and avert a government default.
  “It’s decision time,” Obama told congressional leaders after meeting at the White House for a fifth straight day. Obama gave Republicans until early Saturday to tell him whether any of three options for trimming the federal budget would win GOP support.
  “We need concrete plans to move this forward,” he said.
  A breakthrough in the White House talks looked unlikely, however, leaving the Senate framework as the chief option for raising the debt limit before Aug. 2, when the Treasury will be unable to pay its bills without additional borrowing authority.
  That deadline loomed ever larger Thursday, as China, the U.S. government’s largest foreign creditor, called on U.S. policymakers to take action to protect the interests of investors. Federal Reserve Board Chairman Ben S. Bernanke warned that failure to raise the debt ceiling would amount to “a self-inflicted wound” that would cause “a very severe financial shock” to the global economy. And Treasury Secretary Timothy F. Geithner told lawmakers that they are running out of time…. – WaPo, 7-14-11
• What Happened Between Cantor and Obama?: Representative Eric Cantor of Virginia, the House majority leader, speaks to reporters on Monday on Capitol Hill.Karen Bleier/Agence France-Presse — Getty ImagesRepresentative Eric Cantor of Virginia, the House majority leader, speaks to reporters on Monday on Capitol Hill. Something happened between President Obama and Representative Eric Cantor of Virginia on Wednesday night.
  The stakes have always been high as Mr. Obama and Republican leaders face off over fundamental questions about the nation’s debt, spending, taxes and entitlement programs. But placed in the context of the deepening partisan discourse in Washington over the past 72 hours, the sharp exchange between the president and Mr. Cantor, the House majority leader, at the end of Wednesday’s negotiating session stands as perhaps the most revealing moment of the personalities and the politics at play.
  Like most important dramas in Washington, the brief but tense back-and-forth between Mr. Cantor and Mr. Obama took place behind closed doors. But in typical Washington fashion, the participants quickly began sketching out a script as soon as it was over. What happened, exactly, depends on which version of that script one reads. Each is loaded with political spin that aims to portray its side in the best light possible. But both versions suggest that the search for a reasonable middle ground before the Aug. 2 deadline will be increasingly difficult… – NYT, 7-14-11
• Obama, lawmakers face fresh doubts on debt deal: President Barack Obama and top Republicans faced growing pressure at home and abroad on Thursday to stop deficit talks from spiraling out of control and sending shockwaves through the global financial system.
  Markets reacted skittishly after the fourth straight day of talks between Obama and congressional leaders hit a new low on Wednesday, while divisions within the Republican party seemed to increase the difficulty of striking a deal to extend the nation’s borrowing authority and avoid a default after August 2.
  The Democratic president clashed with Republican lawmakers during an acrimonious two-hour White House session on Wednesday that produced no progress toward a deal. A leading Republican said Obama walked out of the meeting.
  Treasury Secretary Timothy Geithner met with Democratic senators and urged quick action, saying “we are running out of time.”… – Reuters, 7-14-11
• GOP threatens to bolt on McConnell’s plan: “I would say, ‘No way,’” said Ohio Rep. Jim Jordan, chairman of the conservative Republican Study Committee, whose members constitute roughly three-quarters of the House GOP.
  “Everybody I’ve talked to over here says, ‘No way,’” said Florida Rep. Tom Rooney, a member of the vote-counting whip team.
  But earlier in the day, Boehner declined to pronounce the death of McConnell’s plan, which has gained some traction in the Senate and is being held in reserve as a last-resort option to avoid an economic disaster. Rather than getting a vote as is, the plan will more likely move forward in another form or alongside appetizing additives intended to help Republicans in both chambers digest the debt hike and a cession of power to the president.
  “Mitch described his proposal as a last-ditch effort in case we’re unable to do anything else,” Boehner told reporters Thursday. “And what may look like something less than optimal today, if we are unable to reach an agreement, might look pretty good a couple of weeks from now. I think it’s worth keeping on the table. There are a lot of options that people have floated. And frankly, I think it’s an option that may be worthy at some point.” Boehner said he has “no idea” whether McConnell’s plan will pass his chamber. Several GOP lawmakers said privately that it stands no chance…. – Politico, 7-14-11
• With no debt deal, Obama would face tough choices Aug. 3 about what bills to pay: What happens if President Obama and Congress don’t strike a debt deal? On Aug. 3, the nation would find out, with Obama forced to make a set of extraordinarily difficult choices about what to pay or not pay. By then, the government’s savings account would be nearly empty and the president would be relying on daily tax revenue to pay the nation’s bills.
  There wouldn’t be enough — in fact, there would be a $134 billion shortfall in August alone.
  As Obama decided what to pay, he would choose among Social Security checks, salaries for members of the military and veterans, unemployment benefits, student loans, and many other government programs, according to administration officials and an independent analysis by a former senior Treasury Department official in the George H.W. Bush administration.
  To protect the nation’s creditworthiness, Obama would have to balance those priorities with the imperative of making payments to investors in U.S. government bonds — ranging from domestic pension funds to the Chinese government…. – WaPo, 7-13-11

JULY 13, 2011: 5TH WHITE HOUSE MEETING; OBAMA & CANTOR SPAR, PRESIDENT WALKS OUT

“I’ve reached my limit. This may bring my presidency down, but I will not yield on this… Enough is enough. … I’ll see you all tomorrow.” — President Barack Obama

Cantor said the president became “agitated” and warned the Virginia Republican not to “call my bluff” when Cantor said he would consider a short-term debt-limit hike. The meeting “ended with the president abruptly walking out of the meeting,” Cantor told reporters in the Capitol. “I know why he lost his temper. He’s frustrated. We’re all frustrated.”

 

• Obama ends talks brusquely: President Barack Obama has ended a nearly two hour debt-limit negotiation brusquely, declaring: “Enough is enough” as he rejected Republican demands that he accept a short-term extension of the government’s borrowing authority.
  Democratic officials and Republican aides familiar with the negotiations say the meeting ended after White House officials had identified more than $1.5 trillion in spending cuts over 10 years to reduce the deficit. Pressed by House Republican leader Eric Cantor to accept only months-long debt ceiling increase, Democratic officials say Obama announced: “Enough is enough. We have to be willing to compromise. It shouldn’t be about positioning, and politics and I’ll see you all tomorrow.”… – AP, 7-13-11
• Tempers flare as debt talks get tense at White House:
  

  Obama vows to veto any short-term extension, even at risk to his presidency, sources say Cantor, Boehner seek a short-term debt ceiling hike opposed by Obama Moody’s puts U.S. bond rating under review The United States must raise its $14.3 trillion debt ceiling by August 2 or risk a default

  A fifth session of talks in five days is set for Thursday to head off a possible government default. Wednesday’s session ended on a tense note with House Majority Leader Eric Cantor and President Barack Obama squaring off over the Republican’s call for a short-term extension of the federal debt ceiling.
  At one point, Obama said the political wrangling confirmed what the public considers to be the worst of Washington, according to Democratic sources familiar with the talks who spoke on condition of not being identified.
  Multiple sources, also speaking on condition of anonymity, said Obama told the gathering that “this could bring my presidency down,” referring to his pledge to veto any short-term extension of the debt ceiling. Sources say he vowed, “I will not yield on this.”
  Obama to Cantor: Don’t call my bluff
  The exchange concluded almost two hours of talks that failed to achieve a breakthrough….. – CNN, 7-14-11

• President Obama abruptly walks out of debt ceiling talks: President Barack Obama abruptly walked out of a stormy debt-limit meeting with congressional leaders Wednesday, a dramatic setback to the already shaky negotiations.
  “He shoved back and said ‘I’ll see you tomorrow’ and walked out,” House Majority Leader Eric Cantor (R-Va.) told reporters in the Capitol after the meeting.
  On a day when the Moody’s rating agency warned that American debt could be downgraded, the White House talks blew up amid a new round of sniping between Obama and Cantor, who are fast becoming bitter enemies.
  When Cantor said the two sides were too far apart to get a deal that could pass the House by the Treasury Department’s Aug. 2 deadline — and that he would consider moving a short-term debt-limit increase alongside smaller spending cuts — Obama began to lecture him.
  “Eric, don’t call my bluff,” the president said, warning Cantor that he would take his case “to the American people.” He told Cantor that no other president — not Ronald Reagan, the president said — would sit through such negotiations.
  Democratic sources dispute Cantor’s version of Obama’s walk out, but all sides agree that the two had a blow up. The sources described Obama as “impassioned” but said he didn’t exactly storm out of the room.
  “Cantor’s account of tonight’s meeting is completely overblown. For someone who knows how to walk out of a meeting, you’d think he’d know it when he saw it,” a Democratic aide said. “Cantor rudely interrupted the president three times to advocate for short-term debt ceiling increases while the president was wrapping the meeting. This is just more juvenile behavior from him and Boehner needs to rein him in, and let the grown-ups get to work.”
  On exiting the room, Obama said that “this confirms the totality of what the American people already believe” about Washington, according to a Democratic official familiar with the negotiations, and that officials are “too focused on positioning and political posturing” to make difficult choices.
  Cantor insists he never interrupted the president, and was “deferential,” seeking permission to speak…. – Politico, 7-13-11
• ‘Enough is enough,’ Obama says, calling for deal: Amid new warnings and fresh signs of strain, President Barack Obama and congressional leaders are entering a perilous debt-limit endgame. The president, declaring “enough is enough,” is demanding that budget negotiators find common ground by week’s end even as the Senate’s top Republican gained followers for his own last-ditch scheme to avoid a government default.
  The continuing impasse was unsettling Wall Street, which up to now had performed as if an increase in the debt ceiling was not in doubt. And the looming Aug. 2 cutoff for action was creating new tensions between the president and Republican leaders.
  Moody’s Investors Service said Wednesday it will review the government’s credit rating, noting there is a small but rising risk that the government will default on its debt. If Moody’s were to lower the ratings, the consequences would ripple through the economy, pushing up rates for mortgages, car loans and other debts. A Chinese rating agency, Dagong Global Credit Rating Co., also warned of a possible downgrade.
  Federal Reserve Chairman Ben Bernanke, addressing lawmakers, warned Wednesday that not increasing the nation’s debt ceiling and allowing the nation default on its debt would send “shock waves through the entire financial system.”
  And in the cauldron of the White House Cabinet Room, Obama and top lawmakers bargained for nearly two hours Wednesday on spending cuts. Obama curtly ended the session when House Majority Leader Eric Cantor, R-Va., urged Obama to accept a short, monthslong increase in debt instead of one that would last through next year’s presidential election.
  “Enough is enough. … I’ll see you all tomorrow,” Obama said, rising from the negotiating table and leaving the room, according to several officials familiar with the session…. – AP, 7-14-11
• Moody’s moves one step closer to downgrading U.S. debt: Moody’s Investors Service said Wednesday it has put the U.S. government’s top-notch credit rating on review for a possible downgrade because of the risk that Washington will not raise the federal debt ceiling in time to avoid a default.
  The firm added that even a brief failure of the government to pay its bills would mean that the United States’s Aaa rating “would likely no longer be appropriate.”
  The announcement comes after Standard & Poor’s, another of the major credit rating agencies, has said that it would dramatically downgrade the U.S. government’s credit rating if payments were missed.
  The U.S. has long been able to borrow money cheaply because global investors believe the government can be counted on to repay its debts. If credit rating agencies downgrade the U.S. and investors lose their faith in the creditworthiness of the government, the cost of borrowing money — in other words, the interest rate — could rise…. – WaPo, 7-13-11
• Eric Cantor walks tightrope with GOP: As he has surged to the forefront of debt-limit negotiations and faced round-the-clock scrutiny on cable and radio talk shows, a fundamental question about House Majority Leader Eric Cantor’s high-stakes political maneuvering is being discussed in the halls of power.
  Is he building street cred with House Republicans or overplaying his hand? The answer may be both. Cantor’s allies note that he’s been put in the spotlight by assignment — from Speaker John Boehner and President Barack Obama — not by choice. And they say he has gained political capital within the GOP conference.
  Cantor has a lot riding on the outcome of the debt-limit negotiations. He’ll share in the public blame if they fall apart and the economy tanks, and he’ll face recriminations from his conservative base in the House if he cuts too soft a deal with the president.
  Still, there’s little question that Republicans, led by Cantor’s steadfast loyalty to their bottom line, have forced the debt-limit debate to be framed in terms of trillions in cuts instead of the clean debt increase Obama originally wanted.
  With only 22 percent of respondents supporting a vote in favor of the debt increase according to a Gallup Poll, Republicans believe they’re on firm footing with voters as they push for historically deep spending cuts…. – Politico, 7-13-11
• Debt stalemate – who budges first? – Politico Arena, 7-13-11

JULY 12, 2011: REPUBLICAN SENATE MINORITY LEADER MITCH MCCONNELL’S DEBT PLAN FOR OBAMA

“After years of discussions and months of negotiations, I have little question that as long as this president is in the Oval Office, a real solution is probably unattainable.” — Senate Republican Leader Mitch McConnell said in remarks on the Senate floor

 

• McConnell’s last ditch debt ceiling plan: What’s in it for Republicans?: Senate Republican leader Mitch McConnell proposes a ‘last choice option’ that would allow President Obama to raise the national debt ceiling without GOP support.
  In a surprise move, Senate Republican leader Mitch McConnell on Tuesday proposed a “last choice option” to avoid default on the national debt that would require the support of just over a third of the House and Senate to raise the national debt ceiling.
  The McConnell proposal, which requires special legislation to be adopted, gives the president expedited procedures to increase the debt limit by as much as $2.4 trillion that require only submission of a plan to reduce spending by a greater amount. There is no requirement that Congress actually pass those spending cuts.
  But even if the cuts are never passed, the proposal has two political advantages for Republicans: It forces President Obama to lay out his proposed spending cuts in writing, a longtime GOP demand. And it absolves Republicans of responsibility for sending the nation into its first-ever default, as early as Aug. 2…. – CS Monitor, 7-12-11
• A Pathway Out of the Debt Crisis: Political gain, not economic sense or sound policy, has always been at the core of Republican strategy on the debt-ceiling talks — a cynical ploy to appear serious about cutting spending while actually holding hostage the nation’s strong credit rating. Now that the real risks to their strategy are becoming apparent, including the possibility of cutting off Social Security checks, the more experienced members of the party are beginning to rethink their plans.
  On Tuesday, Senator Mitch McConnell, the Republican leader, proposed a convoluted fallback solution that would at least defuse the crisis his party created a few weeks ago by threatening to force the country into default on its national debts. The plan is no less cynical than the original threat, but if the House goes along, it may allow Washington, the credit markets and the American people to breathe a little easier.
  Mr. McConnell’s plan would allow President Obama to raise the debt ceiling by $2.5 trillion in three increments through the end of 2012. Congress could vote to disapprove each increment, but the president could veto its resolutions of disapproval, and the debt ceiling would then rise.
  The president would have to identify possible spending cuts equal to the debt ceiling increases, but he would get to choose the cuts, and would not have to make them before the two chambers vote. Congress would be unable to force him to make the cuts it wants, except through the regular appropriations process.
  The proposal is clearly meant to shift all the blame for raising the debt ceiling onto the president, and away from Republicans. Every Republican in Congress could proudly vote against the debt increases, but the ceiling would still go up, because there are not enough Republicans to override a veto. It’s a distinction that makes sense only in the current Washington frame of mind, but it’s a trade-off worth making to avoid either a default or radical cuts to discretionary spending and entitlement programs…. – NYT, 7-13-11
• McConnell, Boehner blast Obama over debt talks: Just hours before another White House meeting, the top two Republicans in Congress blasted President Obama today for a debt reduction proposal they say is more specific about taxes than actual budget cuts.
  “In my view the president has presented us with three choices,” said Senate Minority Leader Mitch McConnell, R-Ky., referring to efforts to raise the $14.3 trillion debt ceiling. “Smoke and mirrors, tax hikes, or default.” “Republicans choose none of the above,” McConnell said. “I had hoped to do good; but I refuse to do harm.”
  Meanwhile, House Speaker John Boehner, R-Ohio, demanded more specifics from Obama, saying, “Where’s the president’s plan? When’s he going to lay his cards on the table?” “This debt limit increase is his problem,” Boehner said. “I think it’s time for him to lead by putting his plan on the table, something that the Congress can pass.”
  Republican and Democratic leaders are scheduled to meet with Obama at 3:45 p.m., a third straight day of negotiating…. – USA Today, 7-12-11

JULY 12, 2011: WHITE HOUSE MEETINGS CONTINUE

 

• Obama says he cannot guarantee Social Security checks will go out on August 3: President Obama on Tuesday said he cannot guarantee that retirees will receive their Social Security checks August 3 if Democrats and Republicans in Washington do not reach an agreement on reducing the deficit in the coming weeks.
  “I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it,” Mr. Obama said in an interview with CBS Evening News anchor Scott Pelley, according to excerpts released by CBS News.
  The Obama administration and many economists have warned of economic catastrophe if the United States does not raise the amount it is legally allowed to borrow by August 2…. – CBS News, 7-12-11
• Obama, lawmakers regroup to seek U.S. debt deal: President Barack Obama and congressional leaders, struggling to break an impasse over taxes and spending cuts, will regroup on Tuesday to seek common ground for a deal to avoid a looming U.S. debt default.
  Obama and top lawmakers from both political parties will hold their third meeting in as many days at the White House at 3:45 p.m. (1945 GMT) to hammer out elements of legislation to reduce the U.S. deficit and raise the debt ceiling by Aug. 2.
  The two sides remain far apart on the role of revenues in a deficit-fighting plan. The White House wants to end Bush-era tax breaks for the wealthiest Americans and close other corporate tax loopholes, boosting federal coffers even as massive government spending cuts are made…. – Reuters, 7-12-11
• Obama urges Republicans to follow Reagan example: President Barack Obama urged Republicans to draw inspiration from the hero of fiscal conservatives, Ronald Reagan, who had agreed to revenue increases to cut the US deficit.
  “Ronald Reagan repeatedly took steps that included revenue, in order for him to accomplish some of these larger goals,” Obama told CBS in an interview.
  “And the question is if Ronald Reagan could compromise — why wouldn’t folks who idolize Ronald Reagan be willing to engage in those same kinds of compromises.”… – AFP, 7-13-11
• McConnell Proposal Gives Obama Power to Increase Debt Limit: The Senate Republican leader, Mitch McConnell of Kentucky, said Tuesday that a bipartisan budget deal with President Obama was probably out of reach, and he proposed a plan under which the president could increase the federal debt limit without Congressional approval for offsetting spending cuts.
  Mr. McConnell’s proposal reflected a growing sense of pessimism on Capitol Hill about the prospects that Mr. Obama and Congressional leaders could come to terms on a budget deal before the government’s borrowing authority hits its limit on Aug. 2. The negotiators sat down for another round of talks at the White House on Tuesday afternoon…. – NYT, 7-12-11
• The tea party, the debt ceiling and John Boehner’s conundrum: House Speaker John Boehner of Ohio speaks to reporters on Capitol Hill in Washington, Monday, July 11, 2011, as the debt talks continued. (AP Photo/Susan Walsh)When Republicans retook the House in the 2010 midterm elections, there were a handful of smart party strategists who cautioned that managing the majority might be more trouble than anyone thought, due to the scores of tea party-aligned members coming into Congress.
  Six months into the 112th Congress and House Speaker John Boehner (Ohio) is learning that lesson in spades, as the debt ceiling debate rages on with no signs of compromise.
  New polling from the Washington Post and Pew Research Center paints Boehner’s challenge in corralling the tea party element of the Republican conference in stark relief.
  The data suggests that those who identify as Republicans who are supportive of the tea party not only view themselves as far more educated than the average person on the current debt debate, but are also far more worried about the impact if the debt limit is increased.
  More than eight in 10 tea party supporters (81 percent) said they understand “what would happen if the government does not raise the federal debt limit” — far more than the 55 percent of all respondents who said the same thing.
  Three quarters of tea party supporters said that they were more concerned that raising the debt ceiling would “lead to higher government spending and make the national debt bigger,” while just 19 percent said they were more worried that “not raising the debt limit would force the government into default and hurt the nation’s economy.”
  That stands in stark contrast to all Americans in the poll, 47 percent of whom said raising the debt limit was a bigger concern while 42 percent said not raising it was the bigger worry…. – WaPo, 7-12-11

JULY 11, 2011: PRESIDENT OBAMA PRESS CONFERENCE ON DEBT CEILING NEGOTIATIONS

 

• McConnell Offers Three-Stage Debt-Limit ‘Last Choice’ Option: Senate Republican Leader Mitch McConnell proposed a “last choice option” for increasing the U.S. debt limit in three stages in case President Barack Obama and Congress can’t agree on a deficit-reduction plan.
  McConnell’s plan would let the president raise the limit, while accompanying it with offsetting spending cuts, unless Congress struck down his plan with a two-thirds majority. The debt-ceiling increase could occur without the companion spending cuts, McConnell said.
  Don Stewart, a spokesman for McConnell, said the plan would allow Obama to raise the debt limit while putting the onus on him and congressional Democrats for any failure to cut spending. At the same time, Republicans wouldn’t have to agree to tax increases.
  The proposal is “not my first choice,” McConnell said, adding that he wanted to show the financial markets that the U.S. will not default on its debts. He said he continues to seek a broader deal to raise the $14.3 trillion debt limit with congressional Democrats and the White House. “We’re certainly not going to send a signal to the markets and the American people that default is an option,” he said…. – Bloomberg, 7-12-11
• Debt deal: How to kill three birds with one stone: President Barack Obama and Republican leaders have been mired in a dispute over taxes as they try to avert a looming debt default, but a deal is possible that would allow both sides to declare victory.
  Republicans could live up to their promise to prevent tax increases. At the same time, Democrats could say they are raising taxes on the rich and boosting the economy.
  That could resolve the biggest remaining obstacle to a budget deal that would cover the United States’ borrowing needs through the November 2012 elections. Congress needs to act soon to ensure the Treasury can continue paying its bills beyond August 2.
  The two sides have already agreed in principle on roughly $1.5 trillion to $2 trillion in spending cuts but have repeatedly clashed over raising new tax revenue, which Democrats insist must be part of any deficit-reduction package…. – Reuters, 7-12-11
• Obama Grasping Centrist Banner in Debt Impasse: President Obama made no apparent headway on Monday in his attempt to forge a crisis-averting budget deal, but he put on full display his effort to position himself as a pragmatic centrist willing to confront both parties and address intractable problems.
  At a news conference preceding the latest round of debt-reduction talks with Republican and Democratic Congressional leaders, Mr. Obama said he would not accept a temporary agreement to kick the problem down the road a few weeks or months.
  He said that he was willing to take the heat from his own party to move beyond entrenched ideological positions and that Republicans should do the same. And he continued to insist on “the biggest deal possible,” saying that now is the best opportunity for the nation to address its long-term fiscal challenges.
  Republicans dismissed his performance as political theater. But Mr. Obama’s remarks appeared to be aimed at independent voters as well as at Congressional leaders, and stood in contrast to the Republican focus on the party’s conservative base, both in the budget showdown and in presidential politics…. – NYT, 7-12-11
• Boehner-Cantor rivalry affecting debt talks It’s not the first sign of friction between the two Republican leaders: The debt talks are not the first time friction has been apparent between House Speaker John A. Boehner, rear, and House Majority Leader Eric Cantor. (Win McNamee, Getty Images / July 12, 2011)
  A long-simmering rivalry between the top two Republicans in the House has tumbled into the open, with far-reaching implications for deficit-reduction negotiations with the White House.
  Speaker John A. Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) are at odds over President Obama’s call for a massive deficit-reduction package to address fiscal problems and provide for an increase in the country’s $14.3-trillion borrowing limit before an Aug. 2 deadline.
  In private talks with the White House, Boehner favored a large package as part of pragmatic political deal-making. But Cantor, speaking for staunch conservatives in Congress, is opposed.
  In a briefing Monday, Cantor downplayed the divisions, insisting repeatedly that he and the speaker were “on the same page.” But friction between the two has grown obvious, reinforcing months-old questions over who controls House Republicans.
  “I don’t think Boehner would want to serve in a foxhole anytime with Eric Cantor,” said a Republican strategist and former leadership aide who asked not to be identified while commenting on an intraparty rivalry…. – LAT, 7-12-11
• Budget Talks Beginning to Take On a Testy Air: Even before they gathered around a long table in the Cabinet Room for another round of budget negotiations on Monday, President Obama and Republican leaders began taking shots at one another.
  Mr. Obama declared at a news conference that he would not sign a “stopgap” measure to avert a federal default, and he challenged Republicans to “eat your peas” by supporting a large deficit-reduction deal. Speaker John A. Boehner countered that Republicans would not back a package with any tax increases, and said that even agreeing to an increase in the debt limit was a big concession.
  Once the private meeting actually started, the fireworks subsided, Democratic and Republican officials briefed on the talks said, though if anything, the debate over specific policy choices served only to reinforce the chasm between the two sides. The officials described a cordial, though intense, debate in which Mr. Obama and the eight leaders from both parties delved deeply into the nitty-gritty…. – NYT, 7-12-11
• With Boehner bailing, Cantor ascends as GOP voice: Now, it’s the Eric Cantor show. The House majority leader’s voice was heard most often in Sunday night and Monday afternoon debt-limit negotiations at the White House. It has been loud in opposition to changes in tax policy to add new revenue. And some Republicans said it sounds more in tune with the sentiment of the House GOP majority than Speaker John Boehner’s voice.
  For better or worse, Cantor owns the GOP’s spotlight in the debt-limit talks now that Boehner’s effort to fashion a groundbreaking “grand bargain” has fallen apart. It was Cantor who walked out on a commission led by Vice President Joe Biden when the topic of tax hikes was raised. And now Cantor is back in the driver’s seat because the talks have turned away from the big-dollar package that President Barack Obama and Boehner were negotiating and toward a smaller framework of spending cuts produced by the Biden talks.
  At a White House meeting on Monday, Cantor used color-coded spreadsheets to explain to the president and congressional leaders where he believes agreements on spending cuts had been reached by the Biden group.
  Boehner’s failed negotiations with Obama have given more stock to Cantor’s read about where the votes lie for a debt-limit deal, which, for the moment at least, is focused on the $1 trillion to $2 trillion in cuts identified by the Biden group.
  “It looks like he’s maybe listening to the rank and file a little bit more closely,” Rep. Raul Labrador, an Idaho Republican with strong tea party credentials, told POLITICO’s Arena on Monday. “He understands what the rank and file want.”… – Politico, 7-11-11
• Obama, Republicans trapped by inflexible rhetoric: President Barack Obama and GOP lawmakers, hundreds of billions of dollars short of their goal and seemingly trapped in inflexible bargaining positions, are struggling for agreement on $2 trillion-plus in budget cuts as the price for maintaining the government’s ability to borrow.
  Lawmakers were asked to return to the White House for talks Tuesday afternoon after a 90-minute Monday session produced no progress other than to identify the size of the gap between Republicans and Obama. Neither side showed any give that might generate hopes for a speedy agreement. Instead, Republicans again took a firm stand against revenue increases while Obama and his Democratic allies insisted that they be part of any equation that cuts programs like Medicare. “I do not see a path to a deal if they don’t budge, period,” Obama said.
  At the same time, the president turned up the pressure by announcing he won’t sign any short-term debt limit increases. “We are going to get this done,” Obama insisted during a news conference…. – AP, 7-11-11
• Boehner: Debt Ceiling Increase Obama’s Problem: House Speaker John Boehner is turning up the heat on President Obama, calling the debt-ceiling increase “his problem” and putting the onus on him to present a deficit-reduction plan that can pass Congress.
  Republicans in both chambers had tough words for the administration ahead of another White House sit-down Tuesday afternoon. On the Senate floor, GOP Leader Mitch McConnell accused the president and his party of “deliberate deception.”
  The comments may reflect increasing pressure from rank-and-file Republicans to press for deeper spending cuts and not cave in to the administration’s call for tax hikes.
  “The House Republicans have a plan. We passed our budget back in the spring, outlined our priorities. Where’s the president’s plan? When’s he going to lay his cards on the table?” Boehner said. “This debt limit increase is his problem and I think it’s time for him to lead by putting his plan on the table, something that the Congress can pass.”… – Fox News, 7-12-11
• Obama Takes Centrist Banner in Impasse Over Deficit: President Obama made no apparent headway on Monday in his attempt to forge a crisis-averting budget deal, but he put on full display his effort to position himself as a pragmatic centrist willing to confront both parties and address intractable problems.
  At a news conference preceding the latest round of debt-reduction talks with Republican and Democratic Congressional leaders, Mr. Obama said he would not accept a temporary agreement to kick the problem down the road a few weeks or months.
  He said that he was willing to take the heat from his own party to move beyond entrenched ideological positions and that Republicans should do the same. And he continued to insist on “the biggest deal possible,” saying that now is the best opportunity for the nation to address its long-term fiscal challenges.
  Republicans dismissed his performance as political theater. But Mr. Obama’s remarks appeared to be aimed at independent voters as well as at Congressional leaders, and stood in contrast to the Republican focus on the party’s conservative base, both in the budget showdown and in presidential politics.
  Mr. Obama’s remarks were among the clearest expressions yet of a repositioning effort that has been under way since the midterm elections last November, when Republicans captured the House and made inroads in the Senate.
  Seeking to shed the image of big-government liberal that Republicans used effectively against him last year, he has made or offered policy compromises on an array of issues and cast himself in the role of the adult referee for both parties’ gamesmanship, or the parent of stubborn children.
  “If we think it’s hard now, imagine how these guys are going to be thinking six months from now in the middle of election season where they’re all up,” he said. “It’s not going to get easier. It’s going to get harder. So we might as well do it now — pull off the Band-Aid, eat our peas.” He added, “We keep on talking about this stuff, and we have these high-minded pronouncements about how we’ve got to get control of the deficit and how we owe it to our children and our grandchildren. Well, let’s step up. Let’s do it. I’m prepared to do it. I’m prepared to take on significant heat from my party to get something done. And I expect the other side should be willing to do the same thing.”
  Mr. Obama did not shake Republicans’ resolve to oppose any increases in taxes for wealthy Americans and businesses, as he proposes. “Eat our peas?” asked a mocking news release from the office of Speaker John A. Boehner, Republican of Ohio, placing the blaming for the impasse on Mr. Obama for demanding “job crushing tax hikes.”… – NYT, 7-12-11
• Boehner-Cantor rivalry affecting debt talks It’s not the first sign of friction between the two Republican leaders: A long-simmering rivalry between the top two Republicans in the House has tumbled into the open, with far-reaching implications for deficit-reduction negotiations with the White House.
  Speaker John A. Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) are at odds over President Obama’s call for a massive deficit-reduction package to address fiscal problems and provide for an increase in the country’s $14.3-trillion borrowing limit before an Aug. 2 deadline.
  In private talks with the White House, Boehner favored a large package as part of pragmatic political deal-making. But Cantor, speaking for staunch conservatives in Congress, is opposed.
  In a briefing Monday, Cantor downplayed the divisions, insisting repeatedly that he and the speaker were “on the same page.” But friction between the two has grown obvious, reinforcing months-old questions over who controls House Republicans.
  “I don’t think Boehner would want to serve in a foxhole anytime with Eric Cantor,” said a Republican strategist and former leadership aide who asked not to be identified while commenting on an intraparty rivalry…. – LAT, 7-12-11
• Budget Talks Beginning to Take On a Testy Air: Even before they gathered around a long table in the Cabinet Room for another round of budget negotiations on Monday, President Obama and Republican leaders began taking shots at one another.
  Mr. Obama declared at a news conference that he would not sign a “stopgap” measure to avert a federal default, and he challenged Republicans to “eat your peas” by supporting a large deficit-reduction deal. Speaker John A. Boehner countered that Republicans would not back a package with any tax increases, and said that even agreeing to an increase in the debt limit was a big concession.
  Once the private meeting actually started, the fireworks subsided, Democratic and Republican officials briefed on the talks said, though if anything, the debate over specific policy choices served only to reinforce the chasm between the two sides. The officials described a cordial, though intense, debate in which Mr. Obama and the eight leaders from both parties delved deeply into the nitty-gritty.
  Mr. Obama, after restating his pitch for a far-reaching deal that could produce savings of $4 trillion or so over a decade, turned the floor over to the House majority leader, Representative Eric Cantor of Virginia. Mr. Cantor, Democratic officials said, presented a Republican proposal for a more modest agreement that drew heavily on earlier negotiations steered by Vice President Joseph R. Biden Jr…. – NYT, 7-12-11
• Delayed payments in 1979 offer glimpse of default consequences: In fact, there was one short-lived incident in the spring of 1979 that offers a glimpse of some of the problems and costs that might arise if the stalemate on Capitol Hill continues. Then, as now, Congress had been playing a game of chicken with the debt limit, raising it to $830 billion – compared with today’s $14.3 trillion – only after Treasury Secretary W. Michael Blumenthal warned that the country was hours away from the first default in its history…. – WaPo, 7-11-11
• David Frum: U.S. conservatives in denial over impact of debt default: The U.S. government is the largest purchaser of goods and services on planet Earth.
  The government buys everything from equipment for cancer research to metal for warships to toothpicks for federal cafeterias. Suppose the government had to cut 44% from its budget on two weeks notice? How sharp a shock would that be to the world economy?
  Here’s a comparative. In the worst quarter of 2009, American consumers cut their spending by … not 44%, not even 4.4%, but 1.2%. That 1.2% drop in consumer spending helped tumble the economy into the worst collapse since the 1930s.
  The U.S. consumer sector is even larger than the federal government sector. But it’s not unimaginably larger. U.S. consumers spend about $10 trillion a year. The federal government spends about $3.4 trillion.
  If a cut of 1.2% from $10 trillion was an economic shock, a cut of 44% from $3.4 trillion will be a much, much, much bigger shock.
  Yet a huge portion of conservative punditry this week amounts to a sustained denial of this seemingly self-evident arithmetic fact…. – National Post, 7-12-11Eric Cantor: We don’t believe you ought to be raising taxes right now, in this economy, and they do. That is the difference. If the President wants the debt ceiling raised, the House will not raise taxes. That is just what it is.John Boehner: “The president continues to insist on raising taxes, and [Democrats] are just not serious enough about fundamental entitlement reform to solve the problem. It takes two to tango, and they’re not there yet.” —

  Boehner says Dems not willing to make debt deal: Republican House Speaker says debt ceiling must be raised, but Democrats must get “serious” about entitlement reform, no tax hikes…. -

• CBS News, 7-11-11Obama rules out short-term deal on debt ceiling: President Obama said Monday that he would not consider stopgap measures to temporarily avert the debt-ceiling crisis, saying “that is just not an acceptable approach.”
  Obama spoke after Republicans rejected a deficit-reduction framework that would raise taxes and cut entitlements. “I continue to push congressional leaders for the largest possible deal,” Obama said at a White House news conference. He added, “I will not sign” a short-term extension.“This is the United States of America. We don’t manage our affairs in three-month increments. We don’t risk default on our obligations because we can’t put politics aside.” — Barack Obama
• Obama: Time to “eat our peas” and pass debt deal: President Obama is still seeking the largest deficit reduction deal possible as part of a package deal to raise the debt ceiling, he said in a press conference today.
  “I continue to push congressional leaders for the largest possible deal,” he said from the White House. “It is possible for us to construct a package that would be balanced, share sacrifice [and] would involve both parties taking on their sacred cows.”
  Mr. Obama would not even entertain the notion of failing to get a deal done before the end of the month. “We are going to get this done by August 2,” he said.
  Mr. Obama said today that he appreciated Boehner’s efforts to try to reach a large deal with him, but that the rest of the GOP must now step up to the plate.
  “I’ve been hearing from my Republican friends for some time it is a moral imperative to tackle our debt and deficits in a serious way,” Mr. Obama said. “What I’ve said to them is, let’s go.”
  The president said today he would not accept a smaller, short-term deal. “We might as well do it now,” he said. “Pull off the band aid. Eat our peas.”… – CBS News, 7-11-11
• At news conference, Obama portrays himself as compromiser-in-chief: President Obama says he will not sign a three to six-month bill to raise the nation’s debt ceiling and instead is calling on Republicans to set aside stubborn politics and agree on a long-term compromise before the country hits the debt limit Aug. 2.
  His administration is not making contingency plans for the event that Congress won’t vote to raise the debt ceiling in time, Obama told reporters this morning, predicting in a morning press conference that “we are going to get this done” before the deadline.
  As leaders prepared for an afternoon meeting at the White House, Obama pledged to bring Republicans and Democrats together “every single day” until they work out an agreement to avert a credit default with an agreement on debt and deficit reduction.
  Republicans have been saying for months that it’s a “moral imperative” for the president and Congress to tackle debts and deficits, Obama said, arguing that he has moved toward their position in hopes of working out a compromise.
  “What I’ve said to them is, ‘Let’s go,’” Obama said in a morning press conference in the White House briefing room. Such a deal would let Americans knows “this town can actually do something once in a while.”… – LAT, 7-11-11
• Obama Presses GOP for Big Deficit Deal: President Barack Obama on Monday said he won’t support a short-term deficit-cutting deal and continued to press for a more ambitious agreement involving taxes after a Sunday evening summit with congressional leaders failed to produce a deal.
  Mr. Obama, speaking at a televised news conference, said the American people feel a sense of urgency on the deficit talks and want results.
  The president insisted he wouldn’t support a short-term deal to raise the U.S. borrowing limit. “We don’t manage our affairs in three-month increments,” he said.
  Mr. Obama, speaking ahead of another negotiating session scheduled for 2 p.m. EDT Monday, said both sides have to move off their starting positions. “If not now, when?” He said later, it’s time to “pull off the Band Aid.”
  The main sticking points remain taxes and cuts to entitlement programs. Mr. Obama and Democrats are still pushing for a grand bargain that would slash about $4 trillion from the deficit over about 10 years. Republicans say such a package isn’t palatable because it includes tax increases that rank-and-file members won’t stomach.
  “I have bent over backwards to try to work with Republicans” on taxes, Mr. Obama said. He said he doesn’t favor tax increases, but wants to end a series of loopholes for oil and gas companies and the wealthy. Republicans have said ending tax subsidies and tax breaks amounts to tax increases. He said he is also willing to overhaul the tax code so long as it is “sufficiently progressive.”… – WSJ, 7-11-11
• Obama presses ahead with debt talks, warns against stopgap solution: President Obama, facing a bitter partisan stalemate over how to raise the federal borrowing limit, summoned congressional leaders to a new round of White House talks Monday and warned that he would not accept a temporary, stopgap measure.
  “That is not an acceptable approach,” he told a news conference ahead of the scheduled talks. “So we might as well do it now. Pull off the Band-Aid. Eat our peas. Now is the time to do it. If not now, when?”… – WaPo, 7-11-11
• Obama, leaders take last stab at $4 trillion deal: President Obama refused to back down Sunday night from seeking a landmark compromise that would slash about $4 trillion over 10 years from budget deficits and raise the government’s $14.3 trillion debt limit.
  President Obama meets with House Speaker John Boehner and Senate Majority Leader Harry Reid to negotiate the national debt.
  In a rare weekend meeting at the White House, Obama sought to convince recalcitrant lawmakers that tax increases on upper-income Americans and major cuts in popular health care and retirement programs still were within reach — despite Republicans’ pessimism. He will reiterate his case in a news conference this morning.
  Obama’s pitch didn’t convince congressional leaders. Senate GOP leader Mitch McConnell said Obama’s insistence on ending tax cuts for couples with income above $250,000 was a non-starter. House Democratic leader Nancy Pelosi raised doubts about proposed cuts to Medicare, Medicaid and Social Security.
  If Obama’s last-ditch effort fails, negotiators still could seek about $2.4 trillion in deficit reduction and an equal increase in the debt limit, enough to get them past the 2012 elections. They had agreed on about two-thirds of that amount in June when Republicans balked at new taxes and walked out.
  With three weeks left before the government can no longer borrow money, reaching even that lower threshold will be difficult, Treasury Secretary Timothy Geithner acknowledged Sunday…. – USA, 7-10-11
• Obama set for debt negotiations all week – official: President Barack Obama told top U.S. lawmakers on Sunday to be prepared to meet every day this week to hash out a deal to cut the federal budget and raise the debt limit, a Democratic source with knowledge of the talks said.
  The Democratic official said that Obama pressed Republicans at a White House meeting to aim for a broad, $4 trillion deficit-reduction package rather than a more modest one…. – Reuters, 7-11-11
• Debt Ceiling Negotiations Enter Round 3: The debt and deficit negotiations are now aimed at accomplishing two goals. The first goal for all sides sitting around the table is to get a deal in place by Aug. 2 to avoid any negative impact on the economy. The second goal, which is being pursued concurrently, is to emerge from the talks as the political winner. The latter clearly complicates the former.
  The eight Republican and Democratic congressional leaders will be back in the Cabinet Room in the White House Monday afternoon with President Obama and Vice President Joe Biden for their third such meeting over the last five days.
  The president continues to apply pressure on House Speaker John Boehner and his fellow Republicans by pushing for a “grand bargain” that includes entitlement reforms many in his own party oppose. With the president willing to put Medicare, Medicaid and Social Security on the chopping block, it begs the question of where Rep. Boehner is willing to compromise.
  But math is a stubborn thing. Boehner clearly came to the conclusion this weekend that he simply cannot pass a deal through his conference that includes any tax increases…. – PBS Newshour, 7-11-11
• US debt talks: ‘trust gap’ between negotiators, rank and file in Congress: Details of the US debt and deficit talks have been mostly secret, fueling concerns on both sides of the aisle that their leaders will compromise party values or give away too much…. – CS Monitor, 7-11-11

JULY 10, 2011: CONGRESSIONAL LEADERS MEET AGAIN AT WHITE HOUSE

“Congress has to act. If they don’t act, then we face catastrophic damage to the American economy, and the leadership, to their credit, and I mean Republicans and Democrats, fully understand that.” — Treasury Secretary Timothy F. Geithner said on the CBS News program “Face the Nation.”

“I disagree with that. I can tell you the president is determined to keep us there and make certain that we’re focused on the fact the decisions we make in that room will affect families across America and decide if this economy is going to recover. If we falter, if we don’t have sufficient political courage and will to get this done and this economy is going to be hurt then it is going to fall on our shoulders.” — Senate Majority Whip Dick Durbin, D-Ill.

“It’s disappointing that the president is unable to bring his own party around to the entitlement reform that he put on the table. And it’s baffling that the president and his party continue to insist on massive tax hikes in the middle of a jobs crisis while refusing to take significant action on spending reductions at a time of record deficits.” — Senate Minority Leader Mitch McConnell spokesman Don Stewart after Sunday evening’s White House meeting

 

• Obama, GOP back to where they started: The debt ceiling: It started with a simple objective: Raise the $14.3 trillion debt ceiling. Then the Republicans began demanding big budget cuts in exchange for increasing the debt ceiling. Then the Democrats began demanding higher taxes for wealthy in order to close the debt down the line.
  Now — given bleak prospects for a big deal involving all those elements, the so-called “grand bargain” — President Obama and the Republicans are back to where the started, trying to put together a new deal to raise the debt ceiling. Except that now they’re even closer to a government default on its existing debts…. – USA Today, 7-11-11
• Obama: ‘We need to’ work out debt deal in 10 days: Grasping for a deal on the nation’s debt, President Barack Obama and congressional leaders remained divided Sunday over the size and the components of a plan to reduce long term deficits. Saying “we need to” work out an agreement over the next 10 days, the president and lawmakers agreed to meet again Monday.
  Obama also sought to use the power of his office to sway public opinion, scheduling a news conference for Monday morning, his second one in less than two weeks devoted primarily to the debt talks.
  Officials familiar with the meeting said Obama pressed the eight House and Senate leaders Sunday evening to continue aiming for a massive $4 trillion deal for reducing the debt.
  But there appeared to be little appetite for such an ambitious plan and the political price it would require to pass in Congress. Instead, House Speaker John Boehner told the group that a smaller package of about $2 trillion to $2.4 trillion was more realistic…. – AP, 7-11-11
• With Debt Talks Stalled, What Happens Now?: According to various reports, both President Obama and Speaker of the House John Boehner were willing to go bold. A $4 trillion debt-reduction package, one that would include about $1 trillion in new revenue (tax increases) over ten years, was being discussed by the end of last week. But the House GOP revolted over the taxes, and Boehner, a reasonable person made powerless in the face of his no-compromise caucus, backed away from a grand bargain. So where does that leave us?
  July 22 has been previously identified as the latest a deal can be reached in order to give Congress enough time to write the law, vet it, and pass it, so time is of the essence. Obama will hold another press conference today to make his case to the media and the public as a way to pressure the GOP, after which another meeting will be held with congressional leaders of both parties. Republicans want a deal based on the $2 trillion to $2.4 trillion in spending cuts previously identified by the talks overseen by Joe Biden. But Chris Van Hollen, a top House Democrat, said only $1 trillion in cuts had been identified, and Republicans were “dreaming” if they thought the number was $2.4 trillion…. – NY Magazine, 7-11-11“We came into this weekend with the prospect that we could achieve a grand bargain. We are still hopeful for a large bipartisan agreement.” — House Minority Leader Nancy Pelosi
• Debt reduction talks in limbo as clock ticks toward Aug. 2 deadline: Talks among President Obama and congressional leaders Sunday evening failed to break a partisan stalemate over how to raise the federal borrowing limit, leaving the politically charged negotiations in limbo three weeks before the administration says the country will begin to default.
  The White House meeting adjourned after roughly 75 minutes without agreement over how far the parties should go in cutting the deficit over the next decade or whether tax cuts and entitlement reductions should be a part of any deal. Congressional leaders will return to the White House on Monday to continue talks, administration officials announced, and Obama will hold a morning news conference before they do.
  Both sides appeared Sunday to dig further into their positions, leaving the talks deadlocked, a historic default looming and a fragile economy increasingly vulnerable to the consequences of Washington’s entrenched partisanship and ideological divide over taxes and entitlements…. – WaPo, 7-10-11
• Geithner: We want ‘biggest deal possible’ on debt: Treasury Secretary Timothy Geithner says the Obama administration wants to seek “the biggest deal possible” on debt reduction…. – AP, 7-10-11
• For Boehner, Lofty Budget Goals Checked by Reality: At a private meeting about deficit reduction at the White House last week, Speaker John A. Boehner told his fellow Congressional leaders and President Obama that he did not spend 20 years working his way up to the top job on Capitol Hill just for the cachet of the title — he wanted to accomplish something big.
  So he and the president pursued an ambitious plan that would have reduced spending by as much as $4 trillion over 10 years. It was a transformative proposal, with the potential to improve the ugly deficit picture by shrinking the size of government, overhauling the tax code and instituting consensus changes to shore up Medicare and even Social Security. It was a once-in-a-decade opening.
  But the speaker’s lofty ambitions quickly crashed into the political reality of a divided, highly partisan Congress. His decision on Saturday night to abandon the comprehensive deficit-reduction package, citing the White House’s insistence on tax increases, was a sharp reversal. It highlighted the challenge he faces in persuading his party to tolerate any compromise on government spending and exposed the fissures within his own leadership team over how to proceed…. – NYT, 7-10-11
• Obama Leans on G.O.P. for a Deal on Debt Ceiling: President Obama tried on Sunday to revive the chances for a sweeping budget agreement to reduce the nation’s deficit and repair its perilous finances, but Congressional Republicans continued to balk, insisting on a more modest deal to avert a default on the national debt.
  Mr. Obama, meeting with leaders from both parties at the White House, bluntly challenged Republicans a day after Speaker John A. Boehner pulled back from a far-reaching agreement aimed at saving as much as $4 trillion over 10 years, officials briefed on the negotiations said. The meeting ended after an hour and 15 minutes with little progress, but the two sides agreed to resume talking Monday, and every day after that, until a deal is done.
  White House officials said Mr. Obama was still determined to pursue the boldest package possible — one that would require new tax revenue as well as cuts in Medicare and other entitlement programs — but he faces steadfast opposition from Republicans and growing qualms among Democrats…. – NYT, 7-10-11
• John Boehner’s ‘grand bargain’ – with House GOP: Speaker John Boehner’s decision not to “go big” on a debt-limit deal is the starkest demonstration yet of the limits of the Ohio Republican’s power.
  The internal GOP backlash against his efforts to secure a package of $4 trillion in spending cuts and revenue-raisers revealed that Boehner sometimes is little more than the first among equals — capable of synthesizing Republican sentiments but unwilling to drive them.
  Tax hikes, by any name, are a nonstarter for a party that forged its brand on the mantra of lower taxes and less government, and Boehner’s willingness to talk rates with President Barack Obama — particularly in the context of House Majority Leader Eric Cantor’s (R-Va.) refusal to do so — raised eyebrows within his conference. The uproar among Republicans, on and off Capitol Hill, forced Boehner to back away from the “grand bargain,” setting up a testy White House meeting where little was accomplished Sunday night…. – Politico, 7-11-11
• House, Senate leaders meet Sunday on debt talks: A group of top House and Senate leaders meet Sunday at the White House, a day after Republican negotiators abandoned plans to pursue a massive $4 trillion deficit reduction package in the face of stiff party opposition to any plan with tax increases as part of the deal.
  A deficit reduction deal is crucial to win Republican support for an increase in the nation’s debt ceiling. The government’s borrowing capacity is currently capped at $14.3 trillion and administration officials say it will go into default without action by Aug. 2. The Treasury Department says economic chaos could ensue if it can’t borrow more money.
  Both parties are under pressure from voters to resolve the debt crisis ahead of next year’s congressional and presidential elections. Obama is seen as a candidate that is tough to beat, though voters’ fears over the economy have been dragging down his numbers.
  Eight of the top House and Senate leaders were scheduled to meet at the White House in a negotiating session Sunday evening and lay out their remaining differences…. – AP, 7-10-11
• Obama, lawmakers to meet again as debt clock ticks: With pressuring continuing to build but no breakthroughs in sight, budget bargaining between President Barack Obama and top lawmakers resumes Monday at the White House, with both sides hoping to slash the deficit as the price for permitting the government to borrow more than $2 trillion to pay its bills.
  In a rare Sunday meeting in the White House Cabinet Room, Obama continued to push for a “grand bargain” in the range of $4 trillion worth of deficit cuts over the coming decade, but momentum is clearly on the side of a smaller measure of perhaps half that size. Obama continues to press for revenue increases as part of any agreement but Republicans remain stoutly opposed — despite some private hints to the contrary last week by House Speaker John Boehner, R-Ohio.
  Obama holds a news conference Monday morning. The third White House meeting since Thursday is slated for the afternoon…. – ap, 7-10-11
• Ross Douthat: The Method to Their Madness: The Republican Party’s strategy in the debt-ceiling negotiations has baffled centrists and vindicated liberals. For months, the party’s leaders have repeatedly turned down deals that would cut spending significantly because their members won’t compromise on taxes. To moderates, this intransigence is inexplicable: Are they crazy? To the left, it’s all-too-predictable: See, we told you they were crazy!
  But there is a method to the Republicans’ madness, and it rests on four things they know (or at least sense) about the deficit debate that the rest of the political class often ignores.
  Barack Obama wants a right-leaning deficit deal. For months, liberals have expressed frustration with the president’s deficit strategy. The White House made no effort to tie a debt ceiling vote to the extension of the Bush tax cuts last December. It pre-emptively conceded that any increase in the ceiling should be accompanied by spending cuts. And every time Republicans dug in their heels, the administration gave ground…. – NYT, 7-10-11
• Bruce Bartlett: Five myths about the debt ceiling: In recent months, the federal debt ceiling — last increased in February 2010 and now standing at $14.3 trillion — has become a matter of national debate and political hysteria. The ceiling must be raised by Aug. 2, Treasury says, or the government will run out of cash. Congressional Republicans counter that they won’t raise the debt limit unless Democrats agree to large budget cuts with no tax increases. President Obama insists that closing tax loopholes must be part of the package. Whom and what to believe in the great debt-limit debate? Here are some misconceptions that get to the heart of the battle….
  

  1. The debt limit is an effective way to control spending and deficits.
  2. Opposition to raising the debt limit is a partisan issue.
  3. Financial markets won’t care much if interest payments are just a few days late — a “technical default.”
  4. It’s worth risking default on the debt to prevent a tax increase, given the weak economy.
  5. Obama must accept GOP budget demands because he needs Republican support to raise the debt limit….

  - WaPo, 7-7-11

JULY 9, 2011: HOUSE SPEAKER JOHN BOEHNER ABANDONS COMPREHENSIVE DEBT DEAL

Boehner abandons efforts to reach comprehensive debt-reduction deal: House Speaker John A. Boehner (R-Ohio) abandoned efforts Saturday night to reach a comprehesive debt-reduction deal, telling President Obama that a mid-size package was the only politically possible alternative to avoid a first-ever default on the nation’s mounting national debt.

“Despite good faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure.” — John Boehner

“Both parties have made real progress thus far, and to back off now will not only fail to solve our fiscal challenge, it will confirm the cynicism people have about politics in Washington. The president believes that now is the moment to rise above that cynicism and show the American people that we can still do big things. And so tomorrow, he will make the case to Congressional leaders that we must reject the politics of least resistance and take on this critical challenge.” — Dan Pfeiffer, the White House communications director, White House Statement

 

• Boehner abandons goal of $4 trillion debt-reduction package: House Speaker John Boehner, Republican of Ohio, abandoned efforts last night to reach a comprehensive debt-reduction deal worth more than $4 trillion in savings, telling President Obama that a midsize package was the only politically possible alternative to avoid a first-ever default on the nation’s mounting national debt.
  Boehner told Obama – who is hosting a key meeting tonight on the debt issue – that their efforts to “go big,’’ as the speaker says, were stymied by the toughest issues: taxes and entitlements.
  Democrats continued to insist on tax changes that would not pass muster in the conservative-dominated House, and Republicans wanted cuts to programs such as Medicare and Social Security that Obama and Senate Democrats would oppose.
  “Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase,” Boehner said…. – Boston Globe, 7-9-11
• Deficit Talks Scaled Back Over Tax Increases: Citing differences over tax revenues, House Speaker John A. Boehner said on Saturday night that he would pull back from joint efforts with President Obama to reach a sweeping $4 trillion deficit-reduction plan tied to a proposal to increase the federal debt limit.
  On the eve of a second round of high-level bipartisan talks set for Sunday, Mr. Boehner issued a statement saying he would now urge negotiators to instead focus on crafting a smaller package more in line with the $2 trillion to $3 trillion in spending cuts and revenue increases negotiated earlier by Vice President Joseph R. Biden Jr.
  “Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes,” Mr. Boehner said. “I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase.”
  The decision was a major reversal for Mr. Boehner, a veteran Congressional deal-maker who along with Mr. Obama had been the major advocate for seeking a far-reaching deal that would have combined a debt limit increase with substantial spending cuts, significant changes in social programs like Medicare, Medicaid and perhaps Social Security, and as much as $1 trillion in new revenues. Following a secret meeting between the two last weekend, Mr. Obama went public with his own call for a broad package…. – NYT, 7-9-11
• Social Security: the political monster that lurks in debt talks: Long the “third rail” of politics, Social Security has emerged as a part of bipartisan talks aimed at stabilizing America’s public debt. Will it finally be restructured to reflect today’s economy?… – CS Monitor, 7-9-11

JULY 8, 2011: 1ST CONGRESSIONAL LEADERS WHITE HOUSE MEETING

 

• Debt Deal Could Rewrite 2012 Political Calculus: Are the far right and far left in Washington about to be thrown under the bus? The assumption for months has been that Democrats would play to their base during the 2012 election cycle, using the specter of tax cuts for the rich and Medicare cuts to rally liberals behind President Obama and Democratic candidates.
  On the right, it seemed certain that Republican presidential hopefuls and Congressional candidates would pander to the Tea Party wing of their party with demands for ever greater spending cuts and “read my lips” declarations when it comes to the idea of higher taxes.
  But what if Mr. Obama and House Speaker John A. Boehner turn that political calculation on its head?
  Negotiations over the nation’s deficit and debt suggest that both men are looking beyond the wishes of their most ardent supporters toward the larger, more moderate parts of the electorate. What could emerge in the next few days is a package that infuriates the right by raising the debt ceiling, disappoints the left by cutting Medicare, and gets passed largely by politicians who are willing to compromise…. – NYT, 7-8-11Remarks by the President on the Status of Efforts to Find a Balanced Approach to Deficit Reduction James S. Brady Press Briefing Room: 1:02 P.M. EDT
  

  THE PRESIDENT: Hello, everybody. I’m going to make a very brief statement.
  I just completed a meeting with all the congressional leaders from both chambers, from both parties, and I have to say that I thought it was a very constructive meeting. People were frank. We discussed the various options available to us. Everybody reconfirmed the importance of completing our work and raising the debt limit ceiling so that the full faith and credit of the United States of America is not impaired.
  What we decided was that staffs, as well as leadership, will be working during the weekend, and that I will reconvene congressional leaders here on Sunday with the expectation that, at that point, the parties will at least know where each other’s bottom lines are and will hopefully be in a position to then start engaging in the hard bargaining that’s necessary to get a deal done.
  I want to emphasize that nothing is agreed to until everything is agreed to. And the parties are still far apart on a wide range of issues. But, again, I thought that all the leaders here came in a spirit of compromise, in a spirit of wanting to solve problems on behalf of the American people. Everybody acknowledged that the issue of our debt and our deficit is something that needs to be tackled now. Everybody acknowledged that in order to do that, Democrats and Republicans are going to be required in each chamber. Everybody acknowledged that we have to get this done before the hard deadline of August 2nd to make sure that America does not default for the first time on its obligations. And everybody acknowledged that there’s going to be pain involved politically on all sides, but our biggest obligation is to make sure that we’re doing the right thing by the American people, creating an environment in which we can grow the economy and make sure that more and more people are being put back to work.
  So I want to thank all the leaders. I thought it was a very constructive meeting. And I will be seeing them back here on Sunday. A lot of work will be done between now and then.

  END 1:05 P.M. EDT — WH, 7-11-11

JULY 5, 2011: OBAMA’S SUMMONS CONGRESS

John Boehner: “I’m pleased the president stated today that we need to address the big, long-term challenges facing our country.”

 

• Obama Summons G.O.P. and Democratic Leaders for Deficit Reduction Talks: President Obama stepped up pressure on Congressional Republicans on Tuesday to agree to a broad deficit-cutting deal, pledging to put popular entitlement programs like Medicare on the table in return for Republican acquiescence to some higher taxes. In the Senate, Jeff Sessions, Republican of Alabama, spoke to other members of the Senate Budget Committee.
  Mr. Obama, who met secretly with Speaker John A. Boehner at the White House on Sunday to try to advance the talks, called House and Senate leaders from both parties to the White House for further negotiations on Thursday. And he rejected talk of an interim deal that would get the government past a looming deadline on raising the federal debt limit without settling some of the longer-term issues contributing to the government’s fiscal imbalances.
  “We’ve got a unique opportunity to do something big, to tackle our deficit in a way that forces our government to live within its means,” he said in an appearance in the White House briefing room, casting himself as much an honest broker as a partisan participant in the talks. “This will require both parties to get out of our comfort zones, and both parties to agree on real compromise.”… – NYT, 7-6-11
• Can President Obama just ignore the debt limit?: Some economists suggest that the 14th Amendment renders the debt limit conversation moot (and maybe unconstitutional): the US must pay its debts. Period…. – CS Monitor, 7-5-11
• Can President Obama jump-start debt talks?: President Obama has invited congressional leaders to the White House Thursday to try to resolve the stalemate over raising the debt limit. The deadline for a deal is Aug. 2…. – CS Monitor, 7-5-11
• Summoning lawmakers, Obama seeks to break debt impasse: The president will meet with House and Senate leaders of both parties to try to end a standoff on raising the national debt limit…. – LAT, 7-5-11Remarks by the President on the Status of Efforts to Find a Balanced Approach to Deficit Reduction: James S. Brady Press Briefing Room
  4:49 P.M. EDT

  THE PRESIDENT: All right. Hello, everybody. I just wanted to give you an update on the deficit negotiations that we’ve been having for the last several weeks, and I want to wish, again, everybody a Happy Fourth of July.
  Over the July Fourth weekend, my team and I had a series of discussions with congressional leaders in both parties. We’ve made progress, and I believe that greater progress is within sight, but I don’t want to fool anybody — we still have to work through some real differences.
  Now, I’ve heard reports that there may be some in Congress who want to do just enough to make sure that America avoids defaulting on our debt in the short term, but then wants to kick the can down the road when it comes to solving the larger problem of our deficit. I don’t share that view. I don’t think the American people sent us here to avoid tough problems. That’s, in fact, what drives them nuts about Washington, when both parties simply take the path of least resistance. And I don’t want to do that here.
  I believe that right now we’ve got a unique opportunity to do something big — to tackle our deficit in a way that forces our government to live within its means, that puts our economy on a stronger footing for the future, and still allows us to invest in that future.
  Most of us already agree that to truly solve our deficit problem, we need to find trillions in savings over the next decade, and significantly more in the decades that follow. That’s what the bipartisan fiscal commission said, that’s the amount that I put forward in the framework I announced a few months ago, and that’s around the same amount that Republicans have put forward in their own plans. And that’s the kind of substantial progress that we should be aiming for here.
  To get there, I believe we need a balanced approach. We need to take on spending in domestic programs, in defense programs, in entitlement programs, and we need to take on spending in the tax code — spending on certain tax breaks and deductions for the wealthiest of Americans. This will require both parties to get out of our comfort zones, and both parties to agree on real compromise.
  I’m ready to do that. I believe there are enough people in each party that are willing to do that. What I know is that we need to come together over the next two weeks to reach a deal that reduces the deficit and upholds the full faith and credit of the United States government and the credit of the American people.
  That’s why, even as we continue discussions today and tomorrow, I’ve asked leaders of both parties and both houses of Congress to come here to the White House on Thursday so we can build on the work that’s already been done and drive towards a final agreement. It’s my hope that everybody is going to leave their ultimatums at the door, that we’ll all leave our political rhetoric at the door, and that we’re going to do what’s best for our economy and do what’s best for our people.
  And I want to emphasize — I said this at my press conference — this should not come down to the last second. I think it’s important for us to show the American people and their leaders that we can find common ground and solve our problems in a responsible way. We know that it’s going to require tough decisions. I think it’s better for us to take those tough decisions sooner rather than later.
  That’s what the American people expect of us. That’s what a healthy economy is going to require. That’s the kind of progress that I expect to make. So I promise I will keep you guys updated as time goes on. All right?
  Q A couple of questions?
  Q Will you take any questions, Mr. President?
  THE PRESIDENT: I guarantee you, Jay is going to take a whole bunch of them. (Laughter.)

  END 4:54 P.M. EDT

  In debt talks, Obama offers Social Security cuts: President Obama is for the first time offering to tackle the rising cost of Social Security as part of a far-reaching plan to restrain the spiraling national debt, according to people in both parties familiar with the proposal.
  The move marks a major shift for the White House and could present a direct challenge to Democratic lawmakers who have vowed to protect health and retirement benefits from a Republican assault on government spending.

• President Looks for Broader Deal on Deficit Cuts: Heading into a crucial negotiating session on a budget deal on Thursday, President Obama has raised his sights and wants to strike a far-reaching agreement on cutting the federal deficit as Speaker John A. Boehner has signaled new willingness to bargain on revenues.
  Mr. Obama, who is to meet at the White House with the bipartisan leadership of Congress in an effort to work out an agreement to raise the federal debt limit, wants to move well beyond the $2 trillion in savings sought in earlier negotiations and seek perhaps twice as much over the next decade, Democratic officials briefed on the negotiations said Wednesday.
  The president’s renewed efforts follow what knowledgeable officials said was an overture from Mr. Boehner, who met secretly with Mr. Obama last weekend, to consider as much as $1 trillion in unspecified new revenues as part of an overhaul of tax laws in exchange for an agreement that made substantial spending cuts, including in such social programs as Medicare and Medicaid and Social Security — programs that had been off the table…. – NYT, 7-6-11
• Obama, Democrats not ready to play 14th Amendment card with debt ceiling: Law professors, Democratic senators and liberal commentators have recently raised a tantalizing possibility for ending the congressional wrangling over raising the federal limit on borrowing: President Obama could simply declare the debt ceiling unconstitutional and be done with it.
  Advocates of this approach cite the 14th Amendment of the Constitution, which states that the “validity of the public debt of the United States . . . shall not be questioned.”
  On Wednesday at a White House question-and-answer session held via the Web service Twitter, Obama said the debate over raising the $14.3 trillion debt ceiling shouldn’t become a constitutional question.
  “I don’t think we should even get to the constitutional issue. Congress has a responsibility to make sure we pay our bills. We’ve always paid them in the past,” Obama said. “The notion that the U.S. is going to default on its debt is just irresponsible.”… – WaPo, 7-6-11

Political Buzz July 15, 2011: Debt Ceiling Showdown: Second Week of White House Debt Talks — Obama Sets Debt Deal Limit T-36

POLITICAL BUZZ

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

THE HEADLINES: DEBT CEILING SHOWDOWN: OBAMA VS CONGRESSIONAL LEADERS

President Obama meets with (L-R) House Majority Leader Rep. Eric Cantor (R-VA), House Minority Leader Rep. Nancy Pelosi (D-CA), Speaker of the House Rep. John Boehner (R-OH), and Senate Majority Leader Sen. Harry Reid (D-NV) in the Cabinet Room of the White House, July 11, 2011 in Washington, D.C. (Getty)

• Timeline: Debt debate: President Barack Obama and top lawmakers will meet again Monday in search of a deal on slashing the U.S. budget deficit and raising the $14.3 trillion debt ceiling before the United States defaults.
  Obama wants to strike a deal well before August 2, when the Treasury Department says it will no longer be able to honor its obligations and issue new bonds without breaching the limit that Congress set on how much the United States can borrow.
  Republican and Democratic lawmakers say any increase must include measures to ensure the country’s debt remains at a sustainable level. The debt-reduction debate is a sharp shift for Washington, which less than a year ago was focused on additional deficit spending to lower the unemployment rate.
  Following is a timeline of the debate…. – Reuters, 7-11-11
• Factbox: What’s on the table in debt talks: President Barack Obama and congressional leaders resume their White House talks on Monday to see if they have the makings of a deal to trim budget deficits and avert a looming default.
  The Treasury Department has warned it will run out of money to cover the country’s bills if Congress does not raise the $14.3 trillion debt ceiling by August 2.
  Although Democrats and Republicans agree on the need for trillions of dollars in budget savings, they remain sharply divided about how to get there.
  Following is a summary of the debate… – Reuters, 7-11-11
• Obama on debt ceiling: Is he winning over Americans?: An increasing number of Americans are concerned about the consequences of not raising the debt ceiling, according to a new poll. President Obama has been blunt about the consequences of default…. – CS Monitor, 7-12-11“We might as well do it now — pull off the Band-Aid; eat our peas.” – President Barack Obama“I know you all love to write the soap opera here.” — Eric Cantor (R-Va.), joking about the Republican-Democrat split.“It’s time for tough love. Don’t let them scare you by telling you that the country’s going to fall apart.” — Michele Bachmann (R-Minn.), speaking to a cheering crowd in Iowa over the weekend.“I hope and pray and believe they should not raise the debt ceiling. These historic, dramatic moments where you can draw a line in the sand and force politicians to actually do something bold and courageous are important moments.” – Tim Pawlenty, Former Minnesota governor“A cataclysmic game of chicken. Negotiating with a gun to your head. A Thelma & Louise-style full throttle off a cliff.” — John Avlon at the Daily Beast, on the “dire metaphors” for the debate.

  “The debt ceiling is a gut-check time for all Republicans on spending and size of government. … Apparently, Gov. Romney is still checking his gut to figure out where he should stand.” — Alex Conant, spokesman for former Minnesota Gov. Tim Pawlenty.

  “You and I have decided to have lunch together today. We both need lunch. We both know we’re going to have lunch. But we don’t agree on where to eat. So you propose Mexican, but I counter with Chinese, and warn that if you refuse, neither of us will get to eat lunch ever again. Deal? … Of course not. But that’s pretty much the GOP’s strategy on the debt-ceiling negotiation.” — Ezra Klein on the partisan bickering

  “It’s a hostage negotiation! It’s a lunch conversation! No, it’s the debt ceiling debate.” — Eric Thompson at the Atlantic, on how to characterize the debt ceiling.

  “We are at each others throats more than is necessary.” — Jeff Immelt, chairman of Obama’s outside panel of economic advisers, calling the White House and Congress to strike a deal on Monday.

JULY 14, 2011: PRESIDENT OBAMA SETS DEBT DEAL TIME LIMIT T-36 HOURS

“It’s decision time. We need concrete plans to move this forward.” — President Barack Obama

“We’ve looked at all available options, and we have no way to give Congress more time to solve this problem. The eyes of the country are on us, and the eyes of the world are on us, and we need to make sure that we stand together and send a definitive signal that we are going to take the steps necessary to avoid default.” — Treasury Secretary Timothy F. Geithner

• ‘Decision Time’ on Budget, Obama Tells Leaders: President Obama threw the deadlocked budget negotiations back to Congress on Thursday, telling Republicans and Democrats to try to work out an agreement to avert a government default, and suggesting that more ambitious efforts to cut the deficit had hit a wall.
  After a polite but inconclusive session that covered familiar ground and made no headway, Mr. Obama told the Congressional leaders to confer with their rank-and-file members over the next 24 to 36 hours to “figure out what can get done,” said a Democratic official briefed on the negotiations.
  The president said he might summon the leaders to the White House over the weekend if there was no progress; he has scheduled a news conference for Friday morning to argue his case publicly. On Capitol Hill, leaders of both parties were focused increasingly on a proposal by the Senate Republican leader, Mitch McConnell of Kentucky, that could provide a way out of the stalemate on the debt limit…. – NYT, 7-14-11
• Obama gives leaders ’24 to 36 hours’ to come to debt agreement: President Obama told congressional leaders at their latest debt-limit meeting that they must come to an agreement on the way forward by early Saturday morning or else they will be called back to the White House this weekend, aides from both parties with knowledge of the meeting said Thursday evening.
  At a meeting that lasted 80 minutes, congressional negotiators and the White House finished their review of the work done by a group led by Vice President Biden, said the aides, who were not authorized to speak publicly about the meeting.
  At the end, Obama told the bipartisan leaders that, over the next 24 to 36 hours, he wanted them to indicate a path forward that would be able to pass both chambers.
  No White House meeting is set for Friday. Instead, leaders are expected to go to their rank-and-file members to discuss the negotiations.
  Thursday’s meeting ended at 5:43 p.m. Shortly afterwards, the White House announced that Obama would hold a news conference at 11 a.m. Friday…. – WaPo, 7-14-11
• Looking for debt deal, Obama outlines cuts: President Obama implored congressional leaders Thursday to reach a deal on raising the nation’s $14.3 trillion borrowing limit by this weekend to reassure jittery world financial markets, and he suggested he could settle for a smaller deficit-reduction package than he originally sought.
  Rather than continue to push for $4 trillion in savings over the next decade, Obama outlined a plan that would achieve roughly $2 trillion, almost entirely from spending reductions. That marks a major concession — one the president is likely to address at a news conference scheduled for 11 a.m. ET this morning.
  At the same time, Senate Republican leader Mitch McConnell and Democratic leader Harry Reid forged ahead with an even smaller deal of their own, one that represents a second fallback plan. It would allow Obama to raise the debt limit and create a process by which Congress would vote in the future on spending reductions…. – USA Today, 7-14-11
• As White House talks falter, Senate works on agreement to raise debt limit: President Obama prepared Thursday to bring bipartisan talks over the debt to a close, as Senate leaders worked across party lines to craft an alternative strategy to raise the nation’s $14.3 trillion debt limit and avert a government default.
  “It’s decision time,” Obama told congressional leaders after meeting at the White House for a fifth straight day. Obama gave Republicans until early Saturday to tell him whether any of three options for trimming the federal budget would win GOP support.
  “We need concrete plans to move this forward,” he said.
  A breakthrough in the White House talks looked unlikely, however, leaving the Senate framework as the chief option for raising the debt limit before Aug. 2, when the Treasury will be unable to pay its bills without additional borrowing authority.
  That deadline loomed ever larger Thursday, as China, the U.S. government’s largest foreign creditor, called on U.S. policymakers to take action to protect the interests of investors. Federal Reserve Board Chairman Ben S. Bernanke warned that failure to raise the debt ceiling would amount to “a self-inflicted wound” that would cause “a very severe financial shock” to the global economy. And Treasury Secretary Timothy F. Geithner told lawmakers that they are running out of time…. – WaPo, 7-14-11
• Obama, lawmakers face fresh doubts on debt deal: President Barack Obama and top Republicans faced growing pressure at home and abroad on Thursday to stop deficit talks from spiraling out of control and sending shockwaves through the global financial system.
  Markets reacted skittishly after the fourth straight day of talks between Obama and congressional leaders hit a new low on Wednesday, while divisions within the Republican party seemed to increase the difficulty of striking a deal to extend the nation’s borrowing authority and avoid a default after August 2.
  The Democratic president clashed with Republican lawmakers during an acrimonious two-hour White House session on Wednesday that produced no progress toward a deal. A leading Republican said Obama walked out of the meeting.
  Treasury Secretary Timothy Geithner met with Democratic senators and urged quick action, saying “we are running out of time.”… – Reuters, 7-14-11
• GOP threatens to bolt on McConnell’s plan: “I would say, ‘No way,’” said Ohio Rep. Jim Jordan, chairman of the conservative Republican Study Committee, whose members constitute roughly three-quarters of the House GOP.
  “Everybody I’ve talked to over here says, ‘No way,’” said Florida Rep. Tom Rooney, a member of the vote-counting whip team.
  But earlier in the day, Boehner declined to pronounce the death of McConnell’s plan, which has gained some traction in the Senate and is being held in reserve as a last-resort option to avoid an economic disaster. Rather than getting a vote as is, the plan will more likely move forward in another form or alongside appetizing additives intended to help Republicans in both chambers digest the debt hike and a cession of power to the president.
  “Mitch described his proposal as a last-ditch effort in case we’re unable to do anything else,” Boehner told reporters Thursday. “And what may look like something less than optimal today, if we are unable to reach an agreement, might look pretty good a couple of weeks from now. I think it’s worth keeping on the table. There are a lot of options that people have floated. And frankly, I think it’s an option that may be worthy at some point.” Boehner said he has “no idea” whether McConnell’s plan will pass his chamber. Several GOP lawmakers said privately that it stands no chance…. – Politico, 7-14-11
• With no debt deal, Obama would face tough choices Aug. 3 about what bills to pay: What happens if President Obama and Congress don’t strike a debt deal? On Aug. 3, the nation would find out, with Obama forced to make a set of extraordinarily difficult choices about what to pay or not pay. By then, the government’s savings account would be nearly empty and the president would be relying on daily tax revenue to pay the nation’s bills.
  There wouldn’t be enough — in fact, there would be a $134 billion shortfall in August alone.
  As Obama decided what to pay, he would choose among Social Security checks, salaries for members of the military and veterans, unemployment benefits, student loans, and many other government programs, according to administration officials and an independent analysis by a former senior Treasury Department official in the George H.W. Bush administration.
  To protect the nation’s creditworthiness, Obama would have to balance those priorities with the imperative of making payments to investors in U.S. government bonds — ranging from domestic pension funds to the Chinese government…. – WaPo, 7-13-11

JULY 13, 2011: 5TH WHITE HOUSE MEETING; OBAMA & CANTOR SPAR, PRESIDENT WALKS OUT

“I’ve reached my limit. This may bring my presidency down, but I will not yield on this… Enough is enough. … I’ll see you all tomorrow.” — President Barack Obama

Cantor said the president became “agitated” and warned the Virginia Republican not to “call my bluff” when Cantor said he would consider a short-term debt-limit hike. The meeting “ended with the president abruptly walking out of the meeting,” Cantor told reporters in the Capitol. “I know why he lost his temper. He’s frustrated. We’re all frustrated.”

• Obama ends talks brusquely: President Barack Obama has ended a nearly two hour debt-limit negotiation brusquely, declaring: “Enough is enough” as he rejected Republican demands that he accept a short-term extension of the government’s borrowing authority.
  Democratic officials and Republican aides familiar with the negotiations say the meeting ended after White House officials had identified more than $1.5 trillion in spending cuts over 10 years to reduce the deficit. Pressed by House Republican leader Eric Cantor to accept only months-long debt ceiling increase, Democratic officials say Obama announced: “Enough is enough. We have to be willing to compromise. It shouldn’t be about positioning, and politics and I’ll see you all tomorrow.”… – AP, 7-13-11
• Tempers flare as debt talks get tense at White House:
  

  Obama vows to veto any short-term extension, even at risk to his presidency, sources say Cantor, Boehner seek a short-term debt ceiling hike opposed by Obama Moody’s puts U.S. bond rating under review The United States must raise its $14.3 trillion debt ceiling by August 2 or risk a default

  A fifth session of talks in five days is set for Thursday to head off a possible government default. Wednesday’s session ended on a tense note with House Majority Leader Eric Cantor and President Barack Obama squaring off over the Republican’s call for a short-term extension of the federal debt ceiling.
  At one point, Obama said the political wrangling confirmed what the public considers to be the worst of Washington, according to Democratic sources familiar with the talks who spoke on condition of not being identified.
  Multiple sources, also speaking on condition of anonymity, said Obama told the gathering that “this could bring my presidency down,” referring to his pledge to veto any short-term extension of the debt ceiling. Sources say he vowed, “I will not yield on this.”
  Obama to Cantor: Don’t call my bluff
  The exchange concluded almost two hours of talks that failed to achieve a breakthrough….. – CNN, 7-14-11

• President Obama abruptly walks out of debt ceiling talks: President Barack Obama abruptly walked out of a stormy debt-limit meeting with congressional leaders Wednesday, a dramatic setback to the already shaky negotiations.
  “He shoved back and said ‘I’ll see you tomorrow’ and walked out,” House Majority Leader Eric Cantor (R-Va.) told reporters in the Capitol after the meeting.
  On a day when the Moody’s rating agency warned that American debt could be downgraded, the White House talks blew up amid a new round of sniping between Obama and Cantor, who are fast becoming bitter enemies.
  When Cantor said the two sides were too far apart to get a deal that could pass the House by the Treasury Department’s Aug. 2 deadline — and that he would consider moving a short-term debt-limit increase alongside smaller spending cuts — Obama began to lecture him.
  “Eric, don’t call my bluff,” the president said, warning Cantor that he would take his case “to the American people.” He told Cantor that no other president — not Ronald Reagan, the president said — would sit through such negotiations.
  Democratic sources dispute Cantor’s version of Obama’s walk out, but all sides agree that the two had a blow up. The sources described Obama as “impassioned” but said he didn’t exactly storm out of the room.
  “Cantor’s account of tonight’s meeting is completely overblown. For someone who knows how to walk out of a meeting, you’d think he’d know it when he saw it,” a Democratic aide said. “Cantor rudely interrupted the president three times to advocate for short-term debt ceiling increases while the president was wrapping the meeting. This is just more juvenile behavior from him and Boehner needs to rein him in, and let the grown-ups get to work.”
  On exiting the room, Obama said that “this confirms the totality of what the American people already believe” about Washington, according to a Democratic official familiar with the negotiations, and that officials are “too focused on positioning and political posturing” to make difficult choices.
  Cantor insists he never interrupted the president, and was “deferential,” seeking permission to speak…. – Politico, 7-13-11
• ‘Enough is enough,’ Obama says, calling for deal: Amid new warnings and fresh signs of strain, President Barack Obama and congressional leaders are entering a perilous debt-limit endgame. The president, declaring “enough is enough,” is demanding that budget negotiators find common ground by week’s end even as the Senate’s top Republican gained followers for his own last-ditch scheme to avoid a government default.
  The continuing impasse was unsettling Wall Street, which up to now had performed as if an increase in the debt ceiling was not in doubt. And the looming Aug. 2 cutoff for action was creating new tensions between the president and Republican leaders.
  Moody’s Investors Service said Wednesday it will review the government’s credit rating, noting there is a small but rising risk that the government will default on its debt. If Moody’s were to lower the ratings, the consequences would ripple through the economy, pushing up rates for mortgages, car loans and other debts. A Chinese rating agency, Dagong Global Credit Rating Co., also warned of a possible downgrade.
  Federal Reserve Chairman Ben Bernanke, addressing lawmakers, warned Wednesday that not increasing the nation’s debt ceiling and allowing the nation default on its debt would send “shock waves through the entire financial system.”
  And in the cauldron of the White House Cabinet Room, Obama and top lawmakers bargained for nearly two hours Wednesday on spending cuts. Obama curtly ended the session when House Majority Leader Eric Cantor, R-Va., urged Obama to accept a short, monthslong increase in debt instead of one that would last through next year’s presidential election.
  “Enough is enough. … I’ll see you all tomorrow,” Obama said, rising from the negotiating table and leaving the room, according to several officials familiar with the session…. – AP, 7-14-11
• Moody’s moves one step closer to downgrading U.S. debt: Moody’s Investors Service said Wednesday it has put the U.S. government’s top-notch credit rating on review for a possible downgrade because of the risk that Washington will not raise the federal debt ceiling in time to avoid a default.
  The firm added that even a brief failure of the government to pay its bills would mean that the United States’s Aaa rating “would likely no longer be appropriate.”
  The announcement comes after Standard & Poor’s, another of the major credit rating agencies, has said that it would dramatically downgrade the U.S. government’s credit rating if payments were missed.
  The U.S. has long been able to borrow money cheaply because global investors believe the government can be counted on to repay its debts. If credit rating agencies downgrade the U.S. and investors lose their faith in the creditworthiness of the government, the cost of borrowing money — in other words, the interest rate — could rise…. – WaPo, 7-13-11
• Eric Cantor walks tightrope with GOP: As he has surged to the forefront of debt-limit negotiations and faced round-the-clock scrutiny on cable and radio talk shows, a fundamental question about House Majority Leader Eric Cantor’s high-stakes political maneuvering is being discussed in the halls of power.
  Is he building street cred with House Republicans or overplaying his hand? The answer may be both. Cantor’s allies note that he’s been put in the spotlight by assignment — from Speaker John Boehner and President Barack Obama — not by choice. And they say he has gained political capital within the GOP conference.
  Cantor has a lot riding on the outcome of the debt-limit negotiations. He’ll share in the public blame if they fall apart and the economy tanks, and he’ll face recriminations from his conservative base in the House if he cuts too soft a deal with the president.
  Still, there’s little question that Republicans, led by Cantor’s steadfast loyalty to their bottom line, have forced the debt-limit debate to be framed in terms of trillions in cuts instead of the clean debt increase Obama originally wanted.
  With only 22 percent of respondents supporting a vote in favor of the debt increase according to a Gallup Poll, Republicans believe they’re on firm footing with voters as they push for historically deep spending cuts…. – Politico, 7-13-11
• Debt stalemate – who budges first? – Politico Arena, 7-13-11

JULY 12, 2011: REPUBLICAN SENATE MINORITY LEADER MITCH MCCONNELL’S DEBT PLAN FOR OBAMA

“After years of discussions and months of negotiations, I have little question that as long as this president is in the Oval Office, a real solution is probably unattainable.” — Senate Republican Leader Mitch McConnell said in remarks on the Senate floor

• McConnell’s last ditch debt ceiling plan: What’s in it for Republicans?: Senate Republican leader Mitch McConnell proposes a ‘last choice option’ that would allow President Obama to raise the national debt ceiling without GOP support.
  In a surprise move, Senate Republican leader Mitch McConnell on Tuesday proposed a “last choice option” to avoid default on the national debt that would require the support of just over a third of the House and Senate to raise the national debt ceiling.
  The McConnell proposal, which requires special legislation to be adopted, gives the president expedited procedures to increase the debt limit by as much as $2.4 trillion that require only submission of a plan to reduce spending by a greater amount. There is no requirement that Congress actually pass those spending cuts.
  But even if the cuts are never passed, the proposal has two political advantages for Republicans: It forces President Obama to lay out his proposed spending cuts in writing, a longtime GOP demand. And it absolves Republicans of responsibility for sending the nation into its first-ever default, as early as Aug. 2…. – CS Monitor, 7-12-11
• A Pathway Out of the Debt Crisis: Political gain, not economic sense or sound policy, has always been at the core of Republican strategy on the debt-ceiling talks — a cynical ploy to appear serious about cutting spending while actually holding hostage the nation’s strong credit rating. Now that the real risks to their strategy are becoming apparent, including the possibility of cutting off Social Security checks, the more experienced members of the party are beginning to rethink their plans.
  On Tuesday, Senator Mitch McConnell, the Republican leader, proposed a convoluted fallback solution that would at least defuse the crisis his party created a few weeks ago by threatening to force the country into default on its national debts. The plan is no less cynical than the original threat, but if the House goes along, it may allow Washington, the credit markets and the American people to breathe a little easier.
  Mr. McConnell’s plan would allow President Obama to raise the debt ceiling by $2.5 trillion in three increments through the end of 2012. Congress could vote to disapprove each increment, but the president could veto its resolutions of disapproval, and the debt ceiling would then rise.
  The president would have to identify possible spending cuts equal to the debt ceiling increases, but he would get to choose the cuts, and would not have to make them before the two chambers vote. Congress would be unable to force him to make the cuts it wants, except through the regular appropriations process.
  The proposal is clearly meant to shift all the blame for raising the debt ceiling onto the president, and away from Republicans. Every Republican in Congress could proudly vote against the debt increases, but the ceiling would still go up, because there are not enough Republicans to override a veto. It’s a distinction that makes sense only in the current Washington frame of mind, but it’s a trade-off worth making to avoid either a default or radical cuts to discretionary spending and entitlement programs…. – NYT, 7-13-11
• McConnell, Boehner blast Obama over debt talks: Just hours before another White House meeting, the top two Republicans in Congress blasted President Obama today for a debt reduction proposal they say is more specific about taxes than actual budget cuts.
  “In my view the president has presented us with three choices,” said Senate Minority Leader Mitch McConnell, R-Ky., referring to efforts to raise the $14.3 trillion debt ceiling. “Smoke and mirrors, tax hikes, or default.” “Republicans choose none of the above,” McConnell said. “I had hoped to do good; but I refuse to do harm.”
  Meanwhile, House Speaker John Boehner, R-Ohio, demanded more specifics from Obama, saying, “Where’s the president’s plan? When’s he going to lay his cards on the table?” “This debt limit increase is his problem,” Boehner said. “I think it’s time for him to lead by putting his plan on the table, something that the Congress can pass.”
  Republican and Democratic leaders are scheduled to meet with Obama at 3:45 p.m., a third straight day of negotiating…. – USA Today, 7-12-11

JULY 12, 2011: WHITE HOUSE MEETINGS CONTINUE

• Obama says he cannot guarantee Social Security checks will go out on August 3: President Obama on Tuesday said he cannot guarantee that retirees will receive their Social Security checks August 3 if Democrats and Republicans in Washington do not reach an agreement on reducing the deficit in the coming weeks.
  “I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it,” Mr. Obama said in an interview with CBS Evening News anchor Scott Pelley, according to excerpts released by CBS News.
  The Obama administration and many economists have warned of economic catastrophe if the United States does not raise the amount it is legally allowed to borrow by August 2…. – CBS News, 7-12-11
• Obama, lawmakers regroup to seek U.S. debt deal: President Barack Obama and congressional leaders, struggling to break an impasse over taxes and spending cuts, will regroup on Tuesday to seek common ground for a deal to avoid a looming U.S. debt default.
  Obama and top lawmakers from both political parties will hold their third meeting in as many days at the White House at 3:45 p.m. (1945 GMT) to hammer out elements of legislation to reduce the U.S. deficit and raise the debt ceiling by Aug. 2.
  The two sides remain far apart on the role of revenues in a deficit-fighting plan. The White House wants to end Bush-era tax breaks for the wealthiest Americans and close other corporate tax loopholes, boosting federal coffers even as massive government spending cuts are made…. – Reuters, 7-12-11
• Obama urges Republicans to follow Reagan example: President Barack Obama urged Republicans to draw inspiration from the hero of fiscal conservatives, Ronald Reagan, who had agreed to revenue increases to cut the US deficit.
  “Ronald Reagan repeatedly took steps that included revenue, in order for him to accomplish some of these larger goals,” Obama told CBS in an interview.
  “And the question is if Ronald Reagan could compromise — why wouldn’t folks who idolize Ronald Reagan be willing to engage in those same kinds of compromises.”… – AFP, 7-13-11
• The tea party, the debt ceiling and John Boehner’s conundrum: House Speaker John Boehner of Ohio speaks to reporters on Capitol Hill in Washington, Monday, July 11, 2011, as the debt talks continued. (AP Photo/Susan Walsh)When Republicans retook the House in the 2010 midterm elections, there were a handful of smart party strategists who cautioned that managing the majority might be more trouble than anyone thought, due to the scores of tea party-aligned members coming into Congress.
  Six months into the 112th Congress and House Speaker John Boehner (Ohio) is learning that lesson in spades, as the debt ceiling debate rages on with no signs of compromise.
  New polling from the Washington Post and Pew Research Center paints Boehner’s challenge in corralling the tea party element of the Republican conference in stark relief.
  The data suggests that those who identify as Republicans who are supportive of the tea party not only view themselves as far more educated than the average person on the current debt debate, but are also far more worried about the impact if the debt limit is increased.
  More than eight in 10 tea party supporters (81 percent) said they understand “what would happen if the government does not raise the federal debt limit” — far more than the 55 percent of all respondents who said the same thing.
  Three quarters of tea party supporters said that they were more concerned that raising the debt ceiling would “lead to higher government spending and make the national debt bigger,” while just 19 percent said they were more worried that “not raising the debt limit would force the government into default and hurt the nation’s economy.”
  That stands in stark contrast to all Americans in the poll, 47 percent of whom said raising the debt limit was a bigger concern while 42 percent said not raising it was the bigger worry…. – WaPo, 7-12-11

Full Text July 11, 2011: President Obama’s Press Conference on Debt Ceiling Talks with Republican Congressional Leaders

Press Conference by the President

President Obama gestures as he responds to a question at a news conference at the White House July 11. (Shawn Thew, EPA)

James S. Brady Press Briefing Room

11:15 A.M. EDT

THE PRESIDENT:  Good morning, everybody.  I want to give a quick update on what’s happening with the debt negotiations, provide my perspective, and then I’m going to take a few questions.

As all of you know, I met with congressional leaders yesterday.  We’re going to be meeting again today, and we’re going to meet every single day until we get this thing resolved.
The good news is that all the leaders continue to believe, rightly, that it is not acceptable for us not to raise the debt ceiling and to allow the U.S. government to default.  We cannot threaten the United States’ full faith and credit for the first time in our history.  We still have a lot of work to do, though, to get this problem solved.  And so let me just make a couple of points.

First of all, all of us agree that we should use this opportunity to do something meaningful on debt and deficits.  And the reports that have been out there have been largely accurate that Speaker Boehner and myself had been in a series of conversations about doing the biggest deal possible so that we could actually resolve our debt and our deficit challenge for a long stretch of time.  And I want to say I appreciate Speaker Boehner’s good-faith efforts on that front.

What I emphasized to the broader group of congressional leaders yesterday is now is the time to deal with these issues.  If not now, when?  I’ve been hearing from my Republican friends for quite some time that it is a moral imperative for us to tackle our debt and our deficits in a serious way.  I’ve been hearing from them that this is one of the things that’s creating uncertainty and holding back investment on the part of the business community.  And so what I’ve said to them is, let’s go. And it is possible for us to construct a package that would be balanced, would share sacrifice, would involve both parties taking on their sacred cows, would involved some meaningful changes to Medicare, Social Security, and Medicaid that would preserve the integrity of the programs and keep our sacred trust with our seniors, but make sure those programs were there for not just this generation but for the next generation; that it is possible for us to bring in revenues in a way that does not impede our current recovery, but is fair and balanced.

We have agreed to a series of spending cuts that will make the government leaner, meaner, more effective, more efficient, and give taxpayers a greater bang for their buck.  That includes defense spending.  That includes health spending.  It includes some programs that I like very much, and we — be nice to have, but that we can’t afford right now.

And if you look at this overall package, we could achieve a situation in which our deficits were at a manageable level and our debt levels were stabilized, and the economy as a whole I think would benefit from that.  Moreover, I think it would give the American people enormous confidence that this town can actually do something once in a while; that we can defy the expectations that we’re always thinking in terms of short-term politics and the next election, and every once in a while we break out of that and we do what’s right for the country.

So I continue to push congressional leaders for the largest possible deal.  And there’s going to be resistance.  There is, frankly, resistance on my side to do anything on entitlements.  There is strong resistance on the Republican side to do anything on revenues.  But if each side takes a maximalist position, if each side wants 100 percent of what its ideological predispositions are, then we can’t get anything done.  And I think the American people want to see something done.  They feel a sense of urgency, both about the breakdown in our political process and also about the situation in our economy.

So what I’ve said to the leaders is, bring back to me some ideas that you think can get the necessary number of votes in the House and in the Senate.  I’m happy to consider all options, all alternatives that they’re looking at.  The things that I will not consider are a 30-day or a 60-day or a 90-day or a 180-day temporary stopgap resolution to this problem.  This is the United States of America, and we don’t manage our affairs in three-month increments.  We don’t risk U.S. default on our obligations because we can’t put politics aside.

So I’ve been very clear to them:  We’re going to resolve this, and we’re going to resolve this for a reasonable period of time, and we’re going to resolve it in a serious way.  And my hope is, is that as a consequence of negotiations that take place today, tomorrow, the next day and through next weekend, if necessary, that we’re going to come up with a plan that solves our short-term debt and deficit problems, avoids default, stabilizes the economy, and proves to the American people that we can actually get things done in this country and in this town.

All right, with that I’m going to take some questions, starting with Ben Feller.

Q    Thank you very much, Mr. President.  Two quick topics. Given that you’re running out of time, can you explain what is your plan for where these talks go if Republicans continue to oppose any tax increases, as they’ve adamantly said that they will?  And secondly, on your point about no short-term stopgap measure, if it came down to that and Congress went that route, I know you’re opposed to it but would you veto it?

THE PRESIDENT:  I will not sign a 30-day or a 60-day or a 90-day extension.  That is just not an acceptable approach.  And if we think it’s going to be hard — if we think it’s hard now, imagine how these guys are going to be thinking six months from now in the middle of election season where they’re all up.  It’s not going to get easier.  It’s going to get harder.  So we might as well do it now — pull off the Band-Aid; eat our peas.  (Laughter.)  Now is the time to do it.  If not now, when?  \

We keep on talking about this stuff and we have these high-minded pronouncements about how we’ve got to get control of the deficit and how we owe it to our children and our grandchildren. Well, let’s step up.  Let’s do it.  I’m prepared to do it.  I’m prepared to take on significant heat from my party to get something done.  And I expect the other side should be willing to do the same thing — if they mean what they say that this is important.

And let me just, Ben, comment on this whole issue of tax increases, because there’s been a lot of information floating around there.  I want to be crystal clear — nobody has talked about increasing taxes now.  Nobody has talked about increases –increasing taxes next year.  What we have talked about is that starting in 2013, that we have gotten rid of some of these egregious loopholes that are benefiting corporate jet owners or oil companies at a time where they’re making billions of dollars of profits.  What we have said is as part of a broader package we should have revenues, and the best place to get those revenues are from folks like me who have been extraordinarily fortunate, and that millionaires and billionaires can afford to pay a little bit more — going back to the Bush tax rates.

And what I’ve also said to Republicans is, if you don’t like that formulation, then I’m happy to work with you on tax reform that could potentially lower everybody’s rates and broaden the base, as long as that package was sufficiently progressive so that we weren’t balancing the budget on the backs of middle-class families and working-class families, and we weren’t letting hedge fund managers or authors of best-selling books off the hook.

That is a reasonable proposition.  So when you hear folks saying, well, the President shouldn’t want massive, job-killing tax increases when the economy is this weak — nobody is looking to raise taxes right now.  We’re talking about potentially 2013 and the out-years.  In fact, the only proposition that’s out there about raising taxes next year would be if we don’t renew the payroll tax cut that we passed in December, and I’m in favor of renewing it for next year as well.  But there have been some Republicans who said we may not renew it.

And if we don’t renew that, then the $1,000 that’s been going to a typical American family this year as a consequence of the tax cut that I worked with the Republicans and passed in December — that lapses.  That could weaken the economy.

So I have bent over backwards to work with the Republicans to try to come up with a formulation that doesn’t require them to vote sometime in the next month to increase taxes.  What I’ve said is to identify a revenue package that makes sense, that is commensurate with the sacrifices we’re asking other people to make, and then I’m happy to work with you to figure out how else we might do it.

Q    Do you see any path to a deal if they don’t budge on taxes?

THE PRESIDENT:  I do not see a path to a deal if they don’t budge, period.  I mean, if the basic proposition is “it’s my way or the highway,” then we’re probably not going to get something done because we’ve got divided government.  We’ve got Democrats controlling the Senate; we probably are going to need Democratic votes in the House for any package that could possibly pass.  And so if, in fact, Mitch McConnell and John Boehner are sincere — and I believe they are — that they don’t want to see the U.S. government default, then they’re going to have to compromise just like Democrats are going to have to compromise; just like I have shown myself willing to compromise.

Chip Reid.

Q    Thank you, Mr. President.  You said that everybody in the room is willing to do what they have to do, wants to get something done by August 2nd.  But isn’t the problem the people who aren’t in the room, and in particular Republican presidential candidates and Republican Tea Partiers on the Hill, and the American public?  The latest CBS News poll showed that only 24 percent of Americans said you should raise the debt limit to avoid an economic catastrophe.  There are still 69 percent who oppose raising the debt limit.  So isn’t the problem that you and others have failed to convince the American people that we have a crisis here, and how are you going to change that?

THE PRESIDENT:  Well, let me distinguish between professional politicians and the public at large.  The public is not paying close attention to the ins and outs of how a Treasury option goes.  They shouldn’t.  They’re worrying about their family; they’re worrying about their jobs; they’re worrying about their neighborhood.  They’ve got a lot of other things on their plate.  We’re paid to worry about it.

I think, depending on how you phrase the question, if you said to the American people, is it a good idea for the United States not to pay its bills and potentially create another recession that could throw millions of more people out of work, I feel pretty confident I can get a majority on my side on that one.

And that’s the fact.  If we don’t raise the debt ceiling and we see a crisis of confidence in the markets, and suddenly interest rates are going up significantly, and everybody is paying higher interest rates on their car loans, on their mortgages, on their credit cards, and that’s sucking up a whole bunch of additional money out of the pockets of the American people, I promise you they won’t like that.

Now, I will say that some of the professional politicians know better.  And for them to say that we shouldn’t be raising the debt ceiling is irresponsible.  They know better.

And this is not something that I am making up.  This is not something that Tim Geithner is making up.  We’re not out here trying to use this as a means of doing all these really tough political things.  I’d rather be talking about stuff that everybody welcomes — like new programs or the NFL season getting resolved.  Unfortunately, this is what’s on our plate.  It’s before us right now.  And we’ve got to deal with it.

So what you’re right about, I think, is, is that the leaders in the room here at a certain point have to step up and do the right thing, regardless of the voices in our respective parties that are trying to undermine that effort.

I have a stake in John Boehner successfully persuading his caucus that this is the right thing to do, just like he has a stake in seeing me successfully persuading the Democratic Party that we should take on these problems that we’ve been talking about for too long but haven’t been doing anything about.

Q    Do you think he’ll come back to the $4 trillion deal?

THE PRESIDENT:  I think Speaker Boehner has been very sincere about trying to do something big.  I think he’d like to do something big.  His politics within his caucus are very difficult — you’re right.  And this is part of the problem with a political process where folks are rewarded for saying irresponsible things to win elections or obtain short-term political gain, when we actually are in a position to try to do something hard we haven’t always laid the groundwork for.  And I think that it’s going to take some work on his side, but, look, it’s also going to take some work on our side, in order to get this thing done.

I mean, the vast majority of Democrats on Capitol Hill would prefer not to have to do anything on entitlements; would prefer, frankly, not to have to do anything on some of these debt and deficit problems.  And I’m sympathetic to their concerns, because they’re looking after folks who are already hurting and already vulnerable, and there are a lot of families out there and seniors who are dependant on some of these programs.

And what I’ve tried to explain to them is, number one, if you look at the numbers, then Medicare in particular will run out of money and we will not be able to sustain that program no matter how much taxes go up.  I mean, it’s not an option for us to just sit by and do nothing.  And if you’re a progressive who cares about the integrity of Social Security and Medicare and Medicaid, and believes that it is part of what makes our country great that we look after our seniors and we look after the most vulnerable, then we have an obligation to make sure that we make those changes that are required to make it sustainable over the long term.

And if you’re a progressive that cares about investments in Head Start and student loan programs and medical research and infrastructure, we’re not going to be able to make progress on those areas if we haven’t gotten our fiscal house in order.

So the argument I’m making to my party is, the values we care about — making sure that everybody in this country has a shot at the American Dream and everybody is out there with the opportunity to succeed if they work hard and live a responsible life, and that government has a role to play in providing some of that opportunity through things like student loans and making sure that our roads and highways and airports are functioning, and making sure that we’re investing in research and development for the high-tech jobs of the future — if you care about those things, then you’ve got to be interested in figuring out how do we pay for that in a responsible way.

And so, yeah, we’re going to have a sales job; this is not pleasant.  It is hard to persuade people to do hard stuff that entails trimming benefits and increasing revenues.  But the reason we’ve got a problem right now is people keep on avoiding hard things, and I think now is the time for us to go ahead and take it on.

Rich Wolf.

Q    Thank you, Mr. President.  You keep talking about balance, shared sacrifice, but in the $4 trillion deal that you’re talking about roughly, it seems to be now at about four-to-one spending to taxes; we’re talking about $800 billion in taxes, roughly.  That doesn’t seem very fair to some Democrats.  I’m wondering if you could clarify why we’re at that level.  And also, if you could clarify your Social Security position — would any of the money from Social Security, even from just Chained CPI, go toward the deficit as opposed to back into the trust fund?

THE PRESIDENT:  With respect to Social Security, Social Security is not the source of our deficit problems.  Social Security, if it is part of a package, would be an issue of how do we make sure Social Security extends its life and is strengthened?  So the reason to do Social Security is to strengthen Social Security to make sure that those benefits are there for seniors in the out-years.  And the reason to include that potentially in this package is if you’re going to take a bunch of tough votes, you might as well do it now, as opposed to trying to muster up the political will to get something done further down in the future.

With respect to a balanced package, is the package that we’re talking about exactly what I would want?  No.  I might want more revenues and fewer cuts to programs that benefit middle-class families that are trying to send their kids to college, or benefit all of us because we’re investing more in medical research.

So I make no claims that somehow the position that Speaker Boehner and I discussed reflects 100 percent of what I want.  But that’s the point.  My point is, is that I’m willing to move in their direction in order to get something done.  And that’s what compromise entails.  We have a system of government in which everybody has got to give a little bit.

Now, what I will say is, is that the revenue components that we’ve discussed would be significant and would target folks who can most afford it.  And if we don’t do any revenue — because you may hear the argument that why not just go ahead and do all the cuts and we can debate the revenue issues in the election — right?  You’ll hear that from some Republicans.  The problem is, is that if you don’t do the revenues, then to get the same amount of savings you’ve got to have more cuts, which means that it’s seniors, or it’s poor kids, or it’s medical researchers, or it’s our infrastructure that suffers.

And I do not want, and I will not accept, a deal in which I am asked to do nothing, in fact, I’m able to keep hundreds of thousands of dollars in additional income that I don’t need, while a parent out there who is struggling to figure out how to send their kid to college suddenly finds that they’ve got a couple thousand dollars less in grants or student loans.

That’s what the revenue debate is about.  It’s not because I want to raise revenues for the sake of raising revenues, or I’ve got some grand ambition to create a bigger government.  It’s because if we’re going to actually solve the problem, there are a finite number of ways to do it.  And if you don’t have revenues, it means you are putting more of a burden on the people who can least afford it.  And that’s not fair.  And I think the American people agree with me on that.

Sam Stein.

Q    Thank you, Mr. President.  With unemployment now at 9.2 percent and a large chunk of those lost jobs coming from the private sector, is now a really good time to cut trillions of dollars in spending?  How will we still create jobs?  And then to piggyback on the Social Security question — what do you say to members of your own party who say it doesn’t contribute to the deficit, let’s consider it but not in the context of this deal?

THE PRESIDENT:  Our biggest priority as an administration is getting the economy back on track and putting people back to work.  Now, without relitigating the past, I’m absolutely convinced, and the vast majority of economists are convinced, that the steps we took in the Recovery Act saved millions of people their jobs or created a whole bunch of jobs.

And part of the evidence of that is as you see what happens with the Recovery Act phasing out.  When I came into office and budgets were hemorrhaging at the state level, part of the Recovery Act was giving states help so they wouldn’t have to lay off teachers, police officers, firefighters.  As we’ve seen that federal support for states diminish, you’ve seen the biggest job losses in the public sector — teachers, police officers, firefighters losing their jobs.

So my strong preference would be for us to figure out ways that we can continue to provide help across the board.  But I’m operating within some political constraints here, because whatever I do has to go through the House of Representatives.

What that means then is, is that among the options that are available to us is, for example, the payroll tax cut, which might not be exactly the kind of program that I would design in order to boost employment but does make a difference because it puts money in the pockets of people who are then spending it at businesses, large and small.  That gives them more customers, increases demand, and it gives businesses a greater incentive to hire.  And that would be, for example, a component of this overall package.

Unemployment benefits, again, puts money in the pockets of folks who are out there knocking on doors trying to find a job every day.  Giving them those resources, that puts more money into the economy and that potentially improves it — improves the climate for businesses to want to hire.

So as part of a component of a deal, I think it’s very important for us to look at what are the steps we can take short term in order to put folks back to work.  I am not somebody who believes that just because we solve the deficit and debt problems short term, medium term, or long term, that that automatically solves the unemployment problem.  I think we’re still going to have to do a bunch of stuff — including, for example, trade deals that are before Congress right now that could add tens of thousands of jobs.

Republicans gave me this list the beginning of this year as a priority, something that they thought they could do.  Now I’m ready to do it, and so far we haven’t gotten the kind of movement that I would have expected.

We’ve got the potential to create an infrastructure bank that could put construction workers to work right now, rebuilding our roads and our bridges and our vital infrastructure all across the country.  So those are still areas where I think we can make enormous progress.

I do think that if the country as a whole sees Washington act responsibly, compromises being made, the deficit and debt being dealt with for 10, 15, 20 years, that that will help with businesses feeling more confident about aggressively investing in this country, foreign investors saying America has got its act together and are willing to invest.  And so it can have a positive impact in overall growth and employment.

It’s not the only solution.  We’re still going to have to have a strong jobs agenda.  But it is part of a solution.  I might add it is the primary solution that the Republicans have offered when it comes to jobs.  They keep on going out there and saying, “Mr. President, what are you doing about jobs?”  And when you ask them, well, what would you do?  “We’ve got to get government spending under control and we’ve got to get our deficits under control.”  So I say, okay, let’s go.  Where are they?  I mean, this is what they claim would be the single biggest boost to business certainty and confidence.  So what’s the holdup?

With respect to Social Security, as I indicated earlier, making changes to these programs is so difficult that this may be an opportunity for us to go ahead and do something smart that strengthens Social Security and gives not just this generation but future generations the opportunity to say this thing is going to be in there for the long haul.

Now, that may not be possible and you’re absolutely right that, as I said, Social Security is not the primary driver of our long-term deficits and debt.  On the other hand, we do want to make sure that Social Security is going to be there for the next generations, and if there is a reasonable deal to be had on it, it is one that I’m willing to pursue.

Q    Are there things with respect to Social Security, like raising the retirement age, means testing — are those too big a chunk for –

THE PRESIDENT:  I’m probably not going to get into the details, Sam, right now of negotiations.  I might enjoy negotiating with you, but I don’t know how much juice you’ve got in the Republican caucus.  (Laughter.)  That’s what I figured.

All right, Lesley Clark.

Q    Thank you, Mr. President.

THE PRESIDENT: Thank you.

Q    Have you — you’ve talked with economists, you said that economists have agreed that a deal needs to be made.  Have you worked with new U.S. business leaders at all to lobby Congress to raise the debt ceiling?  And if so, who are you talking to?

THE PRESIDENT: I have spoken extensively to business leaders.  And I’ll be honest with you.  I think that business leaders in the abstract want to see a resolution to this problem. What I’ve found is that they are somewhat hesitant to weigh in on some of these issues even if they’re willing to say something privately to me, partly because they’ve got a whole bunch of business pending before Congress and they don’t want to make anybody mad.

So this is a problem of our politics and our politicians, but it’s not exclusively a problem of our politics and our politicians.  The business community is a lot like everybody else, which is we want to cut everybody else’s stuff and we want to keep our stuff.  We want to cut our taxes, but if you want to raise revenue with somebody else’s taxes, that’s okay.  And that kind of mindset is why we never get the problem solved.

There have been business leaders, like Warren Buffet, who I think have spoken out forcefully on this issue.  I think some of the folks who participated in the Bowles-Simpson Commission made very clear that they would agree to a balanced approach even if it meant for them, individually, that they were seeing slightly higher taxes on their income, given that they’re — I think the average CEO, if I’m not mistaken, saw a 23 percent raise this past year while the average worker saw a zero to one percent raise last year.

So I think that there are a lot of well-meaning business people out there who recognize the need to make something happen. But I think that they’ve been hesitant to be as straightforward as I’d like when it says, this is what a balanced package means. It means that we’ve got some spending cuts; it means that we’ve got some increased revenue; and it means that we’re taking on some of the drivers of our long-term debt and deficits.

Q    And can you say, as the clock ticks down, whether or not the administration is –

THE PRESIDENT: I’m sorry –

Q    Can you say, as the clock ticks down, whether or not the administration is working on any sort of contingency plans if things don’t happen by August?

THE PRESIDENT: We are going to get this done by August 2nd.
George Condon.

Q    Mr. President, to follow on Chip’s question, you said that the Speaker faces tough politics in his caucus.  Do you have complete confidence that he can deliver the votes on anything that he agrees to?  Is he in control of his caucus?

THE PRESIDENT: That’s a question for the Speaker, not a question for me.  My experience with John Boehner has been good. I think he’s a good man who wants to do right by the country.  I think that it’s a — as Chip alluded to, the politics that swept him into the speakership were good for a midterm election; they’re tough for governing.  And part of what the Republican caucus generally needs to recognize is that American democracy works when people listen to each other, we’re willing to give each other the benefit of the doubt, we assume the patriotism and good intentions of the other side, and we’re willing to make some sensible compromises to solve big problems.  And I think that there are members of that caucus who haven’t fully arrived at that realization yet.

Q    So your confidence in him wasn’t shaken by him walking away from the big deal he said he wanted?

THE PRESIDENT:  These things are a tough process.  And, look, in fairness, a big deal would require a lot of work on the part of Harry Reid and Nancy Pelosi and myself to bring Democrats along.  But the point is, is if everybody gets in the boat at the same time, it doesn’t tip over.  I think that was Bob Dole’s famous comment after striking a deal with the President and Mr. Gingrich back in the ‘90s.  And that is always the case when it comes to difficult but important tasks like this.

Last question.  April Ryan.

Q    Mr. President, hi.  I want to revisit the issue of sacrifice.  In 2009, you said that — expect the worst to come; we have not seen the worst yet.  And now with these budget cuts looming, you have minorities, the poor, the elderly, as well as people who are scared of losing jobs fearful.  And also, what say you about Congressman Chaka Fattah’s bill, the Debt Free America Act?  Do you support that bill?  Are you supporting the Republican bill that is similar to his, modeled after Congressman Fattah’s bill?

THE PRESIDENT:  Well, I’m not going to comment on a particular bill right now.  Let me speak to the broader point that you’re asking about, April.

This recession has been hard on everybody, but obviously it’s harder on folks who’ve got less.  And the thing that I am obsessed with, and have been since I came into office, is all those families out there who are doing the right thing every single day, who are looking after their families, who are just struggling to keep up, and just feel like they’re falling behind, no matter how hard they work.

I got a letter this past week from a woman who — her husband had lost his job, had pounded the pavement, finally found a job.  They felt like things were stabilizing for a few months. Six months later he lost his second job.  Now they’re back looking again and trying to figure out how they are going to make ends meet.  And there are just hundreds of thousands of folks out there who really have seen as tough of an economy as we’ve seen in our lifetimes.

Now, we took very aggressive steps when I first came into office to yank the economy out of a potential Great Depression and stabilize it.  And we were largely successful in stabilizing it.  But we stabilized it at a level where unemployment is still too high and the economy is not growing fast enough to make up for all the jobs that were lost before I took office and the few months after I took office.

So this unemployment rate has been really stubborn.  There are a couple of ways that we can solve that.  Number one is to make sure that the overall economy is growing.  And so we have continued to take a series of steps to make sure that there’s money in people’s pockets that they can go out there and spend.  That’s what these payroll tax cuts were about.

We’ve taken a number of steps to make sure that businesses are willing to invest, and that’s what the small business tax cuts and some of the tax breaks for companies that are willing to invest in plants and equipment — and zero capital gains for small businesses — that’s what that was all about, was giving businesses more incentive to invest.

We have worked to make sure that the training programs that are out there for folks who are having to shift from jobs that may not exist anymore so that they can get the training they need for the jobs that do exist, that those are improved and sharpened.

We have put forward a series of proposals to make sure that regulations that may be unnecessary and are hampering some businesses from investing, that we are examining all of those for their cost and their benefits.  And if they are not providing the kind of benefits in terms of the public health, and clean air and clean water, and worker safety that have been promised, then we should get rid of some of those regulations.

So we’ve been looking at the whole menu of steps that can be taken.  We are now in a situation where because the economy has moved slower than we wanted, because of the deficits and debt that result from the recession and the crisis, that taking a approach that costs trillions of dollars is not an option.  We don’t have that kind of money right now.

What we can do is to solve this underlying debt and deficit problem for a long period of time so that then we can get back to having a conversation about, all right, since we now have solved this problem, that’s not — no longer what’s hampering economic growth, that’s not feeding business and uncertainty, everybody feels that the ground is stable under our feet, are there some strategies that we could pursue that would really focus on some targeted job growth — infrastructure being a primary example.

I mean, the infrastructure bank that we’ve proposed is relatively small.  But could we imagine a project where we’re rebuilding roads and bridges and ports and schools and broadband lines and smart grids, and taking all those construction workers and putting them to work right now?  I can imagine a very aggressive program like that that I think the American people would rally around and would be good for the economy not just next year or the year after, but for the next 20 or 30 years.

But we can’t even have that conversation if people feel as if we don’t have our fiscal house in order.  So the idea here is let’s act now.  Let’s get this problem off the table.  And then with some firm footing, with a solid fiscal situation, we will then be in a position to make the kind of investments that I think are going to be necessary to win the future.

So this is not a right or left, conservative-liberal situation.  This is how do we operate in a smart way, understanding that we’ve got some short-term challenges and some long-term challenges.  If we can solve some of those long-term challenges, that frees up some of our energies to be able to deal with some of these short-term ones, as well.

All right?  Thank you very much, everybody.

END 11:54 A.M. EDT

Political Buzz July 11, 2011: Debt Ceiling Showdown: President Obama’s Press Conference & Debt Talks with Congressional Leaders

POLITICAL BUZZ

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

DEBT CEILING SHOWDOWN: OBAMA VS CONGRESSIONAL LEADERS

Stephen Crowley/The New York Times

• Timeline: Debt debate: President Barack Obama and top lawmakers will meet again Monday in search of a deal on slashing the U.S. budget deficit and raising the $14.3 trillion debt ceiling before the United States defaults.
  Obama wants to strike a deal well before August 2, when the Treasury Department says it will no longer be able to honor its obligations and issue new bonds without breaching the limit that Congress set on how much the United States can borrow.
  Republican and Democratic lawmakers say any increase must include measures to ensure the country’s debt remains at a sustainable level. The debt-reduction debate is a sharp shift for Washington, which less than a year ago was focused on additional deficit spending to lower the unemployment rate.
  Following is a timeline of the debate…. – Reuters, 7-11-11
• Factbox: What’s on the table in debt talks: President Barack Obama and congressional leaders resume their White House talks on Monday to see if they have the makings of a deal to trim budget deficits and avert a looming default.
  The Treasury Department has warned it will run out of money to cover the country’s bills if Congress does not raise the $14.3 trillion debt ceiling by August 2.
  Although Democrats and Republicans agree on the need for trillions of dollars in budget savings, they remain sharply divided about how to get there.
  Following is a summary of the debate… – Reuters, 7-11-11
• Obama on debt ceiling: Is he winning over Americans?: An increasing number of Americans are concerned about the consequences of not raising the debt ceiling, according to a new poll. President Obama has been blunt about the consequences of default…. – CS Monitor, 7-12-11“We might as well do it now — pull off the Band-Aid; eat our peas.” – President Barack Obama“I know you all love to write the soap opera here.” — Eric Cantor (R-Va.), joking about the Republican-Democrat split.“It’s time for tough love. Don’t let them scare you by telling you that the country’s going to fall apart.” — Michele Bachmann (R-Minn.), speaking to a cheering crowd in Iowa over the weekend.

  “I hope and pray and believe they should not raise the debt ceiling. These historic, dramatic moments where you can draw a line in the sand and force politicians to actually do something bold and courageous are important moments.” – Tim Pawlenty, Former Minnesota governor

  “A cataclysmic game of chicken. Negotiating with a gun to your head. A Thelma & Louise-style full throttle off a cliff.” — John Avlon at the Daily Beast, on the “dire metaphors” for the debate.

  “The debt ceiling is a gut-check time for all Republicans on spending and size of government. … Apparently, Gov. Romney is still checking his gut to figure out where he should stand.” — Alex Conant, spokesman for former Minnesota Gov. Tim Pawlenty.

  “You and I have decided to have lunch together today. We both need lunch. We both know we’re going to have lunch. But we don’t agree on where to eat. So you propose Mexican, but I counter with Chinese, and warn that if you refuse, neither of us will get to eat lunch ever again. Deal? … Of course not. But that’s pretty much the GOP’s strategy on the debt-ceiling negotiation.” — Ezra Klein on the partisan bickering

  “It’s a hostage negotiation! It’s a lunch conversation! No, it’s the debt ceiling debate.” — Eric Thompson at the Atlantic, on how to characterize the debt ceiling.

  “We are at each others throats more than is necessary.” — Jeff Immelt, chairman of Obama’s outside panel of economic advisers, calling the White House and Congress to strike a deal on Monday.

JULY 12, 2011: WHITE HOUSE MEETINGS CONTINUE

• McConnell: No real deficit deal until Obama is gone: The Senate’s top Republican said Tuesday that he did not see a way for Republicans and Democrats to come to agreement on meaningful deficit reduction as long as President Obama remains in office.
  “After years of discussions and months of negotiations, I have little question that as long as this president is in the Oval Office, a real solution is probably unattainable,” Senate Republican Leader Mitch McConnell said in remarks on the Senate floor…. – CBS News, 7-12-11
• McConnell, Boehner blast Obama over debt talks: Just hours before another White House meeting, the top two Republicans in Congress blasted President Obama today for a debt reduction proposal they say is more specific about taxes than actual budget cuts.
  “In my view the president has presented us with three choices,” said Senate Minority Leader Mitch McConnell, R-Ky., referring to efforts to raise the $14.3 trillion debt ceiling. “Smoke and mirrors, tax hikes, or default.” “Republicans choose none of the above,” McConnell said. “I had hoped to do good; but I refuse to do harm.”
  Meanwhile, House Speaker John Boehner, R-Ohio, demanded more specifics from Obama, saying, “Where’s the president’s plan? When’s he going to lay his cards on the table?” “This debt limit increase is his problem,” Boehner said. “I think it’s time for him to lead by putting his plan on the table, something that the Congress can pass.”
  Republican and Democratic leaders are scheduled to meet with Obama at 3:45 p.m., a third straight day of negotiating…. – USA Today, 7-12-11
• Obama, lawmakers regroup to seek U.S. debt deal: President Barack Obama and congressional leaders, struggling to break an impasse over taxes and spending cuts, will regroup on Tuesday to seek common ground for a deal to avoid a looming U.S. debt default.
  Obama and top lawmakers from both political parties will hold their third meeting in as many days at the White House at 3:45 p.m. (1945 GMT) to hammer out elements of legislation to reduce the U.S. deficit and raise the debt ceiling by Aug. 2.
  The two sides remain far apart on the role of revenues in a deficit-fighting plan. The White House wants to end Bush-era tax breaks for the wealthiest Americans and close other corporate tax loopholes, boosting federal coffers even as massive government spending cuts are made…. – Reuters, 7-12-11

JULY 11, 2011: PRESIDENT OBAMA PRESS CONFERENCE ON DEBT CEILING NEGOTIATIONS

President Obama gestures as he responds to a question at a news conference at the White House July 11. (Shawn Thew, EPA)

Obama rules out short-term deal on debt ceiling: President Obama said Monday that he would not consider stopgap measures to temporarily avert the debt-ceiling crisis, saying “that is just not an acceptable approach.”
Obama spoke after Republicans rejected a deficit-reduction framework that would raise taxes and cut entitlements. “I continue to push congressional leaders for the largest possible deal,” Obama said at a White House news conference. He added, “I will not sign” a short-term extension.

“This is the United States of America. We don’t manage our affairs in three-month increments. We don’t risk default on our obligations because we can’t put politics aside.” — Barack Obama

• McConnell Offers Three-Stage Debt-Limit ‘Last Choice’ Option: Senate Republican Leader Mitch McConnell proposed a “last choice option” for increasing the U.S. debt limit in three stages in case President Barack Obama and Congress can’t agree on a deficit-reduction plan.
  McConnell’s plan would let the president raise the limit, while accompanying it with offsetting spending cuts, unless Congress struck down his plan with a two-thirds majority. The debt-ceiling increase could occur without the companion spending cuts, McConnell said.
  Don Stewart, a spokesman for McConnell, said the plan would allow Obama to raise the debt limit while putting the onus on him and congressional Democrats for any failure to cut spending. At the same time, Republicans wouldn’t have to agree to tax increases.
  The proposal is “not my first choice,” McConnell said, adding that he wanted to show the financial markets that the U.S. will not default on its debts. He said he continues to seek a broader deal to raise the $14.3 trillion debt limit with congressional Democrats and the White House. “We’re certainly not going to send a signal to the markets and the American people that default is an option,” he said…. – Bloomberg, 7-12-11
• Debt deal: How to kill three birds with one stone: President Barack Obama and Republican leaders have been mired in a dispute over taxes as they try to avert a looming debt default, but a deal is possible that would allow both sides to declare victory.
  Republicans could live up to their promise to prevent tax increases. At the same time, Democrats could say they are raising taxes on the rich and boosting the economy.
  That could resolve the biggest remaining obstacle to a budget deal that would cover the United States’ borrowing needs through the November 2012 elections. Congress needs to act soon to ensure the Treasury can continue paying its bills beyond August 2.
  The two sides have already agreed in principle on roughly $1.5 trillion to $2 trillion in spending cuts but have repeatedly clashed over raising new tax revenue, which Democrats insist must be part of any deficit-reduction package…. – Reuters, 7-12-11
• Obama Grasping Centrist Banner in Debt Impasse: President Obama made no apparent headway on Monday in his attempt to forge a crisis-averting budget deal, but he put on full display his effort to position himself as a pragmatic centrist willing to confront both parties and address intractable problems.
  At a news conference preceding the latest round of debt-reduction talks with Republican and Democratic Congressional leaders, Mr. Obama said he would not accept a temporary agreement to kick the problem down the road a few weeks or months.
  He said that he was willing to take the heat from his own party to move beyond entrenched ideological positions and that Republicans should do the same. And he continued to insist on “the biggest deal possible,” saying that now is the best opportunity for the nation to address its long-term fiscal challenges.
  Republicans dismissed his performance as political theater. But Mr. Obama’s remarks appeared to be aimed at independent voters as well as at Congressional leaders, and stood in contrast to the Republican focus on the party’s conservative base, both in the budget showdown and in presidential politics…. – NYT, 7-12-11
• Boehner-Cantor rivalry affecting debt talks It’s not the first sign of friction between the two Republican leaders: The debt talks are not the first time friction has been apparent between House Speaker John A. Boehner, rear, and House Majority Leader Eric Cantor. (Win McNamee, Getty Images / July 12, 2011)
  A long-simmering rivalry between the top two Republicans in the House has tumbled into the open, with far-reaching implications for deficit-reduction negotiations with the White House.
  Speaker John A. Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) are at odds over President Obama’s call for a massive deficit-reduction package to address fiscal problems and provide for an increase in the country’s $14.3-trillion borrowing limit before an Aug. 2 deadline.
  In private talks with the White House, Boehner favored a large package as part of pragmatic political deal-making. But Cantor, speaking for staunch conservatives in Congress, is opposed.
  In a briefing Monday, Cantor downplayed the divisions, insisting repeatedly that he and the speaker were “on the same page.” But friction between the two has grown obvious, reinforcing months-old questions over who controls House Republicans.
  “I don’t think Boehner would want to serve in a foxhole anytime with Eric Cantor,” said a Republican strategist and former leadership aide who asked not to be identified while commenting on an intraparty rivalry…. – LAT, 7-12-11
• Budget Talks Beginning to Take On a Testy Air: Even before they gathered around a long table in the Cabinet Room for another round of budget negotiations on Monday, President Obama and Republican leaders began taking shots at one another.
  Mr. Obama declared at a news conference that he would not sign a “stopgap” measure to avert a federal default, and he challenged Republicans to “eat your peas” by supporting a large deficit-reduction deal. Speaker John A. Boehner countered that Republicans would not back a package with any tax increases, and said that even agreeing to an increase in the debt limit was a big concession.
  Once the private meeting actually started, the fireworks subsided, Democratic and Republican officials briefed on the talks said, though if anything, the debate over specific policy choices served only to reinforce the chasm between the two sides. The officials described a cordial, though intense, debate in which Mr. Obama and the eight leaders from both parties delved deeply into the nitty-gritty…. – NYT, 7-12-11
• With Boehner bailing, Cantor ascends as GOP voice: Now, it’s the Eric Cantor show. The House majority leader’s voice was heard most often in Sunday night and Monday afternoon debt-limit negotiations at the White House. It has been loud in opposition to changes in tax policy to add new revenue. And some Republicans said it sounds more in tune with the sentiment of the House GOP majority than Speaker John Boehner’s voice.
  For better or worse, Cantor owns the GOP’s spotlight in the debt-limit talks now that Boehner’s effort to fashion a groundbreaking “grand bargain” has fallen apart. It was Cantor who walked out on a commission led by Vice President Joe Biden when the topic of tax hikes was raised. And now Cantor is back in the driver’s seat because the talks have turned away from the big-dollar package that President Barack Obama and Boehner were negotiating and toward a smaller framework of spending cuts produced by the Biden talks.
  At a White House meeting on Monday, Cantor used color-coded spreadsheets to explain to the president and congressional leaders where he believes agreements on spending cuts had been reached by the Biden group.
  Boehner’s failed negotiations with Obama have given more stock to Cantor’s read about where the votes lie for a debt-limit deal, which, for the moment at least, is focused on the $1 trillion to $2 trillion in cuts identified by the Biden group.
  “It looks like he’s maybe listening to the rank and file a little bit more closely,” Rep. Raul Labrador, an Idaho Republican with strong tea party credentials, told POLITICO’s Arena on Monday. “He understands what the rank and file want.”… – Politico, 7-11-11
• Obama, Republicans trapped by inflexible rhetoric: President Barack Obama and GOP lawmakers, hundreds of billions of dollars short of their goal and seemingly trapped in inflexible bargaining positions, are struggling for agreement on $2 trillion-plus in budget cuts as the price for maintaining the government’s ability to borrow.
  Lawmakers were asked to return to the White House for talks Tuesday afternoon after a 90-minute Monday session produced no progress other than to identify the size of the gap between Republicans and Obama. Neither side showed any give that might generate hopes for a speedy agreement. Instead, Republicans again took a firm stand against revenue increases while Obama and his Democratic allies insisted that they be part of any equation that cuts programs like Medicare. “I do not see a path to a deal if they don’t budge, period,” Obama said.
  At the same time, the president turned up the pressure by announcing he won’t sign any short-term debt limit increases. “We are going to get this done,” Obama insisted during a news conference…. – AP, 7-11-11
• Boehner: Debt Ceiling Increase Obama’s Problem: House Speaker John Boehner is turning up the heat on President Obama, calling the debt-ceiling increase “his problem” and putting the onus on him to present a deficit-reduction plan that can pass Congress.
  Republicans in both chambers had tough words for the administration ahead of another White House sit-down Tuesday afternoon. On the Senate floor, GOP Leader Mitch McConnell accused the president and his party of “deliberate deception.”
  The comments may reflect increasing pressure from rank-and-file Republicans to press for deeper spending cuts and not cave in to the administration’s call for tax hikes.
  “The House Republicans have a plan. We passed our budget back in the spring, outlined our priorities. Where’s the president’s plan? When’s he going to lay his cards on the table?” Boehner said. “This debt limit increase is his problem and I think it’s time for him to lead by putting his plan on the table, something that the Congress can pass.”… – Fox News, 7-12-11
• Obama Takes Centrist Banner in Impasse Over Deficit: President Obama made no apparent headway on Monday in his attempt to forge a crisis-averting budget deal, but he put on full display his effort to position himself as a pragmatic centrist willing to confront both parties and address intractable problems.
  At a news conference preceding the latest round of debt-reduction talks with Republican and Democratic Congressional leaders, Mr. Obama said he would not accept a temporary agreement to kick the problem down the road a few weeks or months.
  He said that he was willing to take the heat from his own party to move beyond entrenched ideological positions and that Republicans should do the same. And he continued to insist on “the biggest deal possible,” saying that now is the best opportunity for the nation to address its long-term fiscal challenges.
  Republicans dismissed his performance as political theater. But Mr. Obama’s remarks appeared to be aimed at independent voters as well as at Congressional leaders, and stood in contrast to the Republican focus on the party’s conservative base, both in the budget showdown and in presidential politics.
  Mr. Obama’s remarks were among the clearest expressions yet of a repositioning effort that has been under way since the midterm elections last November, when Republicans captured the House and made inroads in the Senate.
  Seeking to shed the image of big-government liberal that Republicans used effectively against him last year, he has made or offered policy compromises on an array of issues and cast himself in the role of the adult referee for both parties’ gamesmanship, or the parent of stubborn children.
  “If we think it’s hard now, imagine how these guys are going to be thinking six months from now in the middle of election season where they’re all up,” he said. “It’s not going to get easier. It’s going to get harder. So we might as well do it now — pull off the Band-Aid, eat our peas.” He added, “We keep on talking about this stuff, and we have these high-minded pronouncements about how we’ve got to get control of the deficit and how we owe it to our children and our grandchildren. Well, let’s step up. Let’s do it. I’m prepared to do it. I’m prepared to take on significant heat from my party to get something done. And I expect the other side should be willing to do the same thing.”
  Mr. Obama did not shake Republicans’ resolve to oppose any increases in taxes for wealthy Americans and businesses, as he proposes. “Eat our peas?” asked a mocking news release from the office of Speaker John A. Boehner, Republican of Ohio, placing the blaming for the impasse on Mr. Obama for demanding “job crushing tax hikes.”… – NYT, 7-12-11
• Boehner-Cantor rivalry affecting debt talks It’s not the first sign of friction between the two Republican leaders: A long-simmering rivalry between the top two Republicans in the House has tumbled into the open, with far-reaching implications for deficit-reduction negotiations with the White House.
  Speaker John A. Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) are at odds over President Obama’s call for a massive deficit-reduction package to address fiscal problems and provide for an increase in the country’s $14.3-trillion borrowing limit before an Aug. 2 deadline.
  In private talks with the White House, Boehner favored a large package as part of pragmatic political deal-making. But Cantor, speaking for staunch conservatives in Congress, is opposed.
  In a briefing Monday, Cantor downplayed the divisions, insisting repeatedly that he and the speaker were “on the same page.” But friction between the two has grown obvious, reinforcing months-old questions over who controls House Republicans.
  “I don’t think Boehner would want to serve in a foxhole anytime with Eric Cantor,” said a Republican strategist and former leadership aide who asked not to be identified while commenting on an intraparty rivalry…. – LAT, 7-12-11
• Budget Talks Beginning to Take On a Testy Air: Even before they gathered around a long table in the Cabinet Room for another round of budget negotiations on Monday, President Obama and Republican leaders began taking shots at one another.
  Mr. Obama declared at a news conference that he would not sign a “stopgap” measure to avert a federal default, and he challenged Republicans to “eat your peas” by supporting a large deficit-reduction deal. Speaker John A. Boehner countered that Republicans would not back a package with any tax increases, and said that even agreeing to an increase in the debt limit was a big concession.
  Once the private meeting actually started, the fireworks subsided, Democratic and Republican officials briefed on the talks said, though if anything, the debate over specific policy choices served only to reinforce the chasm between the two sides. The officials described a cordial, though intense, debate in which Mr. Obama and the eight leaders from both parties delved deeply into the nitty-gritty.
  Mr. Obama, after restating his pitch for a far-reaching deal that could produce savings of $4 trillion or so over a decade, turned the floor over to the House majority leader, Representative Eric Cantor of Virginia. Mr. Cantor, Democratic officials said, presented a Republican proposal for a more modest agreement that drew heavily on earlier negotiations steered by Vice President Joseph R. Biden Jr…. – NYT, 7-12-11
• Delayed payments in 1979 offer glimpse of default consequences: In fact, there was one short-lived incident in the spring of 1979 that offers a glimpse of some of the problems and costs that might arise if the stalemate on Capitol Hill continues. Then, as now, Congress had been playing a game of chicken with the debt limit, raising it to $830 billion – compared with today’s $14.3 trillion – only after Treasury Secretary W. Michael Blumenthal warned that the country was hours away from the first default in its history…. – WaPo, 7-11-11
• David Frum: U.S. conservatives in denial over impact of debt default: The U.S. government is the largest purchaser of goods and services on planet Earth.
  The government buys everything from equipment for cancer research to metal for warships to toothpicks for federal cafeterias. Suppose the government had to cut 44% from its budget on two weeks notice? How sharp a shock would that be to the world economy?
  Here’s a comparative. In the worst quarter of 2009, American consumers cut their spending by … not 44%, not even 4.4%, but 1.2%. That 1.2% drop in consumer spending helped tumble the economy into the worst collapse since the 1930s.
  The U.S. consumer sector is even larger than the federal government sector. But it’s not unimaginably larger. U.S. consumers spend about $10 trillion a year. The federal government spends about $3.4 trillion.
  If a cut of 1.2% from $10 trillion was an economic shock, a cut of 44% from $3.4 trillion will be a much, much, much bigger shock.
  Yet a huge portion of conservative punditry this week amounts to a sustained denial of this seemingly self-evident arithmetic fact…. – National Post, 7-12-11Eric Cantor: We don’t believe you ought to be raising taxes right now, in this economy, and they do. That is the difference. If the President wants the debt ceiling raised, the House will not raise taxes. That is just what it is.John Boehner: “The president continues to insist on raising taxes, and [Democrats] are just not serious enough about fundamental entitlement reform to solve the problem. It takes two to tango, and they’re not there yet.” — Boehner says Dems not willing to make debt deal: Republican House Speaker says debt ceiling must be raised, but Democrats must get “serious” about entitlement reform, no tax hikes…. -
• CBS News, 7-11-11Obama rules out short-term deal on debt ceiling: President Obama said Monday that he would not consider stopgap measures to temporarily avert the debt-ceiling crisis, saying “that is just not an acceptable approach.”
  Obama spoke after Republicans rejected a deficit-reduction framework that would raise taxes and cut entitlements. “I continue to push congressional leaders for the largest possible deal,” Obama said at a White House news conference. He added, “I will not sign” a short-term extension.“This is the United States of America. We don’t manage our affairs in three-month increments. We don’t risk default on our obligations because we can’t put politics aside.” — Barack Obama
• Obama: Time to “eat our peas” and pass debt deal: President Obama is still seeking the largest deficit reduction deal possible as part of a package deal to raise the debt ceiling, he said in a press conference today.
  “I continue to push congressional leaders for the largest possible deal,” he said from the White House. “It is possible for us to construct a package that would be balanced, share sacrifice [and] would involve both parties taking on their sacred cows.”
  Mr. Obama would not even entertain the notion of failing to get a deal done before the end of the month. “We are going to get this done by August 2,” he said.
  Mr. Obama said today that he appreciated Boehner’s efforts to try to reach a large deal with him, but that the rest of the GOP must now step up to the plate.
  “I’ve been hearing from my Republican friends for some time it is a moral imperative to tackle our debt and deficits in a serious way,” Mr. Obama said. “What I’ve said to them is, let’s go.”
  The president said today he would not accept a smaller, short-term deal. “We might as well do it now,” he said. “Pull off the band aid. Eat our peas.”… – CBS News, 7-11-11
• At news conference, Obama portrays himself as compromiser-in-chief: President Obama says he will not sign a three to six-month bill to raise the nation’s debt ceiling and instead is calling on Republicans to set aside stubborn politics and agree on a long-term compromise before the country hits the debt limit Aug. 2.
  His administration is not making contingency plans for the event that Congress won’t vote to raise the debt ceiling in time, Obama told reporters this morning, predicting in a morning press conference that “we are going to get this done” before the deadline.
  As leaders prepared for an afternoon meeting at the White House, Obama pledged to bring Republicans and Democrats together “every single day” until they work out an agreement to avert a credit default with an agreement on debt and deficit reduction.
  Republicans have been saying for months that it’s a “moral imperative” for the president and Congress to tackle debts and deficits, Obama said, arguing that he has moved toward their position in hopes of working out a compromise.
  “What I’ve said to them is, ‘Let’s go,’” Obama said in a morning press conference in the White House briefing room. Such a deal would let Americans knows “this town can actually do something once in a while.”… – LAT, 7-11-11
• Obama Presses GOP for Big Deficit Deal: President Barack Obama on Monday said he won’t support a short-term deficit-cutting deal and continued to press for a more ambitious agreement involving taxes after a Sunday evening summit with congressional leaders failed to produce a deal.
  Mr. Obama, speaking at a televised news conference, said the American people feel a sense of urgency on the deficit talks and want results.
  The president insisted he wouldn’t support a short-term deal to raise the U.S. borrowing limit. “We don’t manage our affairs in three-month increments,” he said.
  Mr. Obama, speaking ahead of another negotiating session scheduled for 2 p.m. EDT Monday, said both sides have to move off their starting positions. “If not now, when?” He said later, it’s time to “pull off the Band Aid.”
  The main sticking points remain taxes and cuts to entitlement programs. Mr. Obama and Democrats are still pushing for a grand bargain that would slash about $4 trillion from the deficit over about 10 years. Republicans say such a package isn’t palatable because it includes tax increases that rank-and-file members won’t stomach.
  “I have bent over backwards to try to work with Republicans” on taxes, Mr. Obama said. He said he doesn’t favor tax increases, but wants to end a series of loopholes for oil and gas companies and the wealthy. Republicans have said ending tax subsidies and tax breaks amounts to tax increases. He said he is also willing to overhaul the tax code so long as it is “sufficiently progressive.”… – WSJ, 7-11-11
• Obama presses ahead with debt talks, warns against stopgap solution: President Obama, facing a bitter partisan stalemate over how to raise the federal borrowing limit, summoned congressional leaders to a new round of White House talks Monday and warned that he would not accept a temporary, stopgap measure.
  “That is not an acceptable approach,” he told a news conference ahead of the scheduled talks. “So we might as well do it now. Pull off the Band-Aid. Eat our peas. Now is the time to do it. If not now, when?”… – WaPo, 7-11-11
• Obama, leaders take last stab at $4 trillion deal: President Obama refused to back down Sunday night from seeking a landmark compromise that would slash about $4 trillion over 10 years from budget deficits and raise the government’s $14.3 trillion debt limit.
  President Obama meets with House Speaker John Boehner and Senate Majority Leader Harry Reid to negotiate the national debt.
  In a rare weekend meeting at the White House, Obama sought to convince recalcitrant lawmakers that tax increases on upper-income Americans and major cuts in popular health care and retirement programs still were within reach — despite Republicans’ pessimism. He will reiterate his case in a news conference this morning.
  Obama’s pitch didn’t convince congressional leaders. Senate GOP leader Mitch McConnell said Obama’s insistence on ending tax cuts for couples with income above $250,000 was a non-starter. House Democratic leader Nancy Pelosi raised doubts about proposed cuts to Medicare, Medicaid and Social Security.
  If Obama’s last-ditch effort fails, negotiators still could seek about $2.4 trillion in deficit reduction and an equal increase in the debt limit, enough to get them past the 2012 elections. They had agreed on about two-thirds of that amount in June when Republicans balked at new taxes and walked out.
  With three weeks left before the government can no longer borrow money, reaching even that lower threshold will be difficult, Treasury Secretary Timothy Geithner acknowledged Sunday…. – USA, 7-10-11
• Obama set for debt negotiations all week – official: President Barack Obama told top U.S. lawmakers on Sunday to be prepared to meet every day this week to hash out a deal to cut the federal budget and raise the debt limit, a Democratic source with knowledge of the talks said.
  The Democratic official said that Obama pressed Republicans at a White House meeting to aim for a broad, $4 trillion deficit-reduction package rather than a more modest one…. – Reuters, 7-11-11
• Debt Ceiling Negotiations Enter Round 3: The debt and deficit negotiations are now aimed at accomplishing two goals. The first goal for all sides sitting around the table is to get a deal in place by Aug. 2 to avoid any negative impact on the economy. The second goal, which is being pursued concurrently, is to emerge from the talks as the political winner. The latter clearly complicates the former.
  The eight Republican and Democratic congressional leaders will be back in the Cabinet Room in the White House Monday afternoon with President Obama and Vice President Joe Biden for their third such meeting over the last five days.
  The president continues to apply pressure on House Speaker John Boehner and his fellow Republicans by pushing for a “grand bargain” that includes entitlement reforms many in his own party oppose. With the president willing to put Medicare, Medicaid and Social Security on the chopping block, it begs the question of where Rep. Boehner is willing to compromise.
  But math is a stubborn thing. Boehner clearly came to the conclusion this weekend that he simply cannot pass a deal through his conference that includes any tax increases…. – PBS Newshour, 7-11-11
• US debt talks: ‘trust gap’ between negotiators, rank and file in Congress: Details of the US debt and deficit talks have been mostly secret, fueling concerns on both sides of the aisle that their leaders will compromise party values or give away too much…. – CS Monitor, 7-11-11

JULY 10, 2011: CONGRESSIONAL LEADERS MEET AGAIN AT WHITE HOUSE

“Congress has to act. If they don’t act, then we face catastrophic damage to the American economy, and the leadership, to their credit, and I mean Republicans and Democrats, fully understand that.” — Treasury Secretary Timothy F. Geithner said on the CBS News program “Face the Nation.

“Congress has to act. If they don’t act, then we face catastrophic damage to the American economy, and the leadership, to their credit, and I mean Republicans and Democrats, fully understand that.” — Treasury Secretary Timothy F. Geithner said on the CBS News program “Face the Nation.”

“I disagree with that. I can tell you the president is determined to keep us there and make certain that we’re focused on the fact the decisions we make in that room will affect families across America and decide if this economy is going to recover. If we falter, if we don’t have sufficient political courage and will to get this done and this economy is going to be hurt then it is going to fall on our shoulders.” — Senate Majority Whip Dick Durbin, D-Ill.

“It’s disappointing that the president is unable to bring his own party around to the entitlement reform that he put on the table. And it’s baffling that the president and his party continue to insist on massive tax hikes in the middle of a jobs crisis while refusing to take significant action on spending reductions at a time of record deficits.” — Senate Minority Leader Mitch McConnell spokesman Don Stewart after Sunday evening’s White House meeting

• Obama, GOP back to where they started: The debt ceiling: It started with a simple objective: Raise the $14.3 trillion debt ceiling. Then the Republicans began demanding big budget cuts in exchange for increasing the debt ceiling. Then the Democrats began demanding higher taxes for wealthy in order to close the debt down the line.
  Now — given bleak prospects for a big deal involving all those elements, the so-called “grand bargain” — President Obama and the Republicans are back to where the started, trying to put together a new deal to raise the debt ceiling. Except that now they’re even closer to a government default on its existing debts…. – USA Today, 7-11-11
• Obama: ‘We need to’ work out debt deal in 10 days: Grasping for a deal on the nation’s debt, President Barack Obama and congressional leaders remained divided Sunday over the size and the components of a plan to reduce long term deficits. Saying “we need to” work out an agreement over the next 10 days, the president and lawmakers agreed to meet again Monday.
  Obama also sought to use the power of his office to sway public opinion, scheduling a news conference for Monday morning, his second one in less than two weeks devoted primarily to the debt talks.
  Officials familiar with the meeting said Obama pressed the eight House and Senate leaders Sunday evening to continue aiming for a massive $4 trillion deal for reducing the debt.
  But there appeared to be little appetite for such an ambitious plan and the political price it would require to pass in Congress. Instead, House Speaker John Boehner told the group that a smaller package of about $2 trillion to $2.4 trillion was more realistic…. – AP, 7-11-11
• With Debt Talks Stalled, What Happens Now?: According to various reports, both President Obama and Speaker of the House John Boehner were willing to go bold. A $4 trillion debt-reduction package, one that would include about $1 trillion in new revenue (tax increases) over ten years, was being discussed by the end of last week. But the House GOP revolted over the taxes, and Boehner, a reasonable person made powerless in the face of his no-compromise caucus, backed away from a grand bargain. So where does that leave us?
  July 22 has been previously identified as the latest a deal can be reached in order to give Congress enough time to write the law, vet it, and pass it, so time is of the essence. Obama will hold another press conference today to make his case to the media and the public as a way to pressure the GOP, after which another meeting will be held with congressional leaders of both parties. Republicans want a deal based on the $2 trillion to $2.4 trillion in spending cuts previously identified by the talks overseen by Joe Biden. But Chris Van Hollen, a top House Democrat, said only $1 trillion in cuts had been identified, and Republicans were “dreaming” if they thought the number was $2.4 trillion…. – NY Magazine, 7-11-11“We came into this weekend with the prospect that we could achieve a grand bargain. We are still hopeful for a large bipartisan agreement.” — House Minority Leader Nancy Pelosi
• Debt reduction talks in limbo as clock ticks toward Aug. 2 deadline: Talks among President Obama and congressional leaders Sunday evening failed to break a partisan stalemate over how to raise the federal borrowing limit, leaving the politically charged negotiations in limbo three weeks before the administration says the country will begin to default.
  The White House meeting adjourned after roughly 75 minutes without agreement over how far the parties should go in cutting the deficit over the next decade or whether tax cuts and entitlement reductions should be a part of any deal. Congressional leaders will return to the White House on Monday to continue talks, administration officials announced, and Obama will hold a morning news conference before they do.
  Both sides appeared Sunday to dig further into their positions, leaving the talks deadlocked, a historic default looming and a fragile economy increasingly vulnerable to the consequences of Washington’s entrenched partisanship and ideological divide over taxes and entitlements…. – WaPo, 7-10-11
• Geithner: We want ‘biggest deal possible’ on debt: Treasury Secretary Timothy Geithner says the Obama administration wants to seek “the biggest deal possible” on debt reduction…. – AP, 7-10-11
• For Boehner, Lofty Budget Goals Checked by Reality: At a private meeting about deficit reduction at the White House last week, Speaker John A. Boehner told his fellow Congressional leaders and President Obama that he did not spend 20 years working his way up to the top job on Capitol Hill just for the cachet of the title — he wanted to accomplish something big.
  So he and the president pursued an ambitious plan that would have reduced spending by as much as $4 trillion over 10 years. It was a transformative proposal, with the potential to improve the ugly deficit picture by shrinking the size of government, overhauling the tax code and instituting consensus changes to shore up Medicare and even Social Security. It was a once-in-a-decade opening.
  But the speaker’s lofty ambitions quickly crashed into the political reality of a divided, highly partisan Congress. His decision on Saturday night to abandon the comprehensive deficit-reduction package, citing the White House’s insistence on tax increases, was a sharp reversal. It highlighted the challenge he faces in persuading his party to tolerate any compromise on government spending and exposed the fissures within his own leadership team over how to proceed…. – NYT, 7-10-11
• Obama Leans on G.O.P. for a Deal on Debt Ceiling: President Obama tried on Sunday to revive the chances for a sweeping budget agreement to reduce the nation’s deficit and repair its perilous finances, but Congressional Republicans continued to balk, insisting on a more modest deal to avert a default on the national debt.
  Mr. Obama, meeting with leaders from both parties at the White House, bluntly challenged Republicans a day after Speaker John A. Boehner pulled back from a far-reaching agreement aimed at saving as much as $4 trillion over 10 years, officials briefed on the negotiations said. The meeting ended after an hour and 15 minutes with little progress, but the two sides agreed to resume talking Monday, and every day after that, until a deal is done.
  White House officials said Mr. Obama was still determined to pursue the boldest package possible — one that would require new tax revenue as well as cuts in Medicare and other entitlement programs — but he faces steadfast opposition from Republicans and growing qualms among Democrats…. – NYT, 7-10-11
• John Boehner’s ‘grand bargain’ – with House GOP: Speaker John Boehner’s decision not to “go big” on a debt-limit deal is the starkest demonstration yet of the limits of the Ohio Republican’s power.
  The internal GOP backlash against his efforts to secure a package of $4 trillion in spending cuts and revenue-raisers revealed that Boehner sometimes is little more than the first among equals — capable of synthesizing Republican sentiments but unwilling to drive them.
  Tax hikes, by any name, are a nonstarter for a party that forged its brand on the mantra of lower taxes and less government, and Boehner’s willingness to talk rates with President Barack Obama — particularly in the context of House Majority Leader Eric Cantor’s (R-Va.) refusal to do so — raised eyebrows within his conference. The uproar among Republicans, on and off Capitol Hill, forced Boehner to back away from the “grand bargain,” setting up a testy White House meeting where little was accomplished Sunday night…. – Politico, 7-11-11
• House, Senate leaders meet Sunday on debt talks: A group of top House and Senate leaders meet Sunday at the White House, a day after Republican negotiators abandoned plans to pursue a massive $4 trillion deficit reduction package in the face of stiff party opposition to any plan with tax increases as part of the deal.
  A deficit reduction deal is crucial to win Republican support for an increase in the nation’s debt ceiling. The government’s borrowing capacity is currently capped at $14.3 trillion and administration officials say it will go into default without action by Aug. 2. The Treasury Department says economic chaos could ensue if it can’t borrow more money.
  Both parties are under pressure from voters to resolve the debt crisis ahead of next year’s congressional and presidential elections. Obama is seen as a candidate that is tough to beat, though voters’ fears over the economy have been dragging down his numbers.
  Eight of the top House and Senate leaders were scheduled to meet at the White House in a negotiating session Sunday evening and lay out their remaining differences…. – AP, 7-10-11
• Obama, lawmakers to meet again as debt clock ticks: With pressuring continuing to build but no breakthroughs in sight, budget bargaining between President Barack Obama and top lawmakers resumes Monday at the White House, with both sides hoping to slash the deficit as the price for permitting the government to borrow more than $2 trillion to pay its bills.
  In a rare Sunday meeting in the White House Cabinet Room, Obama continued to push for a “grand bargain” in the range of $4 trillion worth of deficit cuts over the coming decade, but momentum is clearly on the side of a smaller measure of perhaps half that size. Obama continues to press for revenue increases as part of any agreement but Republicans remain stoutly opposed — despite some private hints to the contrary last week by House Speaker John Boehner, R-Ohio.
  Obama holds a news conference Monday morning. The third White House meeting since Thursday is slated for the afternoon…. – ap, 7-10-11
• Ross Douthat: The Method to Their Madness: The Republican Party’s strategy in the debt-ceiling negotiations has baffled centrists and vindicated liberals. For months, the party’s leaders have repeatedly turned down deals that would cut spending significantly because their members won’t compromise on taxes. To moderates, this intransigence is inexplicable: Are they crazy? To the left, it’s all-too-predictable: See, we told you they were crazy!
  But there is a method to the Republicans’ madness, and it rests on four things they know (or at least sense) about the deficit debate that the rest of the political class often ignores.
  Barack Obama wants a right-leaning deficit deal. For months, liberals have expressed frustration with the president’s deficit strategy. The White House made no effort to tie a debt ceiling vote to the extension of the Bush tax cuts last December. It pre-emptively conceded that any increase in the ceiling should be accompanied by spending cuts. And every time Republicans dug in their heels, the administration gave ground…. – NYT, 7-10-11
• Bruce Bartlett: Five myths about the debt ceiling: In recent months, the federal debt ceiling — last increased in February 2010 and now standing at $14.3 trillion — has become a matter of national debate and political hysteria. The ceiling must be raised by Aug. 2, Treasury says, or the government will run out of cash. Congressional Republicans counter that they won’t raise the debt limit unless Democrats agree to large budget cuts with no tax increases. President Obama insists that closing tax loopholes must be part of the package. Whom and what to believe in the great debt-limit debate? Here are some misconceptions that get to the heart of the battle….
  

  1. The debt limit is an effective way to control spending and deficits.
  2. Opposition to raising the debt limit is a partisan issue.
  3. Financial markets won’t care much if interest payments are just a few days late — a “technical default.”
  4. It’s worth risking default on the debt to prevent a tax increase, given the weak economy.
  5. Obama must accept GOP budget demands because he needs Republican support to raise the debt limit….

  - WaPo, 7-7-11

JULY 9, 2011: HOUSE SPEAKER JOHN BOEHNER ABANDONS COMPREHENSIVE DEBT DEAL

Boehner abandons efforts to reach comprehensive debt-reduction deal: House Speaker John A. Boehner (R-Ohio) abandoned efforts Saturday night to reach a comprehesive debt-reduction deal, telling President Obama that a mid-size package was the only politically possible alternative to avoid a first-ever default on the nation’s mounting national debt.

“Despite good faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure.” — John Boehner

“Both parties have made real progress thus far, and to back off now will not only fail to solve our fiscal challenge, it will confirm the cynicism people have about politics in Washington. The president believes that now is the moment to rise above that cynicism and show the American people that we can still do big things. And so tomorrow, he will make the case to Congressional leaders that we must reject the politics of least resistance and take on this critical challenge.” — Dan Pfeiffer, the White House communications director, White House Statement

• Boehner abandons goal of $4 trillion debt-reduction package: House Speaker John Boehner, Republican of Ohio, abandoned efforts last night to reach a comprehensive debt-reduction deal worth more than $4 trillion in savings, telling President Obama that a midsize package was the only politically possible alternative to avoid a first-ever default on the nation’s mounting national debt.
  Boehner told Obama – who is hosting a key meeting tonight on the debt issue – that their efforts to “go big,’’ as the speaker says, were stymied by the toughest issues: taxes and entitlements.
  Democrats continued to insist on tax changes that would not pass muster in the conservative-dominated House, and Republicans wanted cuts to programs such as Medicare and Social Security that Obama and Senate Democrats would oppose.
  “Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase,” Boehner said…. – Boston Globe, 7-9-11
• Deficit Talks Scaled Back Over Tax Increases: Citing differences over tax revenues, House Speaker John A. Boehner said on Saturday night that he would pull back from joint efforts with President Obama to reach a sweeping $4 trillion deficit-reduction plan tied to a proposal to increase the federal debt limit.
  On the eve of a second round of high-level bipartisan talks set for Sunday, Mr. Boehner issued a statement saying he would now urge negotiators to instead focus on crafting a smaller package more in line with the $2 trillion to $3 trillion in spending cuts and revenue increases negotiated earlier by Vice President Joseph R. Biden Jr.
  “Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes,” Mr. Boehner said. “I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase.”
  The decision was a major reversal for Mr. Boehner, a veteran Congressional deal-maker who along with Mr. Obama had been the major advocate for seeking a far-reaching deal that would have combined a debt limit increase with substantial spending cuts, significant changes in social programs like Medicare, Medicaid and perhaps Social Security, and as much as $1 trillion in new revenues. Following a secret meeting between the two last weekend, Mr. Obama went public with his own call for a broad package…. – NYT, 7-9-11
• Social Security: the political monster that lurks in debt talks: Long the “third rail” of politics, Social Security has emerged as a part of bipartisan talks aimed at stabilizing America’s public debt. Will it finally be restructured to reflect today’s economy?… – CS Monitor, 7-9-11

JULY 8, 2011: 1ST CONGRESSIONAL LEADERS WHITE HOUSE MEETING

Larry Downing/ReutersPresident Obama discussed deficit reduction at the White House Thursday with, from left, Nancy Pelosi, the House Democratic leader; House Speaker John A. Boehner; and Harry Reid, the Senate majority leader.

• Debt Deal Could Rewrite 2012 Political Calculus: Are the far right and far left in Washington about to be thrown under the bus? The assumption for months has been that Democrats would play to their base during the 2012 election cycle, using the specter of tax cuts for the rich and Medicare cuts to rally liberals behind President Obama and Democratic candidates.
  On the right, it seemed certain that Republican presidential hopefuls and Congressional candidates would pander to the Tea Party wing of their party with demands for ever greater spending cuts and “read my lips” declarations when it comes to the idea of higher taxes.
  But what if Mr. Obama and House Speaker John A. Boehner turn that political calculation on its head?
  Negotiations over the nation’s deficit and debt suggest that both men are looking beyond the wishes of their most ardent supporters toward the larger, more moderate parts of the electorate. What could emerge in the next few days is a package that infuriates the right by raising the debt ceiling, disappoints the left by cutting Medicare, and gets passed largely by politicians who are willing to compromise…. – NYT, 7-8-11Remarks by the President on the Status of Efforts to Find a Balanced Approach to Deficit Reduction James S. Brady Press Briefing Room: 1:02 P.M. EDT
  

  THE PRESIDENT: Hello, everybody. I’m going to make a very brief statement.
  I just completed a meeting with all the congressional leaders from both chambers, from both parties, and I have to say that I thought it was a very constructive meeting. People were frank. We discussed the various options available to us. Everybody reconfirmed the importance of completing our work and raising the debt limit ceiling so that the full faith and credit of the United States of America is not impaired.
  What we decided was that staffs, as well as leadership, will be working during the weekend, and that I will reconvene congressional leaders here on Sunday with the expectation that, at that point, the parties will at least know where each other’s bottom lines are and will hopefully be in a position to then start engaging in the hard bargaining that’s necessary to get a deal done.
  I want to emphasize that nothing is agreed to until everything is agreed to. And the parties are still far apart on a wide range of issues. But, again, I thought that all the leaders here came in a spirit of compromise, in a spirit of wanting to solve problems on behalf of the American people. Everybody acknowledged that the issue of our debt and our deficit is something that needs to be tackled now. Everybody acknowledged that in order to do that, Democrats and Republicans are going to be required in each chamber. Everybody acknowledged that we have to get this done before the hard deadline of August 2nd to make sure that America does not default for the first time on its obligations. And everybody acknowledged that there’s going to be pain involved politically on all sides, but our biggest obligation is to make sure that we’re doing the right thing by the American people, creating an environment in which we can grow the economy and make sure that more and more people are being put back to work.
  So I want to thank all the leaders. I thought it was a very constructive meeting. And I will be seeing them back here on Sunday. A lot of work will be done between now and then.

  END 1:05 P.M. EDT — WH, 7-11-11

JULY 5, 2011: OBAMA’S SUMMONS CONGRESS

John Boehner: “I’m pleased the president stated today that we need to address the big, long-term challenges facing our country.”

• Obama Summons G.O.P. and Democratic Leaders for Deficit Reduction Talks: President Obama stepped up pressure on Congressional Republicans on Tuesday to agree to a broad deficit-cutting deal, pledging to put popular entitlement programs like Medicare on the table in return for Republican acquiescence to some higher taxes. In the Senate, Jeff Sessions, Republican of Alabama, spoke to other members of the Senate Budget Committee.
  Mr. Obama, who met secretly with Speaker John A. Boehner at the White House on Sunday to try to advance the talks, called House and Senate leaders from both parties to the White House for further negotiations on Thursday. And he rejected talk of an interim deal that would get the government past a looming deadline on raising the federal debt limit without settling some of the longer-term issues contributing to the government’s fiscal imbalances.
  “We’ve got a unique opportunity to do something big, to tackle our deficit in a way that forces our government to live within its means,” he said in an appearance in the White House briefing room, casting himself as much an honest broker as a partisan participant in the talks. “This will require both parties to get out of our comfort zones, and both parties to agree on real compromise.”… – NYT, 7-6-11
• Can President Obama just ignore the debt limit?: Some economists suggest that the 14th Amendment renders the debt limit conversation moot (and maybe unconstitutional): the US must pay its debts. Period…. – CS Monitor, 7-5-11
• Can President Obama jump-start debt talks?: President Obama has invited congressional leaders to the White House Thursday to try to resolve the stalemate over raising the debt limit. The deadline for a deal is Aug. 2…. – CS Monitor, 7-5-11
• Summoning lawmakers, Obama seeks to break debt impasse: The president will meet with House and Senate leaders of both parties to try to end a standoff on raising the national debt limit…. – LAT, 7-5-11Remarks by the President on the Status of Efforts to Find a Balanced Approach to Deficit Reduction: James S. Brady Press Briefing Room
  4:49 P.M. EDT

  THE PRESIDENT: All right. Hello, everybody. I just wanted to give you an update on the deficit negotiations that we’ve been having for the last several weeks, and I want to wish, again, everybody a Happy Fourth of July.
  Over the July Fourth weekend, my team and I had a series of discussions with congressional leaders in both parties. We’ve made progress, and I believe that greater progress is within sight, but I don’t want to fool anybody — we still have to work through some real differences.
  Now, I’ve heard reports that there may be some in Congress who want to do just enough to make sure that America avoids defaulting on our debt in the short term, but then wants to kick the can down the road when it comes to solving the larger problem of our deficit. I don’t share that view. I don’t think the American people sent us here to avoid tough problems. That’s, in fact, what drives them nuts about Washington, when both parties simply take the path of least resistance. And I don’t want to do that here.
  I believe that right now we’ve got a unique opportunity to do something big — to tackle our deficit in a way that forces our government to live within its means, that puts our economy on a stronger footing for the future, and still allows us to invest in that future.
  Most of us already agree that to truly solve our deficit problem, we need to find trillions in savings over the next decade, and significantly more in the decades that follow. That’s what the bipartisan fiscal commission said, that’s the amount that I put forward in the framework I announced a few months ago, and that’s around the same amount that Republicans have put forward in their own plans. And that’s the kind of substantial progress that we should be aiming for here.
  To get there, I believe we need a balanced approach. We need to take on spending in domestic programs, in defense programs, in entitlement programs, and we need to take on spending in the tax code — spending on certain tax breaks and deductions for the wealthiest of Americans. This will require both parties to get out of our comfort zones, and both parties to agree on real compromise.
  I’m ready to do that. I believe there are enough people in each party that are willing to do that. What I know is that we need to come together over the next two weeks to reach a deal that reduces the deficit and upholds the full faith and credit of the United States government and the credit of the American people.
  That’s why, even as we continue discussions today and tomorrow, I’ve asked leaders of both parties and both houses of Congress to come here to the White House on Thursday so we can build on the work that’s already been done and drive towards a final agreement. It’s my hope that everybody is going to leave their ultimatums at the door, that we’ll all leave our political rhetoric at the door, and that we’re going to do what’s best for our economy and do what’s best for our people.
  And I want to emphasize — I said this at my press conference — this should not come down to the last second. I think it’s important for us to show the American people and their leaders that we can find common ground and solve our problems in a responsible way. We know that it’s going to require tough decisions. I think it’s better for us to take those tough decisions sooner rather than later.
  That’s what the American people expect of us. That’s what a healthy economy is going to require. That’s the kind of progress that I expect to make. So I promise I will keep you guys updated as time goes on. All right?
  Q A couple of questions?
  Q Will you take any questions, Mr. President?
  THE PRESIDENT: I guarantee you, Jay is going to take a whole bunch of them. (Laughter.)

  END 4:54 P.M. EDT

  In debt talks, Obama offers Social Security cuts: President Obama is for the first time offering to tackle the rising cost of Social Security as part of a far-reaching plan to restrain the spiraling national debt, according to people in both parties familiar with the proposal.
  The move marks a major shift for the White House and could present a direct challenge to Democratic lawmakers who have vowed to protect health and retirement benefits from a Republican assault on government spending.

• President Looks for Broader Deal on Deficit Cuts: Heading into a crucial negotiating session on a budget deal on Thursday, President Obama has raised his sights and wants to strike a far-reaching agreement on cutting the federal deficit as Speaker John A. Boehner has signaled new willingness to bargain on revenues.
  Mr. Obama, who is to meet at the White House with the bipartisan leadership of Congress in an effort to work out an agreement to raise the federal debt limit, wants to move well beyond the $2 trillion in savings sought in earlier negotiations and seek perhaps twice as much over the next decade, Democratic officials briefed on the negotiations said Wednesday.
  The president’s renewed efforts follow what knowledgeable officials said was an overture from Mr. Boehner, who met secretly with Mr. Obama last weekend, to consider as much as $1 trillion in unspecified new revenues as part of an overhaul of tax laws in exchange for an agreement that made substantial spending cuts, including in such social programs as Medicare and Medicaid and Social Security — programs that had been off the table…. – NYT, 7-6-11
• Obama, Democrats not ready to play 14th Amendment card with debt ceiling: Law professors, Democratic senators and liberal commentators have recently raised a tantalizing possibility for ending the congressional wrangling over raising the federal limit on borrowing: President Obama could simply declare the debt ceiling unconstitutional and be done with it.
  Advocates of this approach cite the 14th Amendment of the Constitution, which states that the “validity of the public debt of the United States . . . shall not be questioned.”
  On Wednesday at a White House question-and-answer session held via the Web service Twitter, Obama said the debate over raising the $14.3 trillion debt ceiling shouldn’t become a constitutional question.
  “I don’t think we should even get to the constitutional issue. Congress has a responsibility to make sure we pay our bills. We’ve always paid them in the past,” Obama said. “The notion that the U.S. is going to default on its debt is just irresponsible.”… – WaPo, 7-6-11

Political Buzz June 1, 2011: House Vote Rejects Increase in National Debt Ceiling

POLITICAL BUZZ

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

OBAMA PRESIDENCY & THE 112TH CONGRESS:

House rejects proposal to raise debt ceiling: The House rejected a plan to raise the limit on government borrowing, in a symbolic vote of 318 to 97, setting the stage for a contentious debate with President Obama over debt reduction.

House Vote 379 – Rejects Increase in National Debt Ceiling: Yes: 97 Democrats
No: 318; 236 Republicans, 82 Democrats
Present: 7 Democrats
Did Not Vote: 10

H.R.1954 — To implement the President’s request to increase the statutory limit on the public debt. (Introduced in House – IH) 112th CONGRESS — 1st Session — H. R. 1954 — FULL TEXT OF BILL

• Eric Cantor: Tonight’s House vote against a clean debt limit increase should serve as a clear demonstration to Secretary Geithner that there is no support in the House for a debt limit increase without real spending cuts and binding budget process reforms.
• Debt-limit hike fails in House in symbolic vote: The House of Representatives on Tuesday defeated a bill to raise the debt limit in a vote staged by Republicans to strengthen their push for deep spending cuts in negotiations with the White House.
  By a vote of 318-97, the chamber overwhelmingly rejected President Barack Obama’s call to increase the $14.3 trillion debt limit without conditions. Even some Democrats supporting Obama’s position voted against it.
  “I’m going to advise my members that they not subject themselves to the demagoguery that is sure to follow” if they vote for the measure, chief Democratic vote-counter Steny Hoyer said before the vote.
  Polls show the public does not support a further increase in borrowing authority even as the Treasury Department scrambles to avoid a default that could push the country back into recession and rattle markets across the globe. Reuters, 5-31-11
• House rejects bill to increase federal debt ceiling: With an August deadline looming, the House overwhelmingly refused Tuesday to raise the legal limit on government borrowing, setting the stage for a long, sweaty summer of haggling over the shape of the largest debt-reduction package in at least two decades.
  The vote was 318-97, with not a single GOP lawmaker supporting the measure to raise the limit on the national debt from $14.3 trillion to $16.7 trillion – a sum sufficient to cover the government’s bills through the end of next year. Republican leaders said their troops would reject any increase without a plan to sharply curtail spending and, thus, future borrowing.
  “The American people are fed up with an endless diet of debt-backed spending,” said Rep. Todd Akin, R-Mo., a member of the House Budget Committee. Without “a solid, long-term balanced budget plan, it is simply foolish to continue to increase the nation’s debt limit.”
  Democrats, too, are leery of supporting a higher debt limit, which polls show is extremely unpopular with a large majority of voters. On Tuesday, they abandoned the debt-limit measure in droves, ignoring a long-standing request from the Obama administration to raise the limit before plunging into a complex and politically difficult battle over the size of the federal budget.
  “I don’t intend to advise our members to subject themselves to a 30-second political ad and attack,” House Minority Leader Steny Hoyer, D-Md., said hours before the vote, noting that GOP leaders had offered the bill with the intention of letting their members vote against it…. – WaPo, 6-1-11
• Pressing Obama, House Bars Rise for Debt Ceiling: The House on Tuesday overwhelmingly rejected a measure to increase the government’s debt limit, acting on a vote staged by Republican leaders to pressure President Obama to agree to deep spending cuts.
  Dave Camp of Michigan said a vote “will and must fail.”
  Republicans brought up the measure, which was defeated 318 to 97, to show the lack of support in the House for raising the $14.3 trillion debt ceiling without concrete steps to rein in chronic budget deficits.
  The preordained outcome followed several acts of odd political theater on the House floor: Republicans urged the defeat of their own measure, while Democrats — who not long ago were seeking just such a vote to raise the debt ceiling without attaching spending cuts — assailed Republicans for bringing it up, saying its certain defeat might unnerve the financial markets.
  Just in case, Republican leaders scheduled the vote for after the stock market’s close, and in the preceding days called Wall Street executives to assure them that the vote was just for show, to show Mr. Obama that he would have to make concessions in budget negotiations if a debt-limit increase is to pass Congress…. – NYT, 6-1-11
• Republicans press Obama on spending: Top House Republicans pressed President Barack Obama Wednesday for a detailed plan on budget cuts, and one leading lawmaker accused him of distorting a GOP Medicare proposal at the center of the partisan divide over spending.
  White House press secretary Jay Carney said the meeting was productive despite the absence of any signs of progress. He also made clear that Obama has no intention of letting up on his assertions that Rep. Paul Ryan’s plan to send future Medicare recipients into the private insurance marketplace will “end Medicare as we know it.”
  “He doesn’t believe that we need to end Medicare as we know it,” Carney said at a White House briefing, about an hour after the East Room meeting between Obama and House Republicans.
  The White House session came as the GOP sought to build pressure on Obama for trillions in spending cuts in exchange for any increase in the government’s ability to borrow.
  Afterward, dozens of rank-and-file GOP lawmakers streamed out of the front door of the White House and into a caravan of blue buses waiting for them on Pennsylvania Avenue, while members of the GOP leadership stopped on the driveway to speak to reporters and camera crews awaiting them in under a steaming sun…. – AP, 6-1-11
• The Morning Line: House GOP Heads to White House After Blocking Debt Limit Hike: If the purpose of the vote was to send a message, House Speaker John Boehner, R-Ohio, and his members will get to assess Wednesday if that message was received. The bill to increase the debt limit without any spending cuts failed, 318 to 97, without a single Republican vote.
  House Republicans will take that tally sheet to the White House Wednesday morning as the conference prepares to meet with President Obama to discuss the path forward on deficit reduction and, ultimately, raising the debt limit before the Aug. 2 deadline.
  Rep. Boehner also plans to show up at the White House with a new letter signed by 150 economists backing his proposal to make spending cuts in an amount greater than the amount requested in the debt limit increase.
  The 10 a.m. EDT meeting is closed to the press to allow for a more candid exchange of ideas according to White House Press Secretary Jay Carney. This will be the first time the president has met with the full House GOP conference since it became the majority party in that chamber in January.
  Following Tuesday night’s session, House Majority Leader Eric Cantor, R-Va., said, “[This] vote illustrates that there is no support in the people’s House for a debt limit increase without real spending cuts and binding budget process reforms.”
  Just prior to the vote, House Democratic Caucus Chairman John Larson, D-Conn., described the House activity thusly: “Look, you know, it’s politics. We get it. It’s a sham.”
  Jackie Calmes of the New York Times has the vote breakdown by party.
  “Voting against the measure were 236 Republicans and 82 Democrats. No Republicans voted in favor.
  “The showdown over the issue is likely to continue well into the summer, with consequences for both parties and, potentially, for the economy and Wall Street, where the bond market in particular is watching the partisan standoff closely. Yet for all the talk of crisis should Congress fail to raise the debt ceiling by Aug. 2, when the Treasury Department says it will run out of room to meet all the government’s obligations without further borrowing, the financial markets are likely to yawn at Tuesday’s proceedings.”… – PBS Newshour, 6-1-11
• House Republican lawmakers to meet Obama on debt: Republicans invited to a White House meeting with President Barack Obama on the troubling U.S. debt are trying to build up pressure for trillions in spending cuts in exchange for any increase in the government’s ability to borrow.
  The leader of the House of Representatives, Speaker John Boehner, released a statement Wednesday, signed by more than 150 economists, which backs his call for spending cuts that would exceed any increase in the debt limit.
  Reducing government spending and cutting the spiraling U.S. debt are expected to be major issues heading into the 2012 election season.
  “Increasing the debt ceiling without significant spending cuts and budget reforms will send a message to American job creators that we still are not serious about ending Washington’s spending addiction,” Boehner said in the statement.
  Boehner and dozens of House Republicans began arriving in buses at the White House to meet with Obama. The session comes on the heels of a symbolic and lopsided vote the day before against a Republican proposal to raise the cap on the debt limit by $2.4 trillion. The proposal, intended to prove that a bill to increase the borrowing cap with no spending cuts is dead on arrival, failed badly Tuesday on a 318-97 vote…. – AP, 6-1-11
• House G.O.P. and Obama Have ‘Frank Conversation’ on Debt: At President Obama’s invitation, House Republicans met with him on Wednesday and had a “very frank” airing of their views on reducing the federal debt, saying that the president must agree to deep spending cuts without tax increases, and drop his ideas for increasing spending to stimulate the economy. House Republicans spoke to reporters after their meeting with President Obama at the White House on Wednesday.Stephen Crowley/The New York TimesHouse Republicans spoke to reporters after their meeting with President Obama at the White House on Wednesday.
  “We had a very frank conversation,” House Speaker John A. Boehner, Republican of Ohio, said as lawmakers left the White House meeting. “I thought it was productive. I’m looking forward to more serious conversations about how we reduce the deficit and the debt to get our economy going again and creating jobs.”
  Though Friday’s monthly jobs report is expected to show continued high unemployment, the second-ranking House Republican, Representative Eric Cantor of Virginia, said Republicans told Mr. Obama that they oppose any proposals to spend more money to jump-start the economy.
  “The discussion really focused on the philosophical difference on whether Washington should continue to pump money into the economy or should we provide an incentive for entrepreneurs and small businesses to grow,” Mr. Cantor said. “The president talked about a need for us to continue to quote-unquote invest from Washington’s standpoint, and for a lot of us that’s code for more Washington spending, something that we can’t afford right now.”… – NYT, 6-1-11
• Interviews Q&A: Mitch McConnell Explains How to Get a ‘Really Big Deal’ on the Debt Ceiling: One day after Congress rejected a $2.4 trillion increase of the federal borrowing limit without preconditional spending cuts, House Republicans are visiting the White House on Wednesday to negotiate directly with President Obama on the deficit reduction measures that will likely accompany the next debt ceiling vote. The top leaders of both parties, including the President, have been largely absent from the deficit talks currently being conducted by Vice President Joe Biden, but as the August deadline draws closer, their direct input may be the only thing that can advance negotiations. On Thursday, May 19, Senate Minority Leader Mitch McConnell sat down with TIME to discuss a wide variety of subjects. Below are lightly edited excerpts of his remarks on the debt ceiling and deficit reduction negotiations…. – Time, 6-1-11

Budget Showdown 2011: Obama, Boehner and Reid Strike Last Minute Budget Deal — Averting Government Shutdown with 38 Billion in Cuts

POLITICAL HIGHLIGHTS

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

OBAMA PRESIDENCY & THE 112TH CONGRESS:

White House Photo, Pete Souza, 4/8/11

IN FOCUS

• Federal Budget (2011) — Government Shutdown Averted – NYT
• Details of the Bipartisan Budget Deal: Last night, President Obama announced that the federal government will remain open for business because Americans from different beliefs came together, put politics aside, and met the expectations of the American people. Today, small businesses will no longer worry or have to wait on a loan to open or expand their business, families will receive the mortgages they applied for, and hundreds of thousands of government workers, including our brave men and women in uniform, will continue to receive paychecks on time.
  This deal cuts spending by $78.5 billion from the President’s FY 2011 Budget request — the largest annual spending cut in our history. These are real cuts that will save taxpayers money and have a real impact. Many will be painful, and are to programs that we support, but the fiscal situation is such that we have to act…. – WH, 4-9-11
• Congress reaches an 11th-hour budget deal, still must vote to avoid shutdown: Republicans and Democrats on Capitol Hill have reached an agreement to fund the federal government for the next five months, Senate Majority Leader Harry Reid’s office announced Friday night. The deal will include $39 billion in spending cuts and will drop language related to Planned Parenthood. Lawmakers were still working to approve a short-term stopgap funding bill before midnight to give them time to craft the longer-term legislation.
• Boehner Says Budget Deal Said to Be Reached to Avoid Government Shutdown: Lawmakers reached a deal just minutes before a deadline that would have shuttered federal facilities and furloughed thousands of workers, House Speaker John A. Boehner said.
  Hours from a government shutdown, leaders of the House and Senate offered dramatically different reasons for a budget stalemate and expressed little hope that the two sides would reach an agreement by midnight…. – NYT, 4-8-11

STATS & POLLS

• Budget fight shows Washington still broken: As the midnight Friday deadline loomed for a possible government shutdown, and politicians continued their rhetorical war of words, a larger message went out to the rest of the country: Washington is still broken. The deal announced less than 90 minutes before the deadline may produce a sense of relief that the government will remain open. But given the tortured negotiations and the claims and counterclaims that were traded all day, the public is likely to find fault with both political parties.
  Public sentiment has been clear for weeks. Overall, the country prefers compromise to confrontation, stalemate and shutdown, according to the polls… – WaPo, 4-8-11

THE HEADLINES….

Philip Scott Andrews/The New York Times

The House speaker, John A. Boehner, announced the federal budget agreement reached Friday night by Congressional leaders.

 

• Federal shutdown avoided, 2012 budget fight looms: A last-minute budget deal forged amid bluster and tough bargaining averted an embarrassing federal shutdown, cut billions in spending and provided the first major test of the divided government that voters ushered in five months ago.
  Working late into Friday night, congressional and White House negotiators finally agreed on a plan to pay for government operations through the end of September while trimming $38.5 billion in spending. Lawmakers then approved a measure to keep the government running through next Friday while the details of the new spending plan are written into legislation.
  Obama signed the short-term measure without fanfare Saturday. Congressional approval of the actual deal is expected in the middle of next week. “Americans of different beliefs came together again,” President Barack Obama said from the White House Blue Room, a setting chosen to offer a clear view of the Washington Monument over his right shoulder.
  The agreement was negotiated by Obama, House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev. The administration was poised to shutter federal services, from national parks to tax-season help centers, and to send furlough notices to hundreds of thousands of federal workers… – AP, 4-9-11
• Long meetings, dashed hopes _ but finally a deal: There was barely an hour left before the midnight padlocking of government doors. In a Capitol basement meeting room, House Speaker John Boehner was telling exhausted fellow Republicans that a deal to avert a shutdown was nearly finished when an aide alerted him that staff had completed the final details and the agreement was complete.
  “He said we don’t have the Senate and we don’t have the White House, and it’s a good day’s work,” said Rep. Jack Kingston, R-Ga., who was in the closed-door session and later described the scene. And with that, Republicans clapped: “Not euphoria,” Kingston said, reflecting fatigue and the realization of a long year of intense budget battling lay ahead. But for now, a week of top-level White House meetings, round-the-clock bargaining by staff and lots of emotional hills and valleys had produced a bipartisan accord to trim $38.5 billion in spending over this fiscal year’s remaining six months and head off a federal shutdown that both parties feared could hurt their standing with voters…. – AP, 4-9-11
• Analysis: GOP won first round of budget battle: Republican conservatives were the chief winners in the budget deal that forced Democrats to accept historic spending cuts they strongly opposed. Emboldened by last fall’s election victories, fiscal conservatives have changed the debate in Washington. The question no longer is whether to cut spending, but how deeply. Rarely mentioned is the idea of higher taxes to lower the deficit. Their success is all the more notable because Democrats control the Senate and White House…. – AP, 4-9-11
• Budget deal avoids shutdown, fight ahead: President Barack Obama signed a short-term spending bill on Saturday that averted a government shutdown, formalizing a compromise deal with Republicans that paves the way for more — and bigger — deficit-reduction fights to come. With just over an hour to spare before a midnight deadline, Obama’s Democrats and opposition Republicans agreed on Friday to a budget compromise that will cut about $38 billion in spending for the last six months of this fiscal year.
  After signing the stopgap spending bill to keep the federal government running until the deal can be formally approved in the coming days, Obama underscored the fact that Washington was open with a surprise visit to the Lincoln Memorial. “I just wanted to say … that because Congress was able to settle its difference, that’s why this place is open today and everybody’s able to enjoy their visit,” he told cheering tourists from the monument steps…. – Reuters, 4-9-11
• Obama signs bill averting government shutdown: The short-term spending bill was passed overnight by both houses of Congress and keeps the government operating until Friday. Its signing was announced in a news release, in contrast to the dramatics earlier this week…. – LAT, 4-9-11
• Obama at Lincoln Memorial, open after budget deal: President Barack Obama made the short trip from the White House to the Lincoln Memorial on Saturday to make clear that the country’s national parks and monuments are open for business. A deal Friday night between the White House and congressional leaders avoided a government shutdown that would have closed popular tourist sites across the country.
  The president greeted surprised tourists and told them, “Because Congress was able to settle its differences, that’s why this place is open today and everybody’s able to enjoy their visit.” “That’s the kind of future cooperation I hope we have going forward,” the president said…. – AP, 4-9-11
• Next on the Agenda for Washington: Fight Over Debt: The down-to-the-wire partisan struggle over cuts to this year’s federal budget has intensified concern in Washington, on Wall Street and among economists about the more consequential clash coming over increasing the government’s borrowing limit. Congressional Republicans are vowing that before they will agree to raise the current $14.25 trillion federal debt ceiling — a step that will become necessary in as little as five weeks — President Obama and Senate Democrats will have to agree to far deeper spending cuts for next year and beyond than those contained in the six-month budget deal agreed to late Friday night that cut $38 billion and averted a government shutdown. Republicans have also signaled that they will again demand fundamental changes in policy on health care, the environment, abortion rights and more, as the price of their support for raising the debt ceiling. In a letter last week, Treasury Secretary Timothy F. Geithner told Congressional leaders the government would hit the limit no later than May 16. He outlined “extraordinary measures” — essentially moving money among federal accounts — that could buy time until July 8…. – NYT, 4-9-11
• Tea Party revels in newfound clout: ‘When we;re cutting, we’re winning’: Americans learned yesterday the full power of the Tea Party, with newly elected conservatives calling the shots in the House rather than railing against government from the sidelines. For many in the movement, pushing the government to the brink of closure was a crowning achievement, an emphatic statement that spending must be reined in — and now. “When we’re cutting,” said Representative Nan Hayworth, a New York Republican, “we’re winning.” “It’s a victory for the American people,” declared Representative Allen West, Republican of Florida. “When you look at what has happened over the past few years — where we’ve had these astronomical debt and deficits — it’s amazing how we’re actually having a conversation in Washington, D.C., about spending cuts.”
  But for those outside the movement, it put on full display the uncompromising principles of the far right, showing that Tea Party-aligned lawmakers are so ideologically rigid they will throw sand into the gears of government to prove their point. Democrats questioned why conservatives who campaigned on creating jobs were so eager to furlough 800,000 government employees and freeze their paychecks. “The Tea Party is trying to sneak through its extreme social agenda,” Harry Reid, the Senate majority leader, said yesterday…. – Boston Globe, 4-9-11
• Budget Deal to Cut $38 Billion Averts Shutdown: Congressional leaders and President Obama headed off a shutdown of the government with less than two hours to spare Friday night under a tentative budget deal that would cut $38 billion from federal spending this year. President Obama praised the budget deal in short remarks from the Blue Room in the White House just after 11 p.m.
  Speaker John A. Boehner, who had pressed Democrats for cuts sought by members of the conservative new House majority, presented the package of widespread spending reductions and policy provisions and won a positive response from his rank and file shortly before 11 p.m. Both Democrats and Republicans proclaimed they had reached a deal and would begin the necessary steps to pass the bill and send it to Mr. Obama next week…. – NYT, 4-9-11
• Historic’ deal to avoid government shutdown: Perilously close to a government shutdown, President Barack Obama and congressional leaders reached a historic agreement late Friday night to cut about $38 billion in spending and avert the first federal closure in 15 years. Obama hailed the deal as “the biggest annual spending cut in history.” House Speaker John Boehner said that over the next decade it would cut government spending by $500 billion — and won an ovation from his rank and file, tea party adherents among them. “This is historic, what we’ve done,” agreed Senate Majority Leader Harry Reid, D-Nev., the third man involved in negotiations that ratified a new era of divided government…. – AP, 4-8-11
• US House Republicans told of $39 bln spending plan: U.S. House of Representatives Republican leaders on Friday presented to their membership a $39 billion spending cut plan aimed at averting a government shutdown, according to Republican lawmakers. The House is also planning to vote later tonight on a stopgap funding bill to keep the government running until the longer budget plan can be enacted into law sometime next week, the lawmakers said…. – Reuters, 4-8-11

QUOTES

White House Photo, Pete Souza, 4/8/11

• Barack Obama: Last night, leaders of both parties came together to avert a government shutdown, cut spending, and invest in our future. This is good news for the American people. It means that small businesses can get the loans they need, and hundreds of thousands of Americans will get their paychecks on time—including our brave men and women in uniform… -
• Weekly Address: President Obama on the Budget Compromise to Avoid a Government Shutdown: Last night, after weeks of long and difficult negotiations over our national budget, leaders of both parties came together to avert a government shutdown, cut spending, and invest in our future.
  This is good news for the American people. It means that small businesses can get the loans they need, our families can get the mortgages they applied for, folks can visit our national parks and museums, and hundreds of thousands of Americans will get their paychecks on time – including our brave men and women in uniform.
  This is an agreement to invest in our country’s future while making the largest annual spending cut in our history. Like any compromise, this required everyone to give ground on issues that were important to them. I certainly did. Some of the cuts we agreed to will be painful – programs people rely on will be cut back; needed infrastructure projects will be delayed. And I would not have made these cuts in better circumstances. But we also prevented this important debate from being overtaken by politics and unrelated disagreements on social issues. And beginning to live within our means is the only way to protect the investments that will help America compete for new jobs – investments in our kids’ education and student loans; in clean energy and life-saving medical research.
  Reducing spending while still investing in the future is just common sense. That’s what families do in tough times. They sacrifice where they can, even if it’s hard, to afford what’s really important.
  A few months ago, I was able to sign a tax cut for American families because both parties worked through their differences and found common ground. Now, the same cooperation has made it possible for us to move forward with the biggest annual spending cut in history. And it’s my sincere hope that we can continue to come together as we face the many difficult challenges that lie ahead – from creating jobs and growing our economy to educating our children and reducing our long-term deficits.
  That’s our responsibility. That’s what the American people expect us to do. And it’s what the American people deserve. – WH, 4-9-11 –
• President Obama’s Statement on the Bipartisan Agreement on the Budget: REMARKS BY THE PRESIDENT ON THE BUDGET 11:04 P.M. EDT: THE PRESIDENT: Good evening. Behind me, through the window, you can see the Washington Monument, visited each year by hundreds of thousands from around the world. The people who travel here come to learn about our history and to be inspired by the example of our democracy — a place where citizens of different backgrounds and beliefs can still come together as one nation.
  Tomorrow, I’m pleased to announce that the Washington Monument, as well as the entire federal government, will be open for business. And that’s because today Americans of different beliefs came together again.
  In the final hours before our government would have been forced to shut down, leaders in both parties reached an agreement that will allow our small businesses to get the loans they need, our families to get the mortgages they applied for, and hundreds of thousands of Americans to show up at work and take home their paychecks on time, including our brave men and women in uniform.
  This agreement between Democrats and Republicans, on behalf of all Americans, is on a budget that invests in our future while making the largest annual spending cut in our history. Like any worthwhile compromise, both sides had to make tough decisions and give ground on issues that were important to them. And I certainly did that.
  Some of the cuts we agreed to will be painful. Programs people rely on will be cut back. Needed infrastructure projects will be delayed. And I would not have made these cuts in better circumstances.
  But beginning to live within our means is the only way to protect those investments that will help America compete for new jobs — investments in our kids’ education and student loans; in clean energy and life-saving medical research. We protected the investments we need to win the future.
  At the same time, we also made sure that at the end of the day, this was a debate about spending cuts, not social issues like women’s health and the protection of our air and water. These are important issues that deserve discussion, just not during a debate about our budget.
  I want to think Speaker Boehner and Senator Reid for their leadership and their dedication during this process. A few months ago, I was able to sign a tax cut for American families because both parties worked through their differences and found common ground. Now the same cooperation will make possible the biggest annual spending cut in history, and it’s my sincere hope that we can continue to come together as we face the many difficult challenges that lie ahead, from creating jobs and growing our economy to educating our children and reducing our deficit. That’s what the American people expect us to do. That’s why they sent us here…. – WH, 4-8-11 — Transcript — Mp4 — Mp3
• Democrats, Republicans agree on a budget deal: “We have agreed to an historic amount of cuts for the remainder of this fiscal year, as well as a short-term bridge that will give us time to avoid a shutdown while we get that agreement through both houses and to the President. We will cut $78.5 billion below the President’s 2011 budget proposal, and we have reached an agreement on the policy riders. In the meantime, we will pass a short-term resolution to keep the government running through Thursday. That short-term bridge will cut the first $2 billion of the total savings,” Senate Majority Leader Harry Reid and House Speaker John Boehner said in a joint statement issued after the agreement. – CNN, 4-8-11
• Speaker of the House of Representatives John A. Boehner: This has been a lot of discussion and a long fight. But we fought to keep government spending down because it really will in fact help create a better environment for job creators in our country.
• U.S. Senate Republican Leader Mitch McConnell Welcomes Historic Spending Reductions: Let me thank my friend the Majority Leader and Speaker Boehner for their outstanding work during this difficult negotiation. You know, Mr. President, we had an opportunity tonight to decide whether we wanted to repeat history, or make history. Had we chosen to repeat history, we would have allowed a government shutdown. Instead we decided to make history by implementing in the middle of this fiscal year as the Majority Leader has indicated substantial reductions in spending.
  Now, these reductions, Mr. President, are in the billions. Once we get through this process by the end of next week, we will move on to a much larger discussion about how we save trillions, by enacting hopefully on a bipartisan basis a budget that genuinely begins to get on top of this problem. And the problem as we all know is $14 trillion in debt, and over $53 trillion in unfunded liabilities. The President has asked us to raise the debt ceiling. And Senate Republicans and House Republicans and I hope many Democrats as well are going to say, Mr. President, in order to raise the debt ceiling, we need to do something significant about the debt. My definition of significant is that the markets view it as significant, the American people view it as significant and foreign countries view it as significant.
  So for tonight, again, I congratulate the Majority Leader and the Speaker. This is an important first step, but just the beginning of what we need to do to get our house, our fiscal house, in order. -

HISTORIANS & ANALYSTS’ COMMENTS

Gallery: Government shutdown 2011: Congressional leaders agreed late Friday to a compromise that will keep the federal government funded for the remainder of the fiscal year.

• Gary Jacobson, Julian Zelizer: Obama Calls Budget Deal a ‘Worthwhile Compromise’: “The size of the cuts is a bit more than Democrats would like, but on the other hand, the riders are generally gone,” said Gary Jacobson, a political science professor at the University of California at San Diego. “So it’s something that might be generally popular and help both sides. Most Americans wanted some sort of compromise.”
  Julian Zelizer, a professor of history and public affairs at Princeton University in New Jersey, said Obama may face questions about whether he engaged in the negotiations soon enough. “All and all, this is something he survives rather than a negotiation that remakes how the electorate thinks about him,” Zelizer said. Bloomberg, 4-9-11
• JEFF ZELENY: In Budget Deal, Signs of Obama’s Path to the Middle: President Obama opened the week by calling on Democrats to embrace his re-election campaign. He closed it by praising Republicans for forging a compromise to cut spending this year and avert a government shutdown. The juxtaposition made clearer than ever the more centrist governing style Mr. Obama has adopted since his party’s big losses in November and his recapture-the-middle strategy for winning a second term.
  But in agreeing Friday night to what he called the largest annual spending cut in the nation’s history, the president further decoupled himself from his party in Congress, exacerbating concerns among some Democrats about whether he is really one of them and is willing to spend political capital to defend their principles on bigger battles ahead…. – NYT, 4-9-11
• 2011 is not 1995: The substance of this deal is bad. But the way Democrats are selling it makes it much, much worse. The final compromise was $38.5 billion below 2010’s funding levels. That’s $78.5 billion below President Obama’s original budget proposal, which would’ve added $40 billion to 2010’s funding levels, and $6.5 billion below John Boehner’s original counteroffer, which would’ve subtracted $32 billion from 2010’s budget totals. In the end, the real negotiation was not between the Republicans and the Democrats, or even the Republicans and the White House. It was between John Boehner and the conservative wing of his party. And once that became clear, it turned out that Boehner’s original offer wasn’t even in the middle. It was slightly center-left…. – WaPo, 4-9-11
• The Shutdown That Wasn’t: Given the widespread consensus that the political consequences of a shutdown would be much worse for the Republicans than for the Democrats, there’s a case to be made that Reid and Obama would have been better off taking a much harder line, and then just sitting back and chuckling as the Tea Party caucus pushed an unwilling Boehner off the plank.
  So why didn’t they? Well, maybe they put country before party, and calculated that shutting down the government over what amounts to a fraction of a fraction of a vast federal budget would be horribly irresponsible, even if it made liberals happy and redounded to the Democratic Party’s short-term benefit. If so, good for them. – NYT, 4-9-11

Budget Showdown 2011: Obama, Republicans and Democrats Concerned with Ideological Stances or National Interests?

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

President Obama delivers a statement on the ongoing budget talks., White House Photo, Pete Souza, 4/7/11

Why is President Obama playing hardball, taking a gamble where there will be losses all around, if when the clock strikes midnight today and no budget or extension deal are in place to keep the government operating?

A government shutdown should be averted at all reasonable costs. If a final budget cannot be decided today, the Senate needs to pass the emergency week extension, and the insurance that the military will be paid even if a shutdown will happen. So much progress has been made this week in nearing to a deal for the budget for rest of the fiscal year; the extra week could make all the difference.

President Obama should not be stiff and insist on a veto, or refuse the spending cuts that are sticklers and preventing a budget agreement. Vetoing any measure that would keep the government open will in the long run look bad for the Democrats and President Obama. The side that did the most to prevent the shutdown will be the side that public will look most favorably at come election time.

Besides political capital, it is not a time for the government to be shut down, with the revolutions, turmoil and unrest in the Mideast, the continuing tragedy in Japan and with the Canadian government non-confidence vote, campaign and election, the United States needs to be the stable world presence, a government shutdown diverts from this.

Additionally the economy and country does not need to go through any more turmoil and expenses that might upset the delicate economic recovery. Only last week official numbers were released indicating a decrease in unemployment. With a shutdown the estimated numbers now indicate that 800,000 of 2 million civil servants will be placed on furlough. In a short period the monetary costs of a shutdown will pile up and be evident, with Washington, DC being the hardest hit.

The issue at this very moment preventing an eleventh hour budget agreement is 300 million in funding to Planned Parenthood; of all allocations, there should be a compromise concerning this spending issue. However, the divisions are strictly ideological. Republicans consciously do not see Planned Parenthood as an essential government spending. While Democrats and the President refuse to compromise either on the issue, with President Obama explicitly refusing any cuts to their funding.

Both sides see it as more important than keeping the government open, more essential than the harm to the economy caused by shutdown, the civil servant workers and military troops that will not be paid, the millions of dollars that will be lost, and the devastating economic affect should there be a protracted shutdown.

If the Democrats are insisting that the Republicans are being petty on the spending issues they are concerned about, then maybe they should heed their own advice, and agree on the cuts for the country’s greater good. Either way both parties in Congress and President Obama should consider what is best for the majority of American citizens and the country as a whole above any ideological stands and symbols.

Budget Showdown 2011: Tick, Tock — Time Running Out Before Government Shutdown — Reid, Boehner Still Hagling

POLITICAL HIGHLIGHTS

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

OBAMA PRESIDENCY & THE 112TH CONGRESS:

John Boehner (left) and Harry Reid speak to reporters outside the White House. | AP Photo | AP Photo

IN FOCUS

• Republican Fiscal Year 2012 Budget
• From Reagan to Obama 30 years of spending priorities – WaPo
• Government shutdown 101: What does it mean for the military?: The Pentagon will continue military operations in Afghanistan and Iraq, but US troops will work without pay, according to guidance issued late Thursday by the Defense Department…. – CS Monitor, 4-8-11
• The Federal Employee’s Guide to a Shutdown: The Office of Personnel Management (OPM), the official White House agency in charge of federal-workforce policies, issued this brief FAQ Thursday night about what people can expect in the event of a federal-government shutdown, which appears likelier by the minute…. – The Atlantic, 4-8-11
• Lawsuit says feds can’t force work during shutdown: The nation’s largest federal employee union says forcing some federal employees to work without pay during a government shutdown violates the U.S. Constitution. The American Federation of Government Employees has filed a lawsuit seeking an injunction to prevent the Obama administration from requiring essential employees to keep working if a shutdown occurs… – AP, 4-8-11

THE HEADLINES….

Doug Mills/The New York Times

• With no budget deal, government shutdown looms: With a midnight deadline looming, the White House and Congress struggled on Friday to break a budget impasse that threatens to shut down the U.S. government and idle hundreds of thousands of federal workers. Democratic and Republican congressional leaders blamed each other for the stalemate over government funding for the rest of the fiscal year, which ends September 30, and could not even agree on what issues were the final stumbling blocks to a deal.
  Democrats said the two sides were at odds over federal funding for birth control. Republicans said spending cuts were the issue. Without an agreement, money to operate the federal government for the next six months would run out at midnight on Friday (0400 GMT on Saturday) and agencies such as the Internal Revenue Service would begin a partial shutdown…. – Reuters, 4-8-11
• Shutdown nears as Americans watch and politicians bicker: Everyday American families — people who depend on federal government paychecks and those who make use of federal services that would be shuttered — fretted over how a shutdown would affect their lives if politicians don’t come up with an agreement by midnight Friday.
  Without the agreement, the government’s massive gears will begin grinding to a halt, idling hundreds of thousands of people.
  Operations from national parks to the White House visitor center would close. Even some government websites would blink out, replaced by virtual closed signs. Americans seeking new passports would have to wait. And the military would not be able to pay death gratuities to the families of those who die on active duty, although they would eventually receive them, a senior defense official said. But not everything would close shop…. – CNN, 4-8-11
• On shutdown, White House frustration with John Boehner grows: President Barack Obama has told Speaker John Boehner he won’t accept cuts to Planned Parenthood and can’t make any new concessions to avert a government shutdown without movement from the GOP, sources close to the process tell POLITICO.
  Frustration is building in the White House over the high-wire budget negotiations with Republicans. The sense in the West Wing is that Boehner and his aide-de-camp Barry Jackson have repeatedly offered to set aside the Planned Parenthood issue in exchange for greater spending cuts from Obama, only to later say that the Planned Parenthood cuts are still on the table. Boehner was vague when asked if Title X funding, some of which goes to Planned Parenthood, was still a sticking point.
  “Almost all of the policy issues have been dealt with,” he told reporters at the Capitol on Friday. “The big issue is over the spending… We’re not going to roll over and sell out the American people like has been done time and time again in Washington… We’re damn serious.”
• Planned Parenthood at Center of Budget Shutdown Threat Rep. Milkulski: ‘Not Throwing Women and Children Under the Bus’: The elimination of more than $300 million in federal funding for women’s health care centers, including Planned Parenthood, may well force a government shutdown at midnight tonight. Republicans want to zero out Title X, a program implemented under Republican President Richard Nixon in 1970 to provide contraceptives, cancer screenings, and pregnancy and sexually transmitted disease testing at community health centers across the country. Conservative lawmakers say the money indirectly subsidizes abortions, despite the fact that the federal Hyde Amendment expressly prohibits such use of taxpayer funds…. – ABC News, 4-8-11
• GOP, Dem huddles fail to yield progress on budget deal: After both sides huddled behind closed doors Friday afternoon, the message from both Senate Democrats and House Republicans remained clear… They’re still stuck… – MSNBC, 4-8-11
• Shutdown Near, No Sign of Compromise: Hours from a government shutdown, leaders of the House and Senate offered dramatically different reasons for a budget stalemate and expressed little hope that the two sides would reach an agreement by midnight. In a terse statement to reporters, the speaker of the House, John A. Boehner, Republican of Ohio, said there was “only one reason we do not have an agreement yet, and that is spending,” and asked, “When will the White House and when will Senate Democrats get serious about cutting spending?”… – NYT, 4-8-11
• On Budget Dispute, Obama Casts Himself as Mediator in Chief: President Obama has now assumed the role of mediator in chief in the efforts to avoid a government shutdown. Over the course of 24 hours and three separate meetings, Mr. Obama has cast himself as the sober one in the room, prodding the two sides to get past their dispute — even though he is a key player on one of them.
  “What I’ve said to the speaker and what I’ve said to Harry Reid is, because the machinery of the shutdown is necessarily starting to move, I expect an answer in the morning,” Mr. Obama told reporters moments after the third negotiation session broke up Thursday night…. – NYT, 4-8-11
• Blame game intense as government shutdown looms: House Speaker John Boehner and the GOP leadership team just emerged from a meeting with their Republican members. Boehner insists the fight is about spending cuts, not policy issues such as funding for women’s health clinics.
  “The big fight is over spending. … We’re not going to roll over and sell out the American people,” Boehner said. “We say we’re serious about cutting spending. We’re damn serious.” “Almost all of the policy issues have been dealt with. We’re working on the spending,” he said…. – USA Today, 4-8-11
• Shutdown could mean trash dumped at Boehner’s house: A Facebook page has been launched aimed at getting people to dump their garbage at the Ohio Republican’s pad in Washington, D.C. Trash pickup is among the services that would be halted in the District of Columbia, whose funding is tied to congressional approval.
  “If he won’t allow us to use OUR TAX DOLLARS to pick it up, maybe we should just BRING IT TO HIM,” the page says. More than 5,000 people have checked out the Facebook page and 546 people — presumably those who live in the District of Columbia or nearby — are listed as a “maybe” to actually “attend” the dumping of trash…. – USA Today, 4-8-11
• Government shutdown nears: Federal workers nervously eyed the clock and an American public sharply divided along partisan lines watched from the sidelines Friday as Democrats and Republicans sniped at one another in a budget battle that could shut down the government and idle more than 800,000 people. Negotiators have until midnight Friday to reach an agreement, or the government’s massive gears will begin grinding to a halt.
  Should the government shut down, operations from national parks to veterans’ clinics would close. The White House visitor center would go dark. Even some government websites would blink out, replaced by virtual closed signs. But not everything would close… – CNN, 4-8-11
• Government Shutdown Inevitable: Blame Game Increases as Clock Ticks Democrats, Republicans Met Thursday Night into Friday Morning But Couldn’t Reach Deal: House Speaker John Boehner said today he will return his pay during the days the government is shut down. He made the promise as it became clear that Republicans and Democrats — bitterly divided over women’s health funding programs — will be hard pressed to reach a deal hours before the budget deadline expires. In the case of a government shutdown, essential personnel who are kept on duty — including troops in the field — do not receive paychecks, but members of Congress do.
  “In the event of a lapse in appropriations for fiscal year 2011 causing a government shutdown, I will return any and all compensation that I would otherwise be entitled during such a lapse in appropriations,” Boehner said in a letter to fellow House members.
  Sixty senators have signed on to a bill that would ensure troops are paid through a shutdown, but time is quickly running out…. – ABC News, 4-8-11
• Congress doesn’t shut down during a shutdown: Senators would have to push their own elevator buttons. House members would go without their free gym. Food on Capitol Hill would be sparse. And the lawmakers’ restrooms? Perhaps not as fresh.
  Congress would feel the pinch of a government shutdown, but nowhere near the pain that would be inflicted on the massive federal work force it is supposed to govern.
  Unlike the roughly 800,000 federal workers who would be affected, lawmakers get wide latitude deciding who is essential and who’s not in the fiefdoms of their own offices and committees. They also get to choose whether to give up their own pay during a shutdown — an option not afforded the furloughed…. – AP, 4-8-11
• Boehner, Reid to skip pay in government shutdown: Add House Speaker John Boehner to the growing list of members of Congress who say they’ll skip their paycheck if the federal government shuts down tonight. By law, members of Congress and the president would continue to receive their pay in the event of a government shutdown.
  Boehner is sending a letter to House lawmakers explaining how the House Administration can help them return their pay to the U.S. Treasury, which he plans to do…. – USA Today, 4-8-11
• Gates, in Iraq, Talks of Effects of Budget Fight: On what he described as probably his final visit to Iraq, Defense Secretary Robert M. Gates on Thursday turned from eight years of war here to the fight raging at home. If the United States government shuts down this weekend and into next week, he told American troops, there would be a delay in their pay.
  Mr. Gates, responding to a question from a soldier here about whether he would be paid for his service in Iraq, said he would be, he just was not sure when. Mr. Gates then presented this sequence of events of what could happen to American forces in Iraq, Afghanistan and other parts of the world as a result of the budget showdown. NYt, 4-8-11
• Planned Parenthood funding only issue holding up budget deal, says Harry Reid: Senate Majority Leader Harry Reid said on the Senate floor Friday morning that the only issue holding up a budget deal to avert a government shutdown is funding for Planned Parenthood and other organizations that provide women’s health services… – CBS News, 4-8-11
• As Shutdown Deadline Nears, Lawmakers ‘Can’t Agree What They Disagree On’: For the third time in three days, President Obama met with congressional leaders but failed to reach a budget agreement to avoid a government shutdown. Jim Lehrer talks to The Wall Street Journal’s Naftali Bendavid and Washington Post’s Ed O’Keefe about continuing budget brinksmanship that has Democrats and Republicans worried…. – PBS Newshour, 4-7-11
• Time’s up: Obama and GOP scramble to halt shutdown: Uncomfortably close to a deadline, President Barack Obama and top congressional leaders have only hours to avert a Friday midnight government shutdown that all sides say would inconvenience millions of people and damage a still fragile economy. Obama said he still hoped to announce an agreement on Friday but did not have “wild optimism.”
  In revealing nothing about what still divides them, Obama and the lawmakers, House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev., all said another late night of talks in the Oval Office had narrowed their differences over cutting federal spending and other matters.
  But Obama said ominously that the machinery of a shutdown was already in motion. “I expect an answer in the morning,” Obama told reporters Thursday evening as representatives from the White House and Capitol Hill plunged ahead with negotiations into the night…. – AP, 4-8-11
• With shutdown looming, riders threaten deal: The government will shut down today, unless Republicans do what their base loathes, but Washington knows is necessary: compromise with Democrats and President Barack Obama. That’s what it comes down to Friday, as the current stopgap funding measure expires and funding for the federal government runs dry, placing the immediate employment of 800,000 workers in jeopardy, and both political parties at huge risk a year and a half before a presidential election.
  Obama, who made a late public entry into the fight, said he expects “an answer in the morning” from Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.) as to whether Congress can agree on how many tens of billions of dollars should be cut from federal ledgers from now until the end of September.
  Money isn’t the only sticking point. Just as it was for Democrats when as they worked to pass a health care law, abortion is once again a major issue. Republicans insist on cutting off funds for Planned Parenthood, turning the battle to fund the government into part of the overarching culture war on Capitol Hill. Republicans say bringing Planned Parenthood into the fray is a spending issue, as they told voters they’d concentrate on jobs and the economy, not cultural issues… – Politico, 4-8-11
• Reid: impasse based on funding for Planned Parenthood; Boehner denies it: House Speaker John A. Boehner (Ohio), the lead Republican in the budget impasse that has transfixed Washington and brought the nation to the brink of a government shutdown, immediately disputed Reid’s account.
  The Democrat, speaking at the Capitol, said that he and President Obama had agreed to accept $38 billion in budget cuts — $5 billion more than was on the table last week. But, Reid said, Boehner would not budge from a demand that the budget strip federal funding from the group Planned Parenthood. Negotiations continued at the staff level until 3 a.m., to no avail. “We agreed on a number last night. They can spin this any way they want,” Reid said. “The number’s done.”… – WaPo, 4-7-11
• Budget deal remains out of reach after overnight talks: The first federal government shutdown in 15 years is hours away after parties in the budget negotiations appear to have lost ground in talks that lasted into Friday morning…. – LAT, 4-8-11
• Latest White House huddle fails to yield budget deal; shutdown nears: A fourth White House meeting in 48 hours between President Barack Obama and congressional leaders failed to reach agreement Thursday night on a spending plan for the rest of the current fiscal year, increasing chances for a partial government shutdown to begin just over 24 hours later.
  The talks involving Obama, House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nevada, as well as Vice President Joe Biden, ended less than an hour after starting.
  “We made some progress today,” Obama told reporters in brief remarks, saying differences had been narrowed and staff members would work through the night to try to reach agreement on the few remaining “difficult issues.” He provided no details…. – CNN, 4-7-11
• House votes to fund Pentagon, prevent shutdown: The GOP-controlled House has passed legislation seeking to keep the government open for another week while funding the Pentagon through September. But Senate Democrats oppose it, and President Barack Obama has promised a veto should the bill reach him. Obama called the measure a distraction from ongoing negotiations on a full-year spending bill…. – AP, 4-8-11
• Obama, Congress stare at shutdown deadline: Once again, White House and congressional aides worked through the night on a new budget deal — and they still couldn’t nail one down. The difference is that today is deadline day.
  The federal government will run out of money at midnight and shut down many operations unless President Obama, Speaker of the House John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nevada, can strike some kind of deal in the hours ahead.
  But while aides argue about budget numbers, Reid and other Democrats said this morning that the biggest obstacle to a deal is a Republican insistence that Planned Parenthood be de-funded because of abortion services. Boehner and the Republicans said the problem is that Democrats won’t agree to big enough budget cuts. “While nothing will be decided until everything is decided, the largest issue is still spending cuts,” said Boehner spokesman Michael Steel…. – USA Today, 4-8-11
• $5 billion separates parties in elusive 2011 budget deal: Republicans and Democrats on Capitol Hill say they are about $5 billion apart in their haggling to reach a deal to fund the federal government for the rest of the year. That amounts to one-half of 1 percent of the trillion dollars in spending Congress doles out each year. Five one-thousandths.
  Yet weeks of negotiations have not led them to an agreement. A flurry of activity Thursday, including two Oval Office sit-downs with President Obama, did not close the gap, or even cool the rhetoric. Each side continued to accuse the other of playing politics, and of trying to force a government impasse.
  The only question on the minds of everyone in the capital — will a shutdown happen? — is now being asked with increasing urgency. If the two sides cannot come to terms by midnight , Washington will effectively run out of money and the government will close.
  “What I’ve said to the speaker and what I’ve said to Harry Reid is because the machinery of the shutdown is necessarily starting to move, I expect an answer in the morning,” Obama said just before 10 p.m. Thursday, concluding his fourth meeting with congressional leaders in three days… – WaPo, 4-8-11
• Congress pushes for final budget deal: With time running out, an ideological fight in the Congress over abortion and environmental issues threatened on Thursday to derail an agreement to avert a government shutdown.
  The mood swung between optimism and pessimism as Democratic and Republican leaders held a whirlwind series of private meetings and public news conferences through the day to plead their case for a budget deal that would keep the government operating beyond midnight on Friday.
  “I’m not very optimistic,” Senate Majority Leader Harry Reid, a Democrat, told reporters before the evening meeting, blaming the impasse on a Republican push for policy provisions that would block public funding of birth control and stymie environmental protection efforts.
  “I did express to the president my disappointment that he suggested he would veto that,” Boehner told reporters after the afternoon White House meeting. “We can get to an agreement, but we are not there yet.”… – Reuters, 4-7-11
• GOP seeks 1-week extension as gov’t shutdown looms: Short of a deal, congressional leaders bargained and squabbled by turns Thursday on legislation to cut spending and prevent a partial government shutdown that loomed for Friday at midnight. After all-night talks among aides, President Barack Obama summoned Speaker John Boehner, R-Ohio and Senate Majority Leader Harry Reid, D-Nev. to the White House meeting for the second time in a little over 12 hours.
  Before departing the Capitol, Boehner urged the House to pass legislation to cut $12 billion, fund the Pentagon through the end of the year and keep the government running for a week. “There is absolutely no policy reason for the Senate to not follow the House in taking these responsible steps to support our troops and to keep our government open,” he said.
  Reid said otherwise, although he, too, made it clear he wants to avoid a shutdown that the White House says would crease problems for combat troops overseas and delay IRS refunds for taxpayers at home. “The issue is ideology, not numbers,” he said, criticizing Republican proposals to limit the authority of the Environmental Protection Agency and a prohibition of the use of federal or local funds to pay for most abortions in the District of Columbia. “These matters have no place on a budget bill,” he said…. – Business Week, 4-8-11
• GOP prepares 1-week extension as shutdown looms: Republicans battling with President Barack Obama over budget cuts plan to hold a House vote Thursday on one-week legislation to avoid a government shutdown, despite opposition from the White House and Senate Democrats pressing for a longer-term solution.
  The party leaders debated as the clock ticked toward a midnight Friday deadline. Even a brief shutdown could affect a wide range of Americans, from troops fighting abroad to tourists planning trips to national parks.
  The move by House Speaker John Boehner, R-Ohio, to advance the interim budget measure angered his Democratic negotiating counterparts and came after slower-than-hoped White House talks Wednesday night. The president said Republicans need to display more urgency, while Boehner said honest differences remain…. – AP, 4-7-11
• Obama Meeting Fails to End Stalemate Over Federal Budget: President Obama and Congressional leaders said Wednesday that a late-night White House bargaining session produced no budget breakthrough that would avert a government shutdown this weekend but agreed the two sides had narrowed the issues in efforts to strike a deal.
  Emerging from a 90-minute meeting with Senator Harry Reid, the majority leader, and Speaker John A. Boehner, the president said aides would work through the night and he and Mr. Reid expressed optimism that a compromise could be reached.
  “I remain confident that if we’re serious about getting something done, we should be able to complete a deal and get it passed and avert a shutdown,” Mr. Obama said. NYT, 4-7-11
• Some progress cited in federal budget talks: Republican House Speaker John Boehner won’t acknowledge compromising with Democrats, but he and Senate Democratic leader Harry Reid both cite movement in White House negotiations to avoid a government shutdown…. – LAT, 4-7-11
• Rifts Within Both Parties Test Leaders in Budget Fight: On one level, the budget showdown that continued to play out here on Wednesday is all about the balance of power between the two parties, a question of whether President Obama has regained his footing and can still control the direction of the country or whether Speaker John A. Boehner and the Republicans are now calling the shots.
  But on another, it is a test of each man’s ability to weather challenges inside his own party. The outcome will help determine whether Mr. Boehner is leading his party or following the demands of the Tea Party movement. For Mr. Obama, it is the biggest test yet of whether he can reposition himself as a pragmatic leader who can recapture the political center and keep liberals sufficiently energized to help him win re-election…. – NYT, 4-7-11
• Obama Presses for Budget Issues ‘Narrowed’; Parties Asked to Work Through Night as Shutdown Looms: “What [the talks] did was narrow the issues and clarify the issues that are still outstanding,” Mr. Obama said. He was confident a deal could be reached to fund the government for the rest of the fiscal year, he said, but “it’s going to require a sufficient sense of urgency from all parties involved.”
  Staffers from the White House and the offices of Messrs. Boehner and Reid were set to work through night, and Mr. Obama said he would check in with them Thursday morning—a day and a half before the deadline—and summon the parties back to the White House if necessary.
  “We’re going to keep pounding away at this thing,” Mr. Obama said…. – WSJ, 4-7-11
• President Obama talks with reporters about the 2011 budget negotiations. He said he should not have to be a referee for Congress: Racing a Friday deadline to avert a government shutdown, President Obama met late Wednesday with top congressional negotiators and said afterward that he is “confident” a spending deal can be finalized in time.
  House Speaker John A. Boehner, the top Republican who met with Mr. Obama, said there is still no agreement on an overall dollar amount for spending cuts, or on what legislative add-ons will be included in any final spending deal. But all sides agreed their staffs would continue working after the high-level White House meeting.
  “What they did was narrow the issues and clarify the issues that are still outstanding,” Mr. Obama told reporters afterward. “I remain confident that if we’re serious about getting something done, we should be able to complete a deal and get it passed and avert a shutdown.”…. – Washington Times, 4-7-11
• In Washington, squabbling over who’s an adult: Suddenly everyone in Washington wants to be an adult. President Barack Obama says he wants to have an adult dialogue on the budget. Republican lawmakers contend they’re the ones trying to have a grown-up talk. Both sides are pointing fingers yet both have agreed to repeated delays in completing a budget to keep the government open for the last six months of the fiscal year.
  The bickering might seem, well, childish, but the stakes are high as each side tries to win public opinion and display the leadership qualities to attract voters at the ballot box through 2012 and beyond…. – AP, 4-7-11
• Administration: Shutdown would furlough 800,000 federal workers: Officials began warning Wednesday of significant cutbacks in government services as the threat of a federal government shutdown lurched one day closer to reality.
  Failure to reach a budget deal would mean furloughing about 800,000 federal employees nationwide — many of whom are expected to surrender their Blackberrys, according to senior administration officials familiar with shutdown planning…. – WaPo, 4-6-11
• White House says shutdown will delay pay to troops: The Obama administration warned Wednesday that a federal shutdown would undermine the economic recovery, delay pay to U.S. troops fighting in three wars, slow the processing of tax returns and limit small business loans and government-backed mortgages during peak home buying season.
  The dire message, delivered two days before the federal government’s spending authority expires, appeared aimed at jolting congressional Republicans into a budget compromise. Billions of dollars apart, congressional negotiators were working to strike a deal by Friday to avert a shutdown by setting spending limits through the end of September. The last such shutdown took place 15 years ago and lasted 21 days…. – AP, 4-6-11
• GOP budget seen raising health costs for retirees: Talks appear to be intensifying on Capitol Hill on reaching a deal on long-overdue legislation to finance the government through the end of September — and avoid a government shutdown. Whether a shutdown can be avoided in three days’ time is another matter.
  A White House meeting Tuesday that included President Barack Obama, House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev., failed to produce the hoped-for breakthrough, however, with a stopgap government funding bill set to expire Friday at midnight…. – AP, 4-6-11
• Obama presses Congress to avoid shutdown: Prodded by an insistent President Barack Obama, Congress’ top two lawmakers sought to reinvigorate compromise talks Tuesday aimed at cutting tens of billions in federal spending and averting a partial government shutdown Friday at midnight.
  According to Democrats, House Speaker John Boehner, R-Ohio, suggested at a White House meeting that fellow Republicans might be able to accept a deal with $40 billion in cuts. That’s more than negotiators had been eyeing but less than the House seeks.
  The speaker’s office declined comment, and Boehner issued a statement saying, “We can still avoid a shutdown, but Democrats are going to need to get serious about cutting spending – and soon.”
  For his part, Senate Majority leader Harry Reid sounded an accusatory note. “I hope the Republicans do what the country needs, not what they believe the tea party wants,” he said at the Capitol “I mean, it seems that every step we take, it’s something just to poke us in the eye,” he said…. – AP, 4-5-11
• GOP budget plan would revamp Medicare, Medicaid: House Republicans set up a politically defining clash over the size and priorities of government Tuesday, unveiling a budget plan that calls for both unprecedented spending cuts and a fundamental restructuring of taxpayer-financed health care for the elderly and the poor.
  The plan would slash federal spending by $5 trillion or more over the coming decade. It would leave Social Security untouched but shift more of the risk from rising medical costs from the government to Medicare beneficiaries. It also calls for sharp cuts to Medicaid health care for the poor and disabled and to food aid for the poor.
  Dubbed the “Path to Prosperity,” the proposal by House Budget Committee Chairman Paul Ryan, R-Wis., also calls for dramatically overhauling the complicated and inefficient U.S. tax code. It would scrap numerous tax breaks and loopholes in exchange for reducing the top income tax rate for both individuals and corporations from 35 percent to 25 percent…. – AP, 4-5-11
• No headway on spending plan talks: The first federal government shutdown in more than 15 years draws closer as President Obama and congressional leaders fail to make progress after back-to-back meetings. Obama and Congress remained billions of dollars apart and at odds over where to find savings… – WaPo, 4-5-11
• As shutdown looms, GOP announces budget plan for 2012: Budget plan would privatize Medicare, cut spending on Medicaid, and offer sharply lower tax rates to corporations and the wealthy…. – WaPo, 4-5-11
• Budget Stances Harden as Deadline Nears for Shutdown: President Obama on Tuesday flatly dismissed a short-term Republican plan to keep the federal government operating past Friday as Speaker John A. Boehner sought deeper spending cuts, putting Congress and the White House on a course toward a government shutdown.
  Showing some exasperation at the impasse over this year’s budget, Mr. Obama appeared at an impromptu White House news conference and said it would be inexcusable if federal agencies were forced to shut their doors beginning Saturday because House Republicans and Senate Democrats could not bridge differences over a relatively small slice of the budget.
  “As I’ve said before, we have now matched the number that the speaker originally sought,” the president said. “The only question is whether politics or ideology are going to get in the way of preventing a government shutdown.”
  Appearing before television cameras in the Capitol shortly after the president spoke, Mr. Boehner seemed equally determined not to give ground. The speaker, who faces intense pressure from his conservative rank-and- file, said he intended to push for the greatest spending cuts achievable and would not be maneuvered by Democrats into settling for less. “We are not going to allow the Senate nor the White House to put us in a box,” Mr. Boehner said…. – NYT, 4-5-11
• Budget wars: Moment of truth arrives: With Republicans upping the ante on spending cuts, President Barack Obama took a tougher line himself Tuesday, warning he won’t sign another stopgap bill without first reaching a deal over the 2011 budget — even at the risk of a shutdown Friday.
  Obama’s comments followed a meeting with congressional leaders at which House Speaker John Boehner floated a compromise of $40 billion in spending cuts — $7 billion more than the $33 billion target negotiators have been working toward since last week. Democrats and administration officials were miffed by the speaker’s late-breaking bid, but it was the first time the Ohio Republican has so explicitly put his name next to a number other than the $61.3 billion in cuts adopted by the House in February. And together with the president’s new stance, it sets the stage for an intense three days before government funding runs out Friday.
  Boehner and Senate Majority Leader Harry Reid (D-Nev.), also present at the White House, met later Tuesday for what both sides described as a “productive” session. “The government is not going to be shut down—yet,” Reid said before closing the Senate Tuesday night. “There’s still air in the tire…I hope we have enough air in the tire to get where we need to go.”… – Politico, 4-5-11
• Budget Talks Head to Brink Parties Far Apart on 2012 Spending, Long-Term Vision as Friday Deadline Nears: Republicans and Democrats stumbled one day closer to a government shutdown on Friday, as the two parties escalated what has become a broader battle over Washington’s role in the U.S. economy.
  Political leaders on Tuesday continued to talk past each other on federal spending, offering little evidence they could soon reach an agreement to avert a shutdown of the government this weekend. Damian Paletta has details.
  The two fights—one over funding the government for the next six months, the other over a sweeping plan to reshape the government for decades to come—showed how far apart the two parties are on basic fiscal issues ahead of the 2012 elections.
  A Tuesday White House meeting called by President Barack Obama featured a series of frustrated exchanges between Senate Majority Leader Harry Reid (D., Nev.) and House Speaker John Boehner (R., Ohio), who upped his demand for spending cuts this year to $40 billion, according to people familiar with the session…. – WSJ, 4-5-11
• White House, GOP fail to achieve agreement on budget: Congressional Republicans and the Obama administration were unable on Tuesday to reach a definitive budget accord that would avert a partial government “shutdown” in three days.
  President Barack Obama met at the White House with the main Democratic and Republican congressional leaders to pressure them to reach an accord on the budget for the six months that remain in Fiscal Year 2011.
  Upon exiting the meeting, House Speaker John Boehner (R-Ohio) said in a communique that an agreement was not achieved.
  For now, the Republicans are continuing to insist on larger budget cuts and on a temporary one-week extension to keep the government functioning. But the White House does not support that strategy, taking the stance that temporary measures send the wrong message and ultimately harm efforts to move toward economic recovery…. – Fox News, 4-5-11
• As Shutdown Looms, Agencies Brace for Its Impact: The National Zoo would close, but the lions and tigers will get fed; Yellowstone and other national parks will shut down. The Internal Revenue Service could stop issuing refund checks. Customs and Border Patrol agents training officials in Afghanistan might have to come home. And thousands of government-issued BlackBerries would go silent. This is what a government shutdown might look like.
  With budget talks between Republicans and Democrats far from resolution, official Washington braced on Tuesday for a replay of the Great Government Shutdowns of 1995 and 1996. For weeks, the Obama administration has been quietly examining the experience of the mid-1990s as a kind of shutdown survival guide. Now those preparations have kicked into high gear…. – NYT, 4-5-11

QUOTES

Philip Scott Andrews/The New York Times

• Shutdown Showdown: Speaker Boehner Calls on Senate to Pass Short-Term Extension: “There’s only one reason that we do not have an agreement as yet, and that issue is spending,” Boehner, R-Ohio, said. “We’re close to a resolution on the policy issues, but I think the American people deserve to know, when will the White House, and when will Senate Democrats get serious about cutting spending?”
  Boehner said “a bill that fails to include real spending cuts will hurt job growth and signal that Washington’s not serious about dealing with its spending addiction.” “I think the Senate should follow the House lead and pass the troop funding bill and do it today,” Boehner said. “I also believe the president should sign the troop funding bill into law. This is the responsible thing to do to support our troops and to keep our federal government open.”… – ABC News, 4-8-11
• Sarah Palin: Commander in Chief’s Appalling Action with Our Troops: Yesterday the House passed H.R. 1363, which funds our Department of Defense and our military for the rest of the year at their current levels. It allows for the continuation of current military operations, which is pretty important when you’re fighting three wars. It also funds the government for another week and cuts $12 billion in wasteful spending. So why would the Commander in Chief declare that he will veto this? Why would he play politics at the expense of our troops who are putting everything on the line to protect us? Memo to the President: I doubt the insurgents will stop and wait for a government shutdown to end before resuming actions. You need to fund our troops, sir.
  Like me, you might be asking yourself: Why on earth would he threaten to veto funding for the troops? What is his game plan? Basically, he’ll veto military funding because he wants the rest of the government funded too. And by the rest of the government, he means things like Harry Reid’s “Cowboy Poetry.” Essentially, he’s holding military funding hostage to NPR funding. This is a perfect analogy for what is wrong with this entire budget showdown. Our federal government has strayed so far from what is constitutionally mandated that they are blind to the fact that NPR funding is not a constitutional duty. Funding our military at a time of war is!
  The House GOP does not want a shut down. They just want legitimate cuts (and I would argue not even enough!). If we can’t agree to cut a billion here and a billion there, we’ll never close this $1.5 trillion deficit…. – Sarah Palin on Facebook, 4-8-11
• Mitch McConnell: ‘Let’s be very clear about this: if the government shuts down, it’s either because Democrats are pretending that a previously non-controversial provision is suddenly out of bounds. Or they refuse to take another baby step in the direction of balancing the government checkbook, something we know the American people want. Neither reason is worth a shutdown — especially when neither side actually wants one.’ – Facebook, 4-8-11
• President Obama on Budget Talks: What’s at Stake & Why It’s Important to the American People: I just completed another meeting with Speaker Boehner and Leader Reid, and I wanted to report again to the American people that we made some additional progress this evening. I think the staffs of both the House and the Senate, as well as the White House staff, have been working very hard to try to narrow the differences. We made some progress today. Those differences have been narrowed. And so once again the staff is going to be working tonight around the clock in order to see if we can finally close a deal.
  But there is still a few issues that are outstanding. They’re difficult issues. They’re important to both sides. And so I’m not yet prepared to express wild optimism. But I think we are further along today than we were yesterday.
  I want to reiterate to people why this is so important. We’re now less than 30 hours away from the government shutting down. That means, first of all, 800,000 families — our neighbors, our friends, who are working hard all across the country in a whole variety of functions — they suddenly are not allowed to come to work. It also means that they’re not getting a paycheck. That obviously has a tremendous impact.
  You then have millions more people who end up being impacted because they’re not getting the services from the federal government that are important to them. So small businesses aren’t seeing their loans processed. Folks who want to get a mortgage through the FHA may not be able to get it, and obviously that’s not good as weak as this housing market is. You’ve got people who are trying to get a passport for a trip that they’ve been planning for a long time — they may not be able to do that. So millions more people will be significantly inconvenienced; in some ways, they may end up actually seeing money lost or opportunities lost because of a government shutdown.
  And then finally, there’s going to be an effect on the economy overall. Earlier today one of our nation’s top economists said — and I’m quoting here — “The economic damage from a government shutdown would mount very quickly. And the longer it dragged on, the greater the odds of a renewed recession.”
  We’ve been working very hard over the last two years to get this economy back on its feet. We’ve now seen 13 months of job growth; a hundred — 1.8 million new jobs. We had the best report, jobs report, that we’d seen in a very long time just this past Friday. For us to go backwards because Washington couldn’t get its act together is unacceptable.
  So, again: 800,000 federal workers and their families impacted; millions of people who are reliant on government services not getting those services — businesses, farmers, veterans; and finally, overall impact on the economy that could end up severely hampering our recovery and our ability to put people back to work.
  That’s what’s at stake. That’s why it’s important to the American people. That’s why I’m expecting that as a consequence of the good work that’s done by our staffs tonight, that we can reach an agreement tomorrow.
  But let me just point out one last thing. What I’ve said to the Speaker and what I’ve said to Harry Reid is because the machinery of the shutdown is necessarily starting to move, I expect an answer in the morning. And my hope is, is that I’ll be able to announce to the American people sometime relatively early in the day that a shutdown has been averted, that a deal has been completed that has very meaningful cuts in a wide variety of categories, that helps us move in the direction of living within our means, but preserves our investments in things like education and innovation, research, that are going to be important for our long-term competitiveness.
  That’s what I hope to be able to announce tomorrow. There’s no certainty yet, but I expect an answer sometime early in the day. WH, 4-7-11 — Mp4 — Mp3
• REP. JOHN BOEHNER, R-Ohio, speaker of the House: We continue to have productive conversations. And you should all know they’re — they’re polite, they’re to the point. But there is no agreement on a number. There’s no agreement on the policy issues that are contained with this. We are continuing to work toward an agreement, because I do believe all of us sincerely believe that we can get to an agreement. But we are not there yet.
• SEN. HARRY REID, D-Nev., Majority Leader: So, we’re going to continue to work to get this done. It’s not easy to do, but it’s doable. And, as I said, we don’t have a lot of time to do that. We are going to get back here at 7:00, and we hope that, that time, when we come out, we will have something done. If not, we will, of course, have to look forward to a bad day tomorrow, which is a government shutdown. -
• John Boehner: The Commander-in-Chief has issued a veto threat on the responsible bill the House is considering that would fund our troops & keep the government from shutting down while cutting $12B. Our goal is to cut spending to create a better environment for jobs – not to shut down the government. We will send the bill to the Senate today. – Facebook, 4-7-11
• Mitch McConnell: ‘This bill does everything Democrats have previously said they want. It cuts Washington spending by an amount that Democrat leaders believe is reasonable. The policy prescriptions it contains have been previously agreed to by Democrat leaders and signed by the President. And, most importantly, this is the only proposal out there that keeps the government open.’ – Mitch McConnell: ‘If the President wants to shut down the government over this bipartisan troop funding bill, that is his prerogative. But I would urge him to reconsider his veto threat and join us in preventing a shutdown instead.’ – Facebook, 4-7-11
• Barack Obama: There’s no reason why we should have a government shutdown. That’s not why we we’re elected. That’s not why we were sent here. And I want to meet the expectations of the American people.
• President Obama on the Ongoing Budget Negotiations: We just had a productive meeting with Speaker Boehner, as well as Majority Leader Reid. We discussed the impasse that we’re currently at with respect to the budget, and I thought the meetings were frank, they were constructive, and what they did was narrow the issues and clarify the issues that are still outstanding.
  I remain confident that if we’re serious about getting something done we should be able to complete a deal and get it passed and avert a shutdown. But it’s going to require a sufficient sense of urgency from all parties involved. It means that people have to recognize that a government shutdown has real consequences for real people.
  There was a interview that was done tonight on one of the nightly news networks — a man from Kentucky named J.T. Henderson. He said he’s counting on his tax rebate because his family has been scraping by, and he might not get it if the government shuts down. So J.T. said if he could speak directly to all of us in Washington he’d tell us that all of this political grandstanding has effects as it trickles down to normal, everyday Americans.
  I could not have said it better myself. A shutdown could have real effects on everyday Americans. That means that small business owners who are counting on that loan to open their business, to make payroll, to expand, suddenly they can’t do it. It means folks who are potentially processing a mortgage, they may not be able to get it. It means that hundreds of thousands of workers across the country suddenly are without a paycheck. Their families are counting on them being able to go to work and do a good job.
  There are ramifications all across this economy. And at a time when the economy is still coming out of an extraordinarily deep recession, it would be inexcusable, given the relatively narrow differences when it comes to numbers between the two parties, that we can’t get this done.
  So my expectation is that folks are going to work through the night. In the morning I will check in with the respective staffs of the Speaker and the Majority Leader, as well as my team here. If we haven’t made progress, we’re going to go back at it again. And we’re going to keep on pounding away at this thing because I’m absolutely convinced that we can get this done.
  There’s no reason why we should not be able to complete a deal. There’s no reason why we should have a government shutdown — unless we’ve made a decision that politics is more important than folks like J.T. Henderson.
  That’s not why we we’re elected. That’s not why we were sent here. And I want to meet the expectations of the American people in terms of delivering for them. – WH, 4-6-11
• Obama: ‘Inexcusable’ not to reach budget deal: Obama’s guests at last night’s budget session — House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nevada — also expressed hope that a shutdown can be avoided.
  “We had a productive conversation and made good progress toward an agreement,” Reid said. “I am hopeful that we will be able to announce a compromise agreement soon.”
  Boehner, standing beside Reid in the White House driveway, said: “There’s an intent on both sides to continue to work together to try to resolve this … no one wants the government to shut down.”
  In the White House press room last night, Obama said, “I remain confident that if we’re serious about getting something done we should be able to complete a deal and get it passed and avert a shutdown.” “But,” he added, “it’s going to require a sufficient sense of urgency from all parties involved.”… – USA Today, 4-7-11
• John Boehner: ‘No daylight’ between tea party and me: “Listen, there’s no daylight between the tea party and me,” the Ohio Republican said in an interview with ABC News conducted Wednesday. “None,” he said, when questioner George Stephanopoulos pushed back. “What they want is, they want us to cut spending. They want us to deal with this crushing debt that’s going to crush the future for our kids and grandkids. There’s no daylight there.”
  “Listen … my job is to do what I can do in the House,” Boehner said of the proposed one-week funding bill. “And I do believe that … it’s a reasonable chance of keeping the government open and funding our troops— at the critical time when we’ve got troops in two wars overseas.”… “The president— I’ve been begging the president for months, ‘Mr. President, let’s lock arms,’” Boehner said…. – Politico, 4-7-11
• Rep. Ryan on Proposed Cuts: ‘Our Budget Literally Pays Off the Debt’: So the president gave us a plan that spends so much more money. He doubled the debt by the end of his first term. And he proposed to triple the debt by the end of this budget. And what we’re offering is a different direction. In our plan, our budget literally pays off the debt… – PBS Newshour, 4-5-11
• President Obama on Budget Negotiations: “We Have Now Matched the Number the Speaker Originally Sought”: From the outset, my goal has been to significantly cut our domestic spending but, at the same time, make sure we’re making key investments in things like education, infrastructure, innovation — the things that are going to help us win the future.
  And I just want to set the context for this now. Again, I’m going to repeat. Speaker Boehner, Chairman Rogers, the Republican appropriations chairman — their original budget proposed $73 billion in cuts. We have now agreed to $73 billion worth of cuts. What they are now saying is, well, we’re not sure that every single one of the cuts that you’ve made are ones that we agree to; we’d rather have these cuts rather than that cut. That’s not the basis for shutting down the government. We should be able to come up with a compromise in which nobody gets 100 percent of what they want, but the American people get the peace of mind in knowing that folks here in Washington are actually thinking about them — because they’re going through a whole lot of struggles right now.
  The only question is whether politics or ideology are going to get in the way of preventing a government shutdown. Now, what does this potentially mean for the American people? At a time when the economy is just beginning to grow, where we’re just starting to see a pickup in employment, the last thing we need is a disruption that’s caused by a government shutdown. Not to mention all the people who depend on government services, whether you’re a veteran or you’re somebody who’s trying to get a passport or you’re planning to visit one of the national monuments or you’re a business leader who’s trying to get a small business loan. You don’t want delays, you don’t want disruptions just because of usual politics in Washington.
  So what I said to the Speaker today, and what I said to Leader Reid, and what I’ve said to the two appropriations chairs, is that myself, Joe Biden, my team, we are prepared to meet for as long as possible to get this resolved…. – WH, 4-5-11 — Transcript

HISTORIANS & ANALYSTS’ COMMENTS

The U.S. Capitol is illuminated at night as Congress continues to work to avert a government shutdown, which will happen if a budget deal is not reached by Friday before midnight. (Associated Press / April 8, 2011)

 
• William Howell: How did we get to the brink of shutdown?: Regardless of whether President Obama and the party leadership within Congress manage to hash out a last minute budget deal before Friday’s deadline, and thereby avoid putting some 800,000 federal workers on furlough, it is worth reflecting on how we got to this moment of impasse.
  Some of the answer, to be sure, concerns the primary players in today’s politics. These politicians have plenty of reasons to battle it out. They genuinely disagree about the appropriate size and purposes of the federal government. They are jockeying for position in the 2012 presidential elections. And through it all, they are appealing to a divided public that is increasingly frustrated with rising deficit spending and persistent unemployment.
  The back story of today’s budget wars, however, goes deeper still. Lurking behind the parties and personalities who animate today’s politics are a set of historical trends and structural forces that are not going away any time soon…. – CNN, 4-8-11
• Long Shutdown Would Harm U.S., Hit Washington Hardest: An extended U.S. government shutdown would cause increasing harm to the nation’s economy, with the Washington area — home to about 350,000 federal workers — bearing the brunt of the damage.
  “The economic damage would mount pretty quickly,” in a two- or three-week shutdown, said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “The longer this drags on, the greater the odds it undermines confidence more broadly.”
  The direct costs of lost income to federal workers and contractors would be about $6 billion a week, said Zandi. “The dollars and cents would start to add up.”… – Bloomberg, 4-8-11
• Gary King: 27% of communication by members of Congress is taunting, professor concludes: Now, a Harvard University professor has analyzed this tribe’s behavior, using computers to look for trends in members’ writings. And he’s learned something that might help explain why Congress is having such trouble working out a deal this week. He learned, to his amazement, that modern members of Congress spend about 27 percent of the time just taunting each other.
  “It’s jarring and surprising,” said Prof. Gary King, an expert in using computers to find patterns in large amounts of data. And, King said, probably counterproductive if we want Congress’s members to trust one another enough to make deals. “The entire government may go bankrupt, I guess. This week, right?” King said in a telephone interview. “We probably want our representatives to be listening to each other rather than calling each other names.”…. – WaPo, 4-8-11
• Jay Newton-Small: Boehner’s Choice: John Boehner has a decision to make. And in some ways it’s akin to choosing between his children. By midnight tonight the government will shut down unless an agreement can be reached between the Speaker and President Obama. Whatever Boehner decides will have long-reaching implications for his Speakership.
  Ideally, Boehner would have preferred extending government funding by another week but Obama threatened to veto such a bill and the Democratically-controlled Senate declared it a “non-starter,” as Senate Majority Leader Harry Reid put it. Boehner can, and has, made the case that the onus to prevent a shutdown was on Democrats – that he gave them a bipartisan option that they rejected (15 House Democrats voted for the measure). Sure, the extension came with a steep price tag, but negotiators had already agreed to the $12 billion in cuts. The bill would’ve also funded the military for the rest of the year, a move most in Congress would readily endorse with so many troops in harm’s way. As of last night 51 senators, including a handful of Democrats, had co-sponsored similar legislation. Dick Durbin, the No. 2 Senate Democrat, put Boehner’s bill on the Senate schedule late last night, but it’s unlikely the extension will come up for a vote unless a broader agreement is reached…. – Time, 4-8-11
• It’s Not Really About Spending: If the federal government shuts down at midnight on Friday — which seems likely unless negotiations take a sudden turn toward rationality — it will not be because of disagreements over spending. It will be because Republicans are refusing to budge on these ideological demands… – NYT, 4-8-11
• Analysis: Obama shifts to play budget dealmaker, avoid blame: “The strategy follows the political logic of President Obama’s whole career, which is to avoid messy battles which make you appear to be a partisan,” said Ross Baker, a political science professor at Rutgers University. “If presidential muscle is used, do it behind the scenes. And above all, appear to be a high-minded and impartial arbiter who negotiates compromises and is distinguished from the brawling demagogues in Congress.”
  “If the public gets angry with a blow-up over the budget and a shutdown, the president needs to be able to say, at a minimum, that he tried,” said Julian Zelizer, history professor at Princeton University. “He wants to avoid having the anger that flowed to Republicans in 1995-1996 focus on him.” -
• Julian Zelizer: Government shutdown: How it came to this: “This is just an eyeball-to-eyeball moment where Republicans want to exercise their power,” said Julian Zelizer, a professor of history and public affairs at Princeton University. “And Obama is trying to defend his reputation with Democrats.”… – CNN, 4-6-11
• Steven F. Hayward: The Ryan Express One part FDR, one part Gipper: The liberal reaction to Paul Ryan’s budget plan makes it evident that liberals are more terrified than they’ve been since Jack Kemp (one of Ryan’s mentors) advanced supply-side economics back in the late 1970s. And although Ryan may not run for president next year, it is clear that just as Ronald Reagan had to embrace the Kemp-Roth tax-cut plan in his 1980 campaign, the eventual GOP nominee will have to embrace Ryan’s budget plan if he or she is going to be taken seriously by the party, and especially the Tea Party.
  As Kemp’s understanding of supply-side economics was about more than just tax rates and revenues, Ryan’s budget architecture is about much more than just fiscal balances, and this is what terrifies liberals the most. The most interesting twist on the whole matter, though, is whether Ryan’s plan would eviscerate the welfare state (cue Nancy Pelosi, et al.), or rescue it within reasonable limits… – National Review, 4-6-11
• DANIEL HENNINGER: A Ronald Reagan Budget Paul Ryan’s budget offers much more than deficit-reduction brimstone: Nothing like Paul Ryan’s budget, “The Path to Prosperity: Restoring America’s Promise,” has been heard from a Republican since February 1981, when Ronald Reagan issued his presidency’s first budget message, “America’s New Beginning: A Program for Economic Recovery.” The echoes reach beyond the titles.
  Both budgets announced a clear break with the Washington status quo. Reagan reversed the policies of the Carter presidency and the infamous stagflation years of weak economic growth, 18% interest rates and 14% inflation. Reagan’s 1981 message posited four reversals: “a substantial reduction” in spending; “a significant reduction in federal tax rates”; relief from federal regulation; and “a monetary policy consistent with those policies.”… – WSJ, 4-7-11
• Analysis: Obama shifts to play budget dealmaker, avoid blame: “If the public gets angry with a blow-up over the budget and a shutdown, the president needs to be able to say, at a minimum, that he tried,” said Julian Zelizer, history professor at Princeton University. “He wants to avoid having the anger that flowed to Republicans in 1995-1996 focus on him.”… – Reuters, 4-5-11
• Tevi Troy Senior Fellow, the Hudson Institute; Former Deputy HHS secretary Plus, Paul Ryan’s budget hard-headed or inhumane?: While it has long been assumed that addressing entitlements was the dreaded “third rail of American politics,” our long-term budget woes are now so severe that a budget putting us on a path to fiscal sanity could be a political plus. Democrats will certainly demagogue Ryan’s budget, but they may find that an unwillingness to get our debt situation under control has turned into the new third rail of the 21st century…. – Politico, 4-5-11
• Can House finance chief Paul Ryan sell his budget to Americans?: “Nobody knows who Ryan is, outside his home area,” said Allan Lichtman, a professor at American University. “I don’t think he has the clout, the charisma, the political power to do this.”
  But if Ryan has any chance of shifting the politics of these “entitlement programs,” then Sarah Binder, a professor at George Washington University, said sticking to his wonky reputation would be a good idea. “To the extent that he’s able to sort of keep his policy-wonk reputation front and center,” that helps, Binder said. She said Ryan’s best opportunity is to be seen as above party squabbling. His persuasion depends on him instead being viewed as an independent, concerned voice. “Typically, voters like short-term benefits, with the costs put off to the future,” Binder said. Ryan’s vision relies on them agreeing to short-term changes, with benefits further off. “You can’t do that without the president, and you can’t do it without the support of both parties.” – WaPo, 4-5-11
• Julian Zelizer: Which GOP will run against Obama?: When George W. Bush finished his presidency, many observers wondered what the Republican Party would look like in the succeeding years. With Democrats in control of Congress and the White House, pundits declared the party was in crisis.
  Republicans had become too comfortable with power, critics said. They had embraced the ways and means of Washington and were as enthusiastic about federal spending as their opponents. When the Tea Party emerged on the national scene, questions about the identity of the GOP only intensified.
  Now that President Obama has officially announced his re-election campaign, it’s time to see how his opponents will position themselves. As the candidates start to emerge for 2012, it is becoming clear that the potential contenders are embracing several different traditions and approaches to Republican politics….
  The struggle over the choice of a Republican candidate for 2012 will be a struggle over the identity of the party in the post-Bush era. Republicans don’t have to choose one tradition over the other. Indeed, some politicians, such as Ronald Reagan, have brilliantly synthesized these themes together.
  But right now there is no candidate of Reagan’s caliber. This primary season will be an important one for the Republican Party in terms of explaining to Americans what the GOP is about and what exactly it would fight for if it gained back the White House. – CNN, 4-5-11 

Budget Showdown 2011: Q & A – How Many Times in US History has the Government Shutdown Over the Budget?

HISTORY Q & A:

How Many Times in US History Has the Government Shutdown Over the Budget?

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

With just under a day left for negotiations before the government will shutdown and despite working non-stop this week Congressional Republicans and Democrats have still not come to an agreement for the 2011 Budget. Wednesday and Thursday President Obama kept meeting with House Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.) at the White House, declaring some progress, still no agreement has been made. Although Obama opposes and threatened to veto the measure Speaker Boehner and Republicans are working on a week extension to prevent the shutdown on midnight Saturday. At issue is the 7 million difference between the Democrats proposed 33 million and the Republicans 40 million in spending cuts. The shutdown would affect 800,000 federal workers out of 2 million workers, and will also  affect all aspects of the government at a time when the fragile economy is just starting to recover.

The government’s budget has been at the center of all previous shutdowns, and the 2011 budget battle is not different. A budget (annual appropriation bills) needs to be passed by Congress and signed by the President prior to the commence of the new fiscal year on October 1, or continuing resolutions also known as stopgap spending bills need to be passed to keep the government operating at the prior year’s fiscal spending limits. However, if Congress fails to pass the appropriation bills, a continuing resolution, or the President vetoes or does not sign the resolution; these results in a government shutdown as there are no funds allocations to operate government.

The last and longest government shutdown in American history was when Democrat Bill Clinton was President and Newt Gingrich was the Speaker of the Republican Congress in November 1995 and in December 1995 through to January 1996. The clash over the 1996 budget caused a government shutdown for six days in the first shutdown and for 21 days during the second shutdown. High partisanship affected the budget negotiation process resulting in the shutdown. According to Charles Tien writing on continuing resolutions in Robert E. Dewhirst, John David Rausch Encyclopedia of the United States Congress, “The government has shut down (partially) a total of 11 times since 1980; the fiscal year 1996 budget battle included two lengthy shutdowns. To avoid or end a government shutdown, the president or Congress must pass either the regular appropriation bill or a continuing resolution.” (149)

Throughout the 1970s, various agencies have had to shutdown because of budget issues. As economic problems increased throughout the 1970s, Democratic President Jimmy Carter became the first president to face the issue of budget fights in Congress leading to the threat of government shutdowns. Lowell Barrington, Michael J. Bosia, Kathleen Bruhn Comparative Politics: Structures and Choices explain Despite being a Democratic President with a Democratic Congress “As Jimmy Carter found out during his four years as president of the United States, even having a legislature controlled by your own party is no guarantee that your policies will pass quickly, or resemble the original initiatives once they do.” (240)

The whole concept of shutting down the government if a budget, appropriation bills, or continuing resolution, started with President Jimmy Carter. Charles Tien writing on continuing resolutions in Robert E. Dewhirst, John David Rausch Encyclopedia of the United States Congress explains, “Since 1980, failure to pass a CR or an appropriations bill has led to a government shutdown. In 1980 President Jimmy Carter’s administration, in reevaluating a law passed in 1870, the Anti-deficiency Act ruled that agencies without appropriations had to close operations. The 1870 law said that “[I]t shall not lawful for any department of the government to expend in any one fiscal year any sum in excess of appropriations made by Congress for that fiscal year, or to involve the government in any contract for the future payment of money in a excess of appropriations.” The Carter administrations ruling of the 1870 Anti-deficiency Act required Agencies without appropriations to shut down immediately.”(149)

Congress used the law to shutdown operations at the FTC in 1980. “The first agency to ever shut down for a lapse in appropriations was the Federal Trade Commission (FTC). The FTC shutdown for one day in 1980 because Congress refused to pass a full-year appropriation for the agency until it had authorizing legislation.” (149)

RONALD REAGAN

The trend of government showdowns and shutdowns over the budget did not slow with the election of Republican President Ronald Reagan. The introduction of Keynesian supply-side economics to the Federal government, differing economic philosophies regarding spending, and an increase of partisanship between Democrats and Republicans accounted for the succession of government shutdowns throughout the 1980s.

During the Reagan administration, the government spent the most time on the brink of government closures. Steven Hayward writes in The Age of Reagan: The Conservative Counterrevolution 1980-1989; “Unable to agree on a budget, Congress passed a “continuing resolution” in November to keep the government running at current levels. Reagan cast his first veto and brieftly shut down the government, in a pattern that would repeat itself much of the next six years (and which was repeated most dramatically during Bill Clinton’s presidency in 1995).” (188)

It was a battle that began from the onset of the administration and spanning the administration’s two terms. As historian Gil Troy writes “During the first two months after his January 20 inauguration, Reagan, with his chief lieutenant David Stockman, launched the Budget Battles as the Regan Revolution’s opening salvo.” (12) The most remembered government shutdown in the Reagan Administration was in 1981. Tien explains that “President Ronald Reagan’s administration used the shutdown guidelines the following year when Reagan vetoed a continuing resolution that resulted in a three-day broader government shutdown.” (149) After short closures in 1981, 1984, 1985, and 1986, the government again faced similar situation in 1987 a closures were averted.

The Reagan administration in presenting and pursuing the passing of their first federal budget in 1981 looked to cut taxes, and cut spending in order to reduce the deficit and balance the budget. Reagan’s economic solution was a program entitled “America’s New Beginning”; a expansive program that would cut taxes, and spending across the board including social programs in order to reduce the swelling deficit, and infuse the lagging economic situation with life. The 1982 deficit was estimated to reach $109 billion.

Reagan in presenting his 1982 budget pleaded with the American people in a televised address; “Our immediate challenge is to hold down the deficit in the fiscal year that begins next week. A number of threats are now appearing that will drive the deficit upward if we fail to act… And without further cuts, we can’t achieve our goal of a balance budget by 1984…. I’m asking all of you who joined in this crusade to save our economy to help again, to let your representatives know that you will support them in making the hard decisions to further reduce the cost and size of government.” (187) Senator Ted Kennedy gave the Democratic response, “This is the government of the rich, by the rich for the rich.” Summing up that the Democratic Congress was not interested in cutting the deficit or spending especially when it came to social programs.

The Reagan administration looked to cut spending in the upcoming 1982 budget. However, as the economy became increasingly worse by September and the Democratic Congress inability to find areas to cut that would have limited impact to relied upon social programs, there was an impass. Reagan reduced the numbers to 13 billion and then again by late October to half that amount, 7-8 billion, without any tax raises, and finally to meet Congress halfway at 4 billion and no less.

• Nov 23, 1981: The spending feud between the Republican President Reagan and the Democratic Congress led to a shutdown. The November 20 deadline for a stop gap spending bill was on a Friday, however the House-Senate Conference delayed it to the following Monday to finalize a bill. The compromise bill consisted of 4 billion in spending savings/cuts, by reducing 2 percent of government spending. The White House in reviewing the numbers claimed there would only be 2 billion in savings from the proposed cuts. When presented with the bill in the morning, Reagan refused to sign Congress’s continuing resolution.  Reporting in the New York Times stated “President Reagan vetoed the measure as “budget-busting.” Faced with the “difficult choice” of either signing the bill or disrupting Government services, the President said, “I have chosen the latter.”  Reagan’s veto led to a shutdown in the government for the afternoon, forcing 400,000 of the 2.1 million federal employees home. Congress approved a stop gap spending bill which later the same day Reagan signed, ending the shutdown with work resuming the next morning. Only on December 12, 1981, did the Congress and and President Reagan approve an Omnibus spending bill, “setting the spending ceilings for the entire year, except in foreign aid. Thus, although the continuing resolution will be superseded by enactment of individual appropriation bills.” (NYT, 12-13-1981, pg. 80)

The one day shutdown cost the government $65 million with a total of 670,000 workers furloughed. A worker who came to work as part of the essential government workers described it as a “snow day without snow…. People come to work sit around confused worry about their car pools, then maybe get interviewed on television.” (NYT, 12-15-1985, pg. D23)

• Oct. 4 1984: Congress failed to pass a stopgap money bill, when a new budget was not passed for the new fiscal year. On October 4^th 500,000 civil servants out of the 2.9 million civil servants where sent home from their jobs; leading to a partial shutdown. An emergency spending bill passed, which Reagan signed, and normal government operations continued the next morning. Both times the shutdowns were limited in their implications and impacts.

• Nov 11, 1985: In Reagan’s second term the government again faced a shutdown. Congress could not agree over a budget agreement, and the need to extend the federal borrowing limit, beyond the limit which was 1,823 trillion, which contradicted plans to balance the budget by 1991.

• Oct. 17, 1986: The Democratic Congress and the Presidency’s inability to agree on a new fiscal budget led to another half day furlough. Congress had also failed to come to an agreement and pass a spending bill. At Midday 500,000 non-essential federal employees were forced home. An emergency spending bill passed, returning employees the next day to work.

GEORGE H.W. BUSH

All previous government shutdowns lasted only short periods of time, in 1990 that changed under Reagan’s successor and former Vice President, and then President George H.W. Bush when the government experienced its longest shutdown. In October 1990 the government was shut down a total of three days, because of Democratic Congress and the Republican President could not agree on a budget for 1991. As signs of economic problems were visible on the horizon, the battle was centered on the Gramm-Rudman-Hollings Act to balance the budget. Democrats wanted to increase taxes on the nation’s richest to reduce the ballooning deficit, but in the 1988 campaign Bush had promise he would not increase any taxes across the board. Bush threatened to veto any budget that Congress presented to him that included a tax increase.

• Oct. 6, 1990: President Bush made good on his veto threat; with the budget vetoed and without a continuing resolution agreed upon, the government was shut down throughout the three day Columbus Day weekend. Both the President and Congress wanted to limit the negative impact of a shutdown, and they agreed the new budget would not include any surtax or tax increases. Over the weekend President Bush then signed a continuance, and government opened on Tuesday morning. The closure during the holiday weekend, limited the impact a three day closure would had on running the government, had it been closed for three days during the week. Bush was however, was forced to agree to tax increases, going against his main campaign pledge. The President signed the Omnibus Budget Reconciliation Act of 1990 on November 5, 1990 securing a budget for the fiscal year.

BILL CLINTON

The 1995-1996 shutdowns were the longest amid the most heated battle over the budget between Congress and the President. President Clinton chose to veto several appropriation bills in the 1996 budget, at issue was funding amounts for social programs such as Medicare, Medicaid, public health, education, and the environment, all programs Clinton pledged to maintain to the public, however, the Republicans wanted Clinton to submit a seven year plan for a balanced budget. The Republican Congress could have voted on a continuance to keep the government operating on the previous fiscal years spending limits. However, the Republican controlled Congress looked to shut down the government hoping the public would blame the Democratic President, leading to a Republican victory in the next year’s Presidential election.

Many believed Gingrich was motivated by revenge as opposed to policy when allowed the shutdown to occur, Senator Tom Delay in his memoir No Retreat, No Surrender wrote, “He told a room full of reporters that he forced the shutdown because Clinton had rudely made him and Bob Dole sit at the back of Air Force One… (After Yizhak Rabin’s funeral, where Clinton refused to discuss the budget as well on the flight) Newt had been careless to say such a thing, and now the whole moral tone of the shutdown had been lost. What had been a noble battle for fiscal sanity began to look like the tirade of a spoiled child. The revolution, I can tell you, was never the same.” Throughout the shutdown Clinton suffered in the polls, but in the end the backlash was against the Republicans instead, whose popularity waned after the shutdowns, and in the 1996 election they actually lost 5 seats in the Congress to Democrats.

• Nov 13, 1995: The first shutdown commenced at midnight on November 13, 2005, after a last minute attempt to avert the shut down; Clinton, Gingrich, House Majority Leader Dick Armey, and Senator Bob Dole met, but failed to reach a compromise. Clinton described the negotiations in his memoirs, My Life; “Armey replied gruffly that if I didn’t give in to them, they would shut the government down and my presidency would be over. I shot back, saying I would never allow their budget to become law, “even if I drop to 5 percent in the polls. If you want your budget, you’ll have to get someone else to sit in this chair!” Not surprisingly, we didn’t make a deal.” At the midnight, a partial shutdown led to 800,000 “nonessential employees” being sent home or told not to come into to work, with only emergency government services remained open. This represented 42 percent of the civil servants employed. The shutdown only ceased with an agreement on a temporary spending bill.
• Dec 16, 1995-Jan 5, 1996: When the temporary funding measures expired, and no continuance was yet again signed, the government shut down this time for 14 days from December 16, 1995 and finally ending on January 5, 1996; the longest shutdown period in US history. Although Congress enacted resolutions to end the shutdown and another temporary spending bill was signed ending the 21 day partial government shut down, the government did not go back to fully functioning until April. Clinton agreed to submit a seven year balanced budget plan approved by the Congressional Budget Office to ensure the government would keep running after the January 26, 1996 spending extension end date. With the agreement, Clinton declared ‘The era of big government is over.’

In 1990 and in 1995, 1996, the budget battles and their subsequent shutdowns forced compromises, especially on the side of the President more than Congress. In 1990 Bush had to agree to tax increases, while in 1996, Clinton had to agree to a seven year balanced budget plan. Bush going against his campaign pledge lost his 1992 bid for re-election, Clinton however, escaped with a higher approval rating for his handling of the 1996 budget showdown, and was re-elected later that same year, while Republicans heavily shouldered the blame for the shutdowns.

Now within hours of the government being shutdown after one of the longest budget battles in history, one side will blamed more than other for allowing a shutdown. Neither side has been able to compromise, Republicans are aggressively pursuing a week extension, and while President Obama has looked to keep out of the battle as much as possible, a veto to even the emergency week extension measure could shift the blame towards both the Democrats and the President. As time wanes one aspect seems almost certain, 2011 will be added to the list of recent government shutdowns over a budget battle, while only time will tell the long term political ramifications a such a shutdown at a time of economic fragility.