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Struggling to avert an unprecedented national default, congressional leaders jettisoned negotiations on a sweeping deficit-reduction package Friday despite a plea from President Barack Obama to "do something big" to stabilize America's finances.

Instead, lawmakers embarked on competing fallback plans as a critical Aug. 2 deadline neared, a House Republican version given little chance of success, even by some supporters, and a bipartisan Senate approach holding out more promise to avert what Obama called financial "Armageddon.".

At the behest of conservatives, House Republicans announced plans to vote next week on legislation to permit more borrowing automatically if Congress approves a balanced-budget constitutional amendment. Senate approval of that amendment seemed extremely unlikely in a vote set for the next few days.

At the same time, Senate leaders from both parties worked on their own fallback measure that would allow Obama to raise the debt limit without a prior vote by lawmakers, discussions that now have expanded to include House officials and top White House aides.

That plan was likely to include limits on spending across thousands of government programs, and possibly a down payment on cuts, as well.

As part of that proposal, a panel of lawmakers would recommend cuts in benefits programs by the end of the year, with the House and Senate required to vote yes-or-no on the package without possibility of changes.

"If they show me a serious plan I'm ready to move," declared Obama at his second news conference of the week, even though he said he wanted a far more sweeping deal that might even have raised the age of Medicare eligibility from 65 to 67 if Republicans would increase selected taxes.

"We are obviously running out of time," he said.

Senate Republican leader Mitch McConnell said, "Now the debate will move from a room in the White House to the House and Senate floors," an indication that the daily closed-door negotiations on Obama's home ground were a thing of the past.

The House Republican rank and file were advised in a GOP meeting that, barring action by Congress, the government would be able to pay only about half its bills after Aug. 2, and separately that a default could cost the government trillions of dollars in the form of higher interest rates on the debt.

"No matter what 50 percent you choose to pay, there are things in that 50 percent you don't pay that would have really severe consequences," Rep. John Campbell, R-Calif., said afterward.

The second White House news conference in a week was a testament to the overriding political and economic significance of the issue that has convulsed Congress as well as the administration.

Urging lawmakers to cut trillions from deficits at the same time they raise the debt limit, the president said he favored a balanced approach that included spending cuts, changes to huge government benefit programs and higher taxes on wealthy individuals and certain industries.

It was an offer Republicans could — and did — refuse.

"There are going to be no tax hikes because tax hikes destroy jobs," said House Speaker John Boehner of Ohio.

While Boehner had earlier shown some flexibility on closing tax loopholes as part of an unprecedented deal with Obama, many Republican lawmakers are adamant that deficit reductions be limited to spending cuts.

To underscore their conservative priorities, GOP leaders scheduled a vote for next week on legislation they said would cut $111 billion in the budget year that begins Oct. 1. It would also require a steady decline in spending as a percentage of the overall economy over the next decade.

Even some supporters conceded it was a symbolic gesture given the realities of divided government.

"I think everybody knows the president won't sign this," Campbell said after the closed-door Republican meeting.

"But we're putting a marker down, and that's an important step that begins the process of resolving this," he added.

If so, it was in a style that only congressional insiders might recognize as the beginning of the endgame to an unprecedented problem.

McConnell issued a statement announcing the Senate would vote on both a balanced budget amendment and the House's "Cut, Cap and Balance Plan."

His statement didn't say so, but neither measure has much, if any, chance of passage in the Democratic-controlled Senate.

Still, the votes themselves would clear the way for debate on the fallback plan the two Senate leaders have been working on for the past several days.

Senate aides said the measure was not yet fully drafted, but likely to come up for debate by the end of next week.

Obama offered measured praise for that option: "It is constructive to say that if Washington operates as usual and can't get something done, let's at least avert Armageddon."

A two-thirds vote of each house is required for passage of a constitutional amendment. Approval would send the issue to the states, where ratification by three quarters of the legislatures is needed to make it part of the Constitution.

Presidents play no official role in amending the Constitution, but Obama expressed his opposition to the GOP-backed measure anyway.

"We don't need a constitutional amendment to do that. What we need to do is do our jobs," he said.

so, sort of like i said earlier today. as far as the republican plan to cut, cap, and balance, i think the cap part is quite vital to emphasize. this is because in it's current state, the budget is automatically geared toward annual expansion, through baseline budgeting. baseline budgeting automatically accounts for a certain percentage of growth each year for every department or program. so let's say that an agency's annual budget is supposed to expand by 5% over last year's budget. well if someone comes out and proposes a 2% cut for that agency, then this is reported as a budget cut, even though the agencies budget has grown by 3%. unless we get rid of this practice, we're almost doomed to bankruptcy. we'll never get a handle on deficit spending.

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and i have to say, i'm disappointed with the stubborn obstinance from tea party members (particularly the freshmen) to raising the debt ceiling at all. to me, this just shows a lack of level headedness. you can't cut 40% of the budget overnight, which is what would happen if we didn't raise the limit, and you simply can't bring about the changes that need to be made with a majority in only one house of congress.

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and of the cut, cap, and balance bill, they're saying it's likely not to pass the senate. but i think this is a good indicator of just who IS serious about tackling our out of control debt that holding this country down. for the democrats to oppose a bill that will leave it to the states to decide if the federal government should have a balanced budget (the clear common sense thing to do), just shows that it is impossible for democrats to support less spending. they can't do it.



The Congressional Budget Office estimates federal spending at $46.1 trillion over the next 10 years, a dramatic escalation from projections before Mr. Obama took office. Mr. Boehner's modest proposal was to trim that back 5.2% over the decade, but the president balked.

Yet the $4 trillion in deficit reduction that Mr. Obama talks about is shy on details. No one who's attended his frequent negotiating sessions knows what his proposal really is.

The president has made a bipartisan agreement even more difficult by declaring certain spending off-limits to cuts. Mr. Obama's "untouchable" list includes his $1 trillion health-care reform, $128 billion in unspent stimulus funds, education and training outlays, his $53 billion high-speed rail proposal, spending on "green" jobs and student loans, and virtually any structural changes to entitlements except further squeezing payments to doctors, hospitals and health-care professionals.

Mr. Obama has offered no evidence since becoming president that he wants to restrain the upward trajectory of government spending. He does want higher taxes to pay for significantly higher federal spending. But he wants Republicans to deliver the tax increases, since Democrats couldn't pass them last year despite controlling both chambers of Congress.

Republicans have wisely declined. Demanding the GOP vote for immediate tax increases that would be offset by vague, future tax cuts conjures up images of Charlie Brown, Lucy and the football. The tax increases would be real—the future tax rate cuts would be imaginary. And Mr. Obama has opposed any serious spending enforcement mechanisms, such as a balanced budget amendment or hard caps on spending.

His tone also hasn't helped achieve a comprehensive agreement. The president's two most recent press conferences, in which he accused the GOP of foot-dragging, convinced Republicans that he was interested in scoring political points and attracting independents, not facilitating a deal. Convening high-profile White House meetings without offering substantive concrete proposals and then having his aides leak madly (and inaccurately) to the press afterward further squandered trust.

There's still time for a deal, but it could come after the Aug. 2 deadline, and after much damage has been done to America's financial standing. Then the key political question will become who gets the blame. By then, it should be obvious that the man who promised to transcend petty politics and legislative gridlock made things worse.

Washington is dysfunctional. And to paraphrase the president's senior adviser, David Plouffe, Mr. Obama owns the dysfunction. The president has not only governed as a liberal—he's governed as an incompetent liberal, thereby reminding voters that electing a Republican Congress and president next year is the only way to change direction.

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here's a stark fact:


It took the United States of America 233 years (1776-2009) to amass a national debt of $11 trillion. Yet President Barack Obama's record large 2009 budget deficit estimated at $1.85 trillion and his own spending plans for the next 10 years (2010-2019) show that our national debt will likely double over the next 10 years.

Using the Obama administration's own projections, the non-partisan Congressional Budget Office (CBO) estimates that, including the record 2009 budget deficit of $1.85 trillion, and huge annual deficits over 2009-2019 will result in an additional $11.1 trillion in national debt, on top of the current $11.4 trillion.

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The 2009 budget was in place before President Obama took office.  Even the right-wing Cato Institute places the 2009 deficit in President Bush's column:
http://www.cato.org/pub_display.php?pub_id=11094

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part of it, until obama ballooned it.


anyway, good to see you again.

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As a critical Aug. 2 deadline approached, the chances that Obama would get $4 trillion or even $2 trillion in deficit reduction on terms he preferred were quickly fading as Congress moved to take control of the debate. At a news conference Friday, Obama opened the door to a smaller package of deficit reductions without revenue increases.

Obama's communications director, Dan Pfeiffer, said the president, Vice President Joe Biden and White House aides were discussing "various options" on Saturday with congressional leaders and House and Senate aides from both parties.

House Republicans prepared to vote this coming week on allowing an increase in the government's borrowing limit through 2012 as long as Congress approved a balanced-budget constitutional amendment, which is highly unlikely.

In the Senate, the Republican and Democratic leaders worked on a bipartisan plan that would allow Obama to raise the debt limit without a prior vote by lawmakers. The talks focused on how to address long-term deficit reduction in the proposal in hopes of satisfying House Republicans.

A weekend deadline that the president gave congressional leaders to choose one of three deficit reduction options became a moot point after House and Senate leaders made it clear to the White House on Friday that they were moving ahead with their own plans.

In the Republicans' address Saturday, Sen. Orrin Hatch of Utah argued for passage of a balanced-budget amendment. He blamed Democrats for failing to embrace adequate budget cuts and said "the solution to a spending crisis is not tax increases."

An amendment that requires a balanced budget, he said, "would put us on a path to fiscal health and would prevent this White House or any future White House from forcing more debt on the American people."

The government said Friday it was using its last stopgap measure to avoid exceeding the current $14.3 trillion debt limit.

Obama had held five straight days of meeting with congressional leaders at the White House, but none of the three options he proposed -- deficit cuts of $4 trillion, $2 trillion or $1.5 trillion over 10 years -- were unlocking enough support to increase the debt ceiling by the $2.4 trillion Obama wants to make it last beyond the 2012 elections.

Essentially declaring those discussions over, Senate Republican leader Mitch McConnell said Friday: ""Now the debate will move from a room in the White House to the House and Senate floors."

i highlighted the above paragraph because i wanted to comment on it. now see, i was under the impression initially, that the mcconnell plan meant to increase the debt ceiling by an equal amount of cuts, but i was wrong about that. basically, his plan allows the prez to raise the limit by $2.4T, and they're only working on cuts of about 1 trillion.

i guess this is a good tactical move, given the fact that republicans are still a minority, taxes won't be raised at a time of economic difficulty, and the republicans won't get blamed for not raising the limit, but then again, it's sort of caving AGAIN (kind of like they did with the budget battle), or at least it will be seen that way by the base. but then again, with obama running for re-election, i think the base has the best motivation possible.

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I think that move puts the interests of the party above the interests of the nation they were elected to represent.

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Originally Posted by Bryant Platt:
I think that move puts the interests of the party above the interests of the nation they were elected to represent.

how so?

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Originally Posted by Bryant Platt:
I think that move puts the interests of the party above the interests of the nation they were elected to represent.

That could pretty much describe anything both sides have done in the last few years though. The #1 aim of any party is to get elected f they're not in power, or to get re-elected if they are in power. Previous to the last few election cycles, that generally meant lying to the public with empty promises of things they never had any intention of doing while in power. Then, around the 2000 election, it became more "attack politics", where you try to demonize your opponent, and in the last while it's moved to more active measures like blocking every single thing your opponent tries to do while in power in the hope that people will blame them for the resulting mess and elect you to "fix" it. And before anyone tries to jump down my throat here, I'm saying that both sides do it, it's not exclusive to one party.    

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Tom Coburn, who yesterday released a $9 trillion deficit reducing plan of his own, has unexpectedly rejoined the “Gang of Six,” that previously moribund group of senators from both parties seeking to work out a deficit deal. The Gang’s new proposal aims to reduce the deficit by $3.7 trillion over ten years, and initial indications suggest that it could actually pass the Senate.

    Conrad said there was a “remarkably enthusiastic reaction” in the room of 43 senators.

    “There are many of us who believe deeply, how can you extend the debt limit and not deal with the debt,” Conrad said. “I see there are many groups that have that same feeling. Maybe there is a chance to get something critically important done for the country here.

    “I thought it was a thrilling meeting,” said Sen. Joe Lieberman (I-Conn.). “I think what happened what began to happen is that the Gang of Six began to turn into a bipartisan majority of senators. Who want to solve a national problem and not play partisan politics. It got very emotional.”

    “I think within 24 hours, you will see a significant number of senators publicly support this,” said Sen. Chris Coons (D-Del.).

    Even GOP leaders were open to it.

    “If you had a net tax cut, presumably it would be consistent with the pledge” [not to raise taxes], said Sen. John Thune (R-S.D.), No. 4 in leadership.

    “I think you’ll see a fair amount of enthusiasm the possibility that this could be integrated and a part of a debt-ceiling fix, with substantial cuts and with a pathway to real reform,” said Sen. John Cornyn (R-Texas), the Senate GOP’s campaign chief. “I think everybody is going to realize nobody is going to get 100 percent of everything they want.”


The plan includes cuts to Medicare, and includes $1 trillion in new revenues over the next ten years, according to POLITICO. Senators say the proposal would result in a net tax decrease, because the Alternative Minimum Tax would be repealed.

The "Gang of Six" presented the plan to a group of 43 senators this morning, who reportedly applauded once Coburn announced he was "back" in the group, after quitting it in May.

Sen. Kay Bailey Hutchison (R-TX) said the proposal would get a majority of Senate votes, and encouraged the House to consider the plan.

“Likely 60,” she told The Hill. “The House should like this plan because it has spending cuts and I believe it will spur the economy.”

“There’s a lot of support for turning the gang into a mob,” added Sen. Mark Udall (D-CO).

President Barack Obama has called for more substantial cuts than the $1.5 trillion proposed by Senate Minority Leader Mitch McConnell (R-KY) and Senate Minority Leader Harry Reid (D-NV) in their "last-ditch" proposal. He said he wants a "big deal," but barring a cuts greater than $4 trillion, would accept a smaller one with that still has revenue increase.

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Originally Posted by Dødherre Mørktre:

    “I thought it was a thrilling meeting,” said Sen. Joe Lieberman (I-Conn.). “I think what happened what began to happen is that the Gang of Six began to turn into a bipartisan majority of senators. Who want to solve a national problem and not play partisan politics. It got very emotional.”

So is there a possibility that sanity might be prevailing on both sides, that politicians might be actually taking the real world not account and not looking at everything through the distorting lenses of party dogma/ideology?

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Senator Jeanne Shaheen (D-NH) is displaying a chart on the Senate Floor that shows each president, starting with John F. Kennedy, and their respective raises of the debt ceiling. The information is quite telling.

Kennedy raised the debt ceiling 4 times for a total increase of 5%.

Johnson raised the debt ceiling 7 times for a total increase of 18%.

Nixon raised the debt ceiling 9 times for a total increase of 36%.

Ford raised the debt ceiling 5 times for a total increase of 41%.

Carter raised the debt ceiling 9 times for total increase of 59%.

Reagan raised the debt ceiling 18 times for a total increase of 199%.

George H.W. Bush raised the debt ceiling 9 times for a total increase of 48%.

Clinton raised the debt ceiling 4 times for a total increase of 44%.

George W. Bush raised the debt ceiling 7 times for a total increase of 90%.

Obama has raised the debt ceiling 3 times for a total increase of 26%.

Adding the percentages of the Democratic presidents’ total debt ceiling increases (shown in blue) together reveals that President Ronald Reagan, arguably the most popular Republican president on this list, actually raised the debt ceiling by a higher percentage than all of the Democrats combined.

The Democrats’ total percentage increase is 152%. President Reagan increased the debt ceiling by 199% in his two terms in office.

The Republican presidents, shown in red, when added together, have raised the debt ceiling by a total of 414%.

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maybe that's why they're bff's.

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Originally Posted by Dødherre Mørktre:
maybe that's why they're bff's.

Was actually just about to post this.....

The new party of Reagan


After he switched to the Republican Party in 1962, Ronald Reagan famously quipped: “I didn’t leave the Democratic Party. The party left me.”

Now, the Republican Party is doing the same thing to him — and Democrats are happy to take Reagan back.

At Tuesday morning’s meeting of the House Democrats, caucus chairman John Larson rallied his colleagues for the day’s debt-limit debate by playing an audio recording of the 40th president.

“Congress consistently brings the government to the edge of default before facing its responsibility,” Reagan says in the clip. “This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets, and the federal deficit would soar. The United States has a special responsibility to itself and the world to meet its obligations.”

“Kind of sums things up,” Larson said, playing the same clip again at a news conference.

Nobody knows what Reagan, who died in 2004, would make of the current fight over the debt limit. But 100 years after Reagan’s birth, it’s clear that the Tea Party Republicans have little regard for the policies of the president they claim to venerate.

Tea Party Republicans call a vote to raise the debt ceiling a threat to their very existence; Reagan presided over 18 increases in the debt ceiling during his presidency.

Tea Party Republicans say they would sooner default on the national debt than raise taxes; Reagan agreed to raise taxes 11 times.

Tea Party Republicans, in “cut, cap and balance” legislation on the House floor Tuesday, voted to cut government spending permanently to 18 percent of gross domestic product; under Reagan, spending was as high as 23.5 percent and never below 21.3 percent of GDP.

That same legislation would take federal spending down to a level last seen in 1966, before Medicare was fully up and running; Reagan in 1988 signed a major expansion of Medicare.

Under the Tea Party Republicans’ spending cap, Reagan’s military buildup, often credited with winning the Cold War, would have been impossible.

No wonder Democrats on Tuesday were claiming the Republican icon as one of their own. After the caucus meeting with the Reagan clip, Rep. Mike Quigley (D-Ill.) began the day’s debate by reading from a 1983 Reagan letter to Congress warning that “the full consequences of a default — or even the serious prospect of default — by the United States are impossible to predict and awesome to contemplate.”

“In the year of his 100th birthday, the Great Communicator might be amazed at how far his own image has shifted from the original,” Quigley charged. “He’d see his most dedicated followers using his name as justification for saying no to honoring our debts. He’d see his legacy used to play chicken with the world’s greatest economic engine.”

Republicans have continued their ritual praise of Reagan during the debt-limit fight. Rep. Trent Franks (Ariz.) claimed that the budget caps would allow America to be “that great city on a hill that Ronald Reagan spoke of.” Marsha Blackburn (Tenn.) invoked Reagan’s belief that “the closest thing to eternal life on Earth is a federal government program.”Kevin Brady (Tex.) cited Reagan’s line that “the nine most terrifying words in the English language are ‘I’m from the government and I’m here to help.’ ” Both Steve King (Iowa) and Bobby Schilling (Ill.) informed the body that they had granddaughters named Reagan.

But while Reagan nostalgia endures, a number of Republicans have begun to admit the obvious: The Gipper would no longer be welcome on the GOP team. Most recently, Rep. Duncan Hunter Jr. (Calif.) called Reagan a “moderate former liberal . . . who would never be elected today in my opinion.” This spring, Mike Huckabee judged that “Ronald Reagan would have a very difficult, if not impossible time being nominated in this atmosphere,” pointing out that Reagan “raises taxes as governor, he made deals with Democrats, he compromised on things in order to move the ball down the field.”

During the debt-limit debate, a procession of Democrats — Vermont’s Peter Welch, Maryland’s Chris Van Hollen, New York’s Paul Tonko, Texas’s Sheila Jackson Lee and Gene Green — claimed Reagan’s support for their position. Reagan is “revered by many Democrats,” said Welch, who praised Reagan for fighting “the absurd notion that America had an option when it came to paying our bills.”

Half a century after he left the party, the Gipper is winning one for the Democrats.

http://www.washingtonpost.com/opinions/the-new-party-of-reagan/2011/07/19/gIQAuckfOI_story.html

and yes I am posting this mostly to get a rise out of you dod :-P