War of words continues as debt limit deadline nears
Senate Majority Leader Harry Reid of Nev., right, joined by Sen. Charles Schumer, D-N.Y., speaks at a news conference on Capitol Hill in Washington, Wednesday, July 27, 2011, to discuss the conflicting plans to deal with the debt crisis.
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AP Photo/J. Scott Applewhite
Updated: 6:51 p.m. ET
With less than a week to go before the Obama administration's August 2 deadline for raising the national debt limit, Democrats and Republicans continue to spar over the relative merits of two separate proposals - one Republican, one Democratic - and a bipartisan agreement appears far from the horizon.
Leaders from both parties continued on Wednesday to push for their own plan while lambasting the other. Neither House Speaker John Boehner's Republican proposal nor Senate Majority Leader Harry Reid's Democratic plan, however, appears to have the necessary votes to pass through Congress.
In a press conference on Wednesday, Reid argued that the Democratic plan was the only "true compromise" on the table, and urged lawmakers to rally around it.
"We're running out of time," he told reporters. "It's time to get serious about finding a compromise."
The Boehner plan, Reid argued, did not qualify as anything more than a "big wet kiss" to the Tea Party - and he pledged that "every Democratic senator will vote against" it.
"It's too bad his caucus is being run by such a small number of people," Reid said, of Boehner. "[House Republicans] are struggling to save a Tea Party bill... The way to resolve this crisis is to ignore the extremists and meet in the middle of the road."
Even as Democrats blast Boehner for putting forth a plan they say caters heavily to the Tea Party, the conservative movement is, in fact, speaking out against the GOP bill - and many believe Tea Party-oriented lawmakers could prevent its passage in the House.
"I am confident as of this morning that there are not 218 Republicans in support of the plan," Rep. Jim Jordan, R-Ohio, said in a Tuesday morning press briefing.
Jordan is one of a handful of Republican lawmakers who have said they will not support Boehner's proposal because it fails to go far enough to reduce the debt. He is also one of 38 conservative lawmakers who earlier this year signed a pledge to vote against any debt increase that was not attached to an amendment to the Constitution requiring a balanced budget.
Boehner's two-step proposal to raise the debt ceiling, which he unveiled Monday afternoon, mandates immediate cuts and caps in discretionary spending in exchange for a short-term increase to the debt limit. A second increase to the debt limit would then be tied to a plan for further deficit reduction, to be determined by 12-member committee. The proposal also requires the House and Senate to vote on - but not necessarily pass - a balanced budget amendment by the end of the year.
In a closed-door meeting with the entire House Republican conference Wednesday morning, Boehner made a passionate entreaty for his bill and told fellow Republicans to "get your ass in line."
"I can't do this job unless you are behind me," he said.
Speaker Boehner needs 217 votes to pass the bill. He can afford to lose 23 Republican votes if he does not pick up any Democratic support.
As of Wednesday evening, 16 House Republicans had told CBS News they planned to vote against Boehner's bill, and seven said they were leaning toward voting against it. Forty-nine House Republicans said they would vote for it, and eight said they were leaning toward voting for it. Fifty-seven Republicans told CBS they were still undecided.
Democrats argue that because Boehner potentially lacks even the House votes to pass his bill, he is necessarily wasting time as the clock ticks toward economic catastrophe.
"The speaker's plan is on life support - and it's time for him to pull the plug," Sen. Chuck Schumer, D-N.Y., told reporters on Wednesday. "The bill remains a nonstarter in the Senate and the president will never sign it."
Schumer argued that the time had come to move on to plans that "have a chance of passing" instead of allowing Boehner to be "led by a fringe in his caucus that thinks a default is okay."
"How many times do we need to throw red meat to the right wing in his caucus?" Schumer asked. "Enough already!"
"Our bill is better in every way, even when it comes to spending cuts," Schumer added.
The Democratic bill calls for $2.2 trillion worth of spending cuts over the next 10 years, according to an analysis by the Congressional Budget Office. In exchange, the debt limit would be increased through the end of next year. The plan circumvents the main objections to a deal from the left and the right by both avoiding cuts to entitlement programs and declining to include revenue increases. However, it includes $1 trillion in reductions from winding down the cost of the wars in Iraq and Afghanistan -- something critics say should not count in the total savings.
Reid initially touted $2.7 trillion worth of cuts in the plan, but says that even after the CBO's revised figure, "We are confident our final bill will meet our bottom line."
"Understand that with CBO we always give them something to look at and rarely is the first run-through what we wind up with," he said. "For us to wind up at $2.4 to $2.5 trillion [in cuts] is fairly easy to do."
The House Republicans' proposal also fell short of claims: The CBO initially said that plan would save only $850 billion over a decade, not the $1.2 trillion claimed by House Speaker John Boehner. (The plan would seek more spending cuts in about six months.)
Boehner decided to retool his plan following the CBO report, and on Wednesday evening announced that the revised proposal reduced up to $917 billion over 10 years. However, it would raise the debt limit by only $900 billion -- which would cover debts for just five months, through January 2012.
Republicans, meanwhile, maintain that Democrats are holding up Boehner's bill in the interest of Mr. Obama's re-election campaign - not the country's economic interests.
"The only thing in this bill that the president hasn't already expressed his support for, either publicly or privately, is that it doesn't get him through his election without having to engage in another national discussion about the debt crisis that's brought us to this point," said Senate Minority Leader Mitch McConnell, R-K.Y., in remarks on the Senate floor Wednesday.
"Do they really intend to suggest that he veto the nation into default for political reasons?" he continued. "That's how I read the threat."
Mr. Obama has repeatedly pledged to veto any deal that does not raise the debt ceiling through the end of 2012 because, he argues, the debate will only grow more contentious as election season moves into full swing - and the American economy will become increasingly at risk.
McConnell, however, points to a different reason: "What he wants more than anything else is more room under the debt ceiling to get him through the election."
In a press briefing on Wednesday, White House Press Secretary Jay Carney dismissed that angle, emphasizing that "this is not a question of who it helps or hurts politically."
"You could argue... this fight is good [for Democrats] politically, but it's bad for the economy," he continued.
Democrats don't appear to be moving closer toward accepting a short-term deal, either.
Rep. James Clyburn, D-S.C., on Wednesday urged Mr. Obama to veto a short-term debt limit increase - and then, with the same pen, sign an executive order to raise the debt ceiling.
"He should put it on his desk next to an executive order that he will have drawn up," Clyburn said of the House bill, assuming that it were able to pass through both chambers of Congress. "And with the same pen that he vetoes that short-term debt ceiling extension he should sign an executive order invoking the 14th Amendment to this issue."
The White House has said, however, that the 14th Amendment option has been categorically ruled out.
"Our position hasn't changed," Carney said on Wednesday. "There are no off-ramps. There's no way around this. There's no escape. And, you know, having an esoteric constitutional argument won't resolve the fact that our borrowing authority is due to expire on August 2nd."
Carney expressed confidence that Congress would reach a deal before that deadline, but warned of a "Sophie's Choice" situation in the absence of an agreement.
"Who do you save?" he asked. "Who do you pay?"
Carney said the Treasury Department would likely disclose its list of spending priorities "if and when we get closer to August 2nd and cooler, saner heads have not prevailed in Congress and we don't yet have an agreement." (Later, a White House official amended Carney's statement, noting instead that "Treasury will provide more information as we get closer to August 2 regarding how the government would operate without new borrowing authority if the debt limit is not increased.")
Carney emphasized, however, that he did not think it would come to that.
"In the end, as crazy in many ways as this situation has become, given that it is so clearly within the capacity of Congress to find the compromise that could clear both houses and be signed in to law to solve this problem, I still believe that, because the stakes are so high and because the American public so clearly wants this done in the right way, that in the end, it will get done," he said.
Our founding Fathers were desperately afraid of "the mob," the unthinking Common Man. Somehow a significant bunch of such persons have been elected to Congress. No republic in history has lasted as long as ours. Every republic that has failed, failed first in managing its finances. We need Tax Reform to equitably tax according to income, that is, according to the financial benefits derived from our society by those subject to taxation; We need Social Security reform so that the program does not treat those who have financially succeeded the same as those who have financially failed; We need Medicare and Medicaid reform so that these programs do not have to compete for doctors and medicines with the very wealthy, whose willingness and ability to pay drives the price of medicine beyond the financial capability of the Nation. I don't know how to do these things. Unfortunately, it is obvious that neither does the mob in we have elected to Congress. We are in very serious peril.
I agree with you that we are toast. Our medical system should be a universal single payer system like most of the real civilized nations of the earth. That would save literally TRILLIONS and solve lots of our economic problems.
When you try to steal from the poor, workers, middle class and elderly like the Tea Bag and their Billionaire Corporate sponsors, YOU ARE ON THE WRONG SIDE. And you will get called on it eventually. You can't advocate stealing from the poor and giving to the rich forever, I'm sorry.
It is no wonder our leaders have such difficulty agreeing, one need simply look at the comments here to see the disfunction in both parties. I have to admit though, seems like the liberals are much more prone to name calling and hyperbole than the Reps. Read for yourself!
I would say the extremeists from both sides are equally guilty of throwing around insults intead of having a debate. If you think one side is "much more prone" than the other it probably means you are on the other side.
Besides taxing the rich and stopping corporate welfare, we could do something like actually creating good jobs for the middle class (that would involve ending Reagan's War on the Middle Class). That would radically increase tax revenue.
And of course stop the overseas occupations and most of the bases which are actually just to protect the interests of the American rich overseas. Cut the military in half and end the imperial wars. End of most of deficit.
An "out of the box" idea would be to levy a special income tax on the top 2%, with an included 100% tax credit for investing money in American businesses. Add to that a special corporate tax on excess cash, with a 100% tax credit for spending the money on hiring. Net zero "tax increase" if they actually create the jobs that Republicans believe they can create.
On the military side, I haven't had enough time to fully study the defense budget and it may be that a 50% reduction is more than is reasonable, but we don't need 50,000 troops in Germany (we only have 100,000 in Afghanistan) and clearly there is room to cut the defense budget without impacting our military capabilties.
Let's cut the tax welfare for the rich and that is the end of half of our budget deficit. We need to support the unions because they are the only ones left who represent the workers who create all the wealth and the middle class. We don't have too many more hopes left to save the planet.
Unfortunately, getting rid of tax welfare for "the rich" won't cover half the current budget deficit. Raising taxes substantialy on the rich could, but you would have to tax the top 2% at 100% to get close to half, and no one is suggesting anything near that regressive - even the one sided Democratic plan only calls for the top rates to go back to the Reagan era at 50%.
And corporate welfare, although also very large, doesn't add up to half either.
The only practical answer to our deficit spending is a combination of revenue increases and significant spending cuts. At least 50/50, although to get anything actually passed it will need to be more along the lines of the $1 revenue / $3 cuts that the Gang of Six or the Presdiednt has already proposed as a framework.
It can be done. The budget can be balanced. And we can "live within our means". But we have to start with an agreement on what the government is actually supposed to be doing, and then fund it appropriately, as the "means" we are trying to live "within" isn't some arbitrary number like 14% of GDP - or 22%.
So when will the 112th congress and the 51% voter-elected president terminate their lucrative benefit package and take a salary reduction? Their livelihood is supported only by "taxpayers", not the voters and their is a big difference! In a show of good faith and as "an effort to lead by example" all Fox, ABC, CBS, CNN, and NPR news anchors need to be asking their guests, hobbits and RINOs these questions. And I do not want to hear this "feel your pain" rhetoric anymore followed by a 2:00 T-time!
1) 40 cents out of every dollar spent by the federal government is borrowed. Does anyone think this is responsible management of the nation, or even sane?
2) Just below 20% of federal spending now goes to pay the interest alone on the national debt. Does anyone think this is responsible management of the nation, or even sane?
3) The CBO, the GAO, and President Obama's Deficit Commission all state that what we are currently doing is NOT SUSTAINABLE. Does anyone think this is responsible management of the nation, or even sane?
4) We are now $14.4 trillion in the hole, and are currently adding $1.5 trillion to it each year. Does anyone think this is responsible management of the nation, or even sane?
5) The United States is increasing the size of federal spending by 7-8% each year, even though the rate of inflation is only about 3% per year. Does anyone think this is responsible management of the nation, or even sane?
In light of the facts above, what would be the responsible and sane course of action? At what point is the national debt TOO MUCH?
The federal government is growing by 7-8% each year. You think that is the responsible way of handing things? When the federal government talks about cuts, it is talking about the cuts to growth - not cuts in the way most people think. Why should we have to stifle job growth in the private sector by increasing taxes on businesses and American taxpayers - just so we don't have to actually cut anything from a bloated and wasteful federal government? Isn't it big enough for you? When will it be big enough? When it consumes everything in sight, and we totally move from being a once successful democratic republic to becoming a failed socialist democracy like the failing nations in Europe?
It is time for the federal government to make the sacrifices this time. It is time to put that insatiable bloated pig on a diet. We don't create any future value by raising taxes and continued massive over spending - that devalues the US dollar and risks inflation. We have to get a handle on federal spending. We are in this mess because President Bush and President Obama expanded the federal government when we could not afford to do so. We have to stop the nonsense, and reduce the size and scope of the federal government before it consumes us.
WE have not raised Taxes in over a decade and that is why the U.S. is impoverished. No taxes yet billions of dollars on war and more war! Even nature works in balance, incoming and outgoing, but the U.S. only has outgoing expenditures and nothing coming in...
The real truth is that the Republican Party is a House of Greed & Uncompromise. They know nothing of the Art of Compromise which distinquishes a a Democracy and not a communistic state. They refuse to give aid to the poor and needy and to do anything Constructive for the country as in building highways, up-to-date and modern schools, but they can give money for more golf courses and country clubs. They never fail to give aid to those who have no need for it -- the rich and powerful and their laws are measured to benefit the powerful. Just look at Gov. Walker and you will see the real, hidden agenda of the GOP Party.
RobAla: Kudos for posting something that is not your usual conservative propaganda. Your points 1 to 4 are completely factual, and you are also completely right to point out that gis situation is not responsible. Your point #5 is a bit misleading as during the Obama administration the "additional spending" has been virtually all one-time stimulus spending or additional temporary tax breaks, so the trajectory of his administration is not an 8% increase every year in the structural spend. But the summary is also completely factual - we have to change the situation, and do it now.
Your final paragraph and conclusion that we have to "reduce the size and scope of federal government" is not necessarily correct, however - federal employment has actually been coming down since Obama was elected, and we can get the same "scope" of government at the same "size" for substantially less cost, and if the revenue side was normal we could easily be paying off the debt.
And to mylife - your statement "we should never raise taxes" IS conservative propaganda. If we had the tax rates set where they were, especially during the Reagan administration (after Reagan cut them) then your statement "if we balanced the budget tax rates would always stay the same" would be valid. But right now we have artificially AND TEMPORARILY cut tax rates more than 30% below the historical average, and we need to let all those temporary cuts expire. That's not a tax "increase.
Thought about why businesses would sit on cash, when they usually invest it to grow more profit? How about the punishing impacts of the horrible health care law? These business are extremely concerned with all the additional fiscal burdens this stupid law places on them. They can't just print money, like Washington - they actually have to balance budgets and live within their means.
If there is less demand for products, it is because 9.2% of Americans can't find a job in this horrible economy. Still, Washington demands higher taxes, in order to attempt to feed it;s insatiable greed. Never mind, that higher taxes stifle hiring in the private sector - the bloated federal government must grow even larger.
The health law has little to do with this issue. Most of the companies sitting on cash are large enough they have health plans in place and are not impacted by the law.
The primary reasons that companies have cash on the sidelines are:
1. The down economy makes acquisitions more attractive, and cash reserves make them easier to execute.
2. Taxes are very low. When taxes are high, there is. "use it or lose it" pressure, which has been lost now.
3. Companies realize that hiring is a long term investment not a short one. With all the Washington battles many companies are uncertain if they are going to lose business from spending cuts impacting them, and if things go downhill with the economy they may lose business from that.
The combination of all three will keep money in pockets until the future of the economy looks clearer.
Just because President Obama says that increasing taxes on businesses and American taxpayers, in order to maintain the bloated federal government expansions that he has created without the federal funds needed to do so - is a "balanced" approach, it does not make it so.
Feeding an expanding federal government at the expense of stifling jobs in the private sector, during a time of 9% unemployment - is anything but "balanced". It is lopsided in favor the federal government, and against business and American taxpayers.
Conservative propaganda. The government has not expanded under Obama - federal employment has shrunk. The current taxes are not stifling growth. Our deficit is primarily caused by a loss of revenue, rich people are doing very well and large corporations have record profits and it is simply unfair to ask poor, sick and old people to suffer more and not ask those doing very well to contribute their share.
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And of course stop the overseas occupations and most of the bases which are actually just to protect the interests of the American rich overseas. Cut the military in half and end the imperial wars. End of most of deficit.
On the military side, I haven't had enough time to fully study the defense budget and it may be that a 50% reduction is more than is reasonable, but we don't need 50,000 troops in Germany (we only have 100,000 in Afghanistan) and clearly there is room to cut the defense budget without impacting our military capabilties.
And corporate welfare, although also very large, doesn't add up to half either.
The only practical answer to our deficit spending is a combination of revenue increases and significant spending cuts. At least 50/50, although to get anything actually passed it will need to be more along the lines of the $1 revenue / $3 cuts that the Gang of Six or the Presdiednt has already proposed as a framework.
It can be done. The budget can be balanced. And we can "live within our means". But we have to start with an agreement on what the government is actually supposed to be doing, and then fund it appropriately, as the "means" we are trying to live "within" isn't some arbitrary number like 14% of GDP - or 22%.
The government is the only thing we have left to save us from the corporate pirates who want to seize all our wealth for themselves.
Democrat Plan = "Rear-ending to Amercan People"!
Does anyone think this is responsible management of the nation, or even sane?
2) Just below 20% of federal spending now goes to pay the interest alone on the national debt.
Does anyone think this is responsible management of the nation, or even sane?
3) The CBO, the GAO, and President Obama's Deficit Commission all state that what we are currently doing is NOT SUSTAINABLE.
Does anyone think this is responsible management of the nation, or even sane?
4) We are now $14.4 trillion in the hole, and are currently adding $1.5 trillion to it each year.
Does anyone think this is responsible management of the nation, or even sane?
5) The United States is increasing the size of federal spending by 7-8% each year, even though the rate of inflation is only about 3% per year.
Does anyone think this is responsible management of the nation, or even sane?
In light of the facts above, what would be the responsible and sane course of action?
At what point is the national debt TOO MUCH?
The federal government is growing by 7-8% each year. You think that is the responsible way of handing things? When the federal government talks about cuts, it is talking about the cuts to growth - not cuts in the way most people think. Why should we have to stifle job growth in the private sector by increasing taxes on businesses and American taxpayers - just so we don't have to actually cut anything from a bloated and wasteful federal government? Isn't it big enough for you? When will it be big enough? When it consumes everything in sight, and we totally move from being a once successful democratic republic to becoming a failed socialist democracy like the failing nations in Europe?
It is time for the federal government to make the sacrifices this time. It is time to put that insatiable bloated pig on a diet. We don't create any future value by raising taxes and continued massive over spending - that devalues the US dollar and risks inflation. We have to get a handle on federal spending. We are in this mess because President Bush and President Obama expanded the federal government when we could not afford to do so. We have to stop the nonsense, and reduce the size and scope of the federal government before it consumes us.
The real truth is that the Republican Party is a House of Greed & Uncompromise. They know nothing of the Art of Compromise which distinquishes a a Democracy and not a communistic state. They refuse to give aid to the poor and needy and to do anything Constructive for the country as in building highways, up-to-date and modern schools, but they can give money for more golf courses and country clubs. They never fail to give aid to those who have no need for it -- the rich and powerful and their laws are measured to benefit the powerful. Just look at Gov. Walker and you will see the real, hidden agenda of the GOP Party.
Your final paragraph and conclusion that we have to "reduce the size and scope of federal government" is not necessarily correct, however - federal employment has actually been coming down since Obama was elected, and we can get the same "scope" of government at the same "size" for substantially less cost, and if the revenue side was normal we could easily be paying off the debt.
And to mylife - your statement "we should never raise taxes" IS conservative propaganda. If we had the tax rates set where they were, especially during the Reagan administration (after Reagan cut them) then your statement "if we balanced the budget tax rates would always stay the same" would be valid. But right now we have artificially AND TEMPORARILY cut tax rates more than 30% below the historical average, and we need to let all those temporary cuts expire. That's not a tax "increase.
If there is less demand for products, it is because 9.2% of Americans can't find a job in this horrible economy. Still, Washington demands higher taxes, in order to attempt to feed it;s insatiable greed. Never mind, that higher taxes stifle hiring in the private sector - the bloated federal government must grow even larger.
The primary reasons that companies have cash on the sidelines are:
1. The down economy makes acquisitions more attractive, and cash reserves make them easier to execute.
2. Taxes are very low. When taxes are high, there is. "use it or lose it" pressure, which has been lost now.
3. Companies realize that hiring is a long term investment not a short one. With all the Washington battles many companies are uncertain if they are going to lose business from spending cuts impacting them, and if things go downhill with the economy they may lose business from that.
The combination of all three will keep money in pockets until the future of the economy looks clearer.
Feeding an expanding federal government at the expense of stifling jobs in the private sector, during a time of 9% unemployment - is anything but "balanced". It is lopsided in favor the federal government, and against business and American taxpayers.