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.

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

President Barack Obama Meets with Congressional Leadership in the Cabinet Room
“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

President Obama meets with Congressional leaders to discuss deficit reduction in the Cabinet Room of the White House in Washington July 7, 2011.
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
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