Debt Ceiling Update
So it looks like Boehner, et al are working on a “framework” that is to be announced sometime before the Asian markets open this afternoon. First, the best summary of Where We Are Now comes from British Business Secretary Vance Cable:
“The irony of the situation at the moment, with markets opening tomorrow morning, is that the biggest threat to the world financial system comes from a few right-wing nutters in the American congress rather than the eurozone.”
Co-sign.
The Saturday meeting with the President and the Congressional leadership was apparently short and terse. So Boehner is off working on a deal with Senate leadership. Which is a head-scratcher, until you get the fact that one of the primary goals for the GOP here is to make sure that the President doesn’t get any credit whatsoever for solving this impending crisis. There has been some interesting commentary and fewer pieces of interesting reporting, but here are some suggestions:
White House: We Thought We Were Down To The Details — This is from TPM and provides the detail of the state of the “Grand Bargain” negotiations from Thursday AM when everyone thought they were close until Friday evening when Boehner picked up his marbles to go home. If you saw the President’s press conference from Friday, you’ll recall that he promised to detail the negotiation timeline so people could see how close they were. This piece provides that detail.
What killed the deal last week, and what might make one happen this week Ezra Klein summarizes why the “Grand Bargain” deal did not happen, and the key seems to be:
There’s a question as to whether this was the very best deal Republicans could get or simply close to it. But it’s hard to believe that it was so bad that it ended the talks. What seems likelier is that Boehner spent some time between Thursday and Friday talking to his members and found that his party simply didn’t support a deal with the White House. For one thing, a deal would include some amount of revenue, and that was a hard sell under any circumstances. For another, letting the president look like a dealmaker would potentially dim the GOP’s chances of retaking the White House in 2012. As my colleague George Will put it Thursday, a deal “would enable President Obama to run away from his record and run as a debt-reducing centrist.”
Boehner does not have any control over his caucus unless they get everything they want. And his caucus is not interested in governing, just in making sure that this President has no political advantage.
Republicans and the Deficit Narrative Kevin Drum is interested in the media narrative here and wonders if the media will actually buy the narrative being spun by conservatives that it is President Obama who is the obstacle to a deal. Even though the clear evidence of their own reporting is that the President is certainly *dealing* and Boehner who can’t say yes to anything.
What Might Be the Plan Coming up? From the NYT:
The contours of such a plan were far from clear midday Sunday, but seemed likely to take the form of a two-step process, with a short term increase in the debt limit along with about $1 trillion in cuts, an amount they said was sufficient to clear the way for a debt limit increase through 2011. That would be followed by legislation for future cuts guided by a newly created legislative commission that would consider a broader range of spending cuts, program overhauls and potential revenue increases.
Both sides would also be given another chance to vote for a balanced budget amendment that would set stringent guidelines for future debt ceiling increases.
It’s bullshit, because all this does is make sure that the GOP has another chance to have this fight in another 6 months. And a new legislative body to make this happen? Don’t get me started. This is an awful lot of work to make sure that the President doesn’t get any credit for this. There’s already been a commission to look at reining in the deficit and paying for one more because Republicans cannot live with their own debt reduction narrative is stupid. Credit rating agencies are signaling that even if the debt ceiling gets raised in time, they would still review the US’ credit rating. Not because we can’t pay our bills — we certainly can if allowed to access the credit markets — but because our politics have become that of a banana republic.
Four thoughts on the debt-ceiling fight Smart observations from MSNBC, interestingly enough. Much of the editorializing I’ve seen today have not been kind to Speaker Boehner or his True Believers.
Apparently 4:30 is the time that Boehner rolls out his new framework to his caucus. Reminding everyone of the fact that a framework is not a deal, so who knows if this will appease the markets. President Obama has signaled this AM that he will not approve a short-term hike in the debt limit. So it is looking like we are still waiting to see who blinks first here.
Tags: 2011 Federal Budget
Excellent blogging.
This is inanity straight out of Fire Joe Morgan:
From a 30-year-old office worker: “I’m not that concerned about Medicare. My generation has a completely different outlook. We’re not putting all of our eggs in that basket anymore.”
http://www.delawareonline.com/article/20110724/NEWS02/107240330/Nine-days-counting
Hoping that you’ll die before you get old? That’s already been tried.
There’s an interesting commentary on CNN that compares those upset with Washington over the debt ceiling to the “silent majority” Nixon spoke of in the late 1960s. Well, count me among that group, but with two asterisks.
First, while I am unsatisfied with the Democrats, I lay the blame for this situation solely at the feet of the Republicans who, as the articles in cassandra’s post note, would rather see the country in shambles than to allow the President any chance of spinning any of his leadership on this issue into a basis for his reelection. As jason330 wisely notes in another post, we are all currently at the mercy of a small band of obstructionists, which he accurately lables domestic terrorists; for such blatant tactics can only be described as terrorism.
Second, I’m tired of going about my daily life trying to provide for my family and to better my country in silence while these terrorists are provided aid and comfort by their supporters and what passes for objective journalism these days. It’s past time for the silent majority to stand up and harness its voice in opposition to those who, for political gain, would sacrifice this country. To quote the Tea Partiers, it’s time to take our country back.
A lot of commentary on the Boehner 2 debt ceiling vote plan is that it’s insane – it won’t reassure the markets and Boehner is having a hard enough time getting one debt ceiling vote. Why does he think he will get two? I’m not sure what Boehner is doing but he should be trying to get 25 Republicans to go for a clean vote – or to allow a voice vote.
The Hill is reporting that President Obama is meeting with Democratic Congressional leadership at 6pm today. They also note:
4pm has come and gone with no announcement on a deal. No word on the 4:30pm conference call, but Boehner has no deal in his caucus and now they’ve have a plan at 2pm on Monday. Well after all of the world’s markets open.
And I want to highlight one thing that I keep seeing repeated with NO QUESTIONS ASKED:
Anyone see the flaw in this that no one in the media will ask about?
@Belinsky — It would have been really nice if the NJ reporter who talked to that office worker asked her what her Plan B actually was. THAT would have been illuminating.
When I first started working full time, I didn’t think that Social Security would be around when I was ready to retire. I was wrong about that (but still saving otherwise). This office worker is the reason why it is going to be really hard to get rid of Medicare — I’m betting she’ll be in no position to cover her own medical expenses when she’s ready to retire, either.
Speaking of media cluelessness, here are two bits from the NJ article that should have rung alarm bells with an editor NOT working from the so-called Common Wisdom:
Government trustees DO NOT predict that the fund will be broke by 2036. The fund will not be able to cover 100% of its obligations (it will cover about 75% of them) because benefits paid out won’t match the income from payroll taxes. This, NJ, does not equal being broke.
Financially dysfunctional? How so? Clearly we have people citing an actuarial report that they haven’t bothered to read. And the system does NOT run out of money by 2036. It doesn’t have enough revenue coming in to meet the benefits to be paid out. The two aren’t the same thing.
Sheesh. How often do we have to do this? Media who spend their time crafting narratives from so-called experts with agendas to push. And NO ONE who pays attention to objective facts on the ground — which in this case, are plentiful and real.
Update on the 4:30 call for the GOP from WaPo:
Apparently Harry Reid is working on another approach:
While this looks like a fold, the way they get this number is by counting the Iraq and Afghanistan wars as concluding, which is viewed as a budget gimmick. But this gimmick was first floated in the Ryan Plan, so there you go.
And:
It’s Sunday before the markets open and there’s 3 more plans out there. What a clusterfuck.
If anyone wants to watch what the markets are doing, this is a good summary page from Bloomberg. Just refresh periodically to update the data.
Right now, US futures are down pretty much across the board, but not much more than +/- 1%.
Just found this on the web:
Here’s how many Republicans Senators voted to raise the debt ceiling each time it came up for a vote since 1997. (Thank you Americus Paulytics for this info.)
1997: 55
2002: 31
2003: 50
…2004: 50
2006: 51
2007: 26
2008: 34
2008: 33
Then Obama was elected.
2009: 2
2009: 1
2010: 0
didnt Obama vote against raising the debt ceiling under bush?
In the same way that it took Stalin to discredit communism, I think we’re going to have to suffer through disaster to discredit American conservatism.
Here’s how many Republicans Senators voted to raise the debt ceiling
Remember, Repubs are convinced the reason they lost the House in 2006 and lost to Obama was because they weren’t conservative enough.
One of the key items in the new *framework* supposedly coming from Boehner is a vote on a short-term extension of the debt limit, followed by another vote. Steve Benen documents the flip-flop of the GOP position on this. They were against it before they were for it.
These fools will never leave the children’s table, apparently.
They were against it before they were for it.
That is what the teabag movement is all about. Teabaggers demanded that flipflop and Repubs promised it. It is no surprise.
I think we’re going to have to suffer through disaster to discredit American conservatism.
Agreed. The US working class and middle class needs to be hit with a two-by-four, probably more than once, before it learns to assert its electoral majority in its own interests over the rich. It is tragic.
We will probably lose US world supremacy – but if we do, it is because we have already lost it, like a deer still running after being shot.
losing supremacy is completely irrelevant to me. I just need to make sure I have a job for the next 30 years of my life.
It will be relevant to you when the dollar is no longer the world reserve currency and we are trying to figure out what we can sell to earn yuan or Euros or whatever.
Puck,
with all due respect, and do mean all due respect. That ain’t gonna happen.
so, what’s the worst that can happen? Corporations hold onto their cash, not create jobs and continue to export jobs overseas?
wait isn’t that happening now?
so here’s what happens. It means corporations profits are cut b/c borrowing money costs them more? And they can’t hire people?
isn’t whatever bullshit they are saying WILL happen, ALREADY happening?
When I’m watching CNBC and seeing them go berserk over the debt ceiling, I wonder to myself….self, where did I see this freak out before?
and so we sit at 9.2% U/E hoping we don’t screw our economy?
gloom and doom
Bush scared us with Middle Eastern terrorism
Obama scares us with Wall St Terrorism
So…the Asian markets didn’t go Kaplooey! Or they did and it wasn’t a big deal?
You need a job, dv? With the same corporate overlords you detest?
🙂
My main takeaway here is that people who don’t follow politics are getting a message this summer – Boehner walks out and then Boehner walks out and then Cantor walks out and then Boehner walks out. The average voter doesn’t know why or even care very much. But there is a pattern that sticks in the brain and that pattern is going to spell big trouble for the GOP next year.
People will believe what they already want to believe. Republicans have from now until Nov. 2012 to turn the narrative into Republicans heroically resisting Obama’s insistence on more tax and spend. If the economy does not improve they may well get traction with that narrative.
Even now they have Dems telling their own constituents that the problem is the debt and deficits, not jobs (see: Carney, John).
Regardless of the economy, (and let’s face it, the economy will continue to suck, because NOBODY in DC has any interest in creating jobs) Republicans will run on the fact that Obama tried to cut Social Security and Medicaid. It is a disingenuous position to take but they will take it and have success with it.
It worked in 2010 and Obama keeps making it easier and easier for them to make that claim.
You are right about that. Obama’s biggest offer of cuts will become a Republican campaign ad. If it turns out that Social Security and Medicare aren’t cut, the campaign will be a pissing match about which side really wanted to cut them.
If Repubs want cuts to Medicare so bad, let’s put drug price negotiation and elimination of Part D on the table.
“Even now they have Dems telling their own constituents that the problem is the debt and deficits, not jobs (see: Carney, John).”
In 2008, Carney tried to tell us that Ruth Ann Minner was a fine governor. He gave us Jack Markell.
Only through the most fortuitous of circumstances (Mike Castle choosing to run for the Senate and Glen Urquhart winning a primary) does he have a seat in Congress. It’s time for John to put his thinking cap back on.
Obama endorses Reid ($4 trillion in cuts & close Loopholes & 2012). The press rel;ease sounds like “take it or leave it”
Statement by the Press Secretary
The President has been advocating a balanced plan that would reduce our deficit by $4 trillion by making large cuts in domestic and Pentagon spending, reforming entitlement programs, and closing tax loopholes for corporations, millionaires and billionaires. This sort of approach won support from Democrats and Republicans in the Senate, but the House Republicans walked away after insisting that the budget be balanced on the backs of seniors and the middle class.
Now, faced with the “my way or the highway,” short-term approach of the House Republicans, Senator Reid has put forward a responsible compromise that cuts spending in a way that protects critical investments and does not harm the economic recovery. All the cuts put forward in this approach were previously agreed to by both parties through the process led by the Vice President. Senator Reid’s plan also reduces the deficit more than enough to meet the contrived dollar-for-dollar criteria called for by House Republicans, and, most importantly, it removes the cloud of a possible default from our economy through 2012. The plan would make a meaningful down payment in addressing our fiscal challenge, and we could continue to work together to build on it with a balanced approach to deficit reduction that includes additional spending reforms and closing tax loopholes for corporations, millionaires and billionaires.
Senator Reid’s plan is a reasonable approach that should receive the support of both parties, and we hope the House Republicans will agree to this plan so that America can avoid defaulting on our obligations for the first time in our history. The ball is in their court.
Reid’s Plan:
And apparently he is trying to use cuts that the Ryan Plan already endorsed in this compromise.
Interesting.
This could be good, as long as Obama gives up on “tax reform” that would lower rates for the rich, and drops back to his original tax position of letting the tax cuts expire in 2012.
First thing’s first. It is now a race between Reid and Boehner to present the other house with a passed plan. On the Senate side, expect Lieberman to jump into the spotlight at some point. Also – who here thinks Tom Caper will vote with the Dems?
Boehner’s two step (let’s do all this again ins 6 months) needs 219 to pass, but the thing is DOE because the President has said that he would veto it.
Tom Carper always votes with the Dems, after he has worked on the inside to make the bill as Republican as possible.
The issue where Carper actually votes against Dems is banking. But that is true of everyone Delaware sends to Washington.
This could be interesting.
Reid’s Plan here and here. (this is from TPM)
Boehner’s Plan here. Oy vey.
On your knees. Reid is going to show us how to teabag.