D,
Since you have been so busy marketing your book, DO YOU QUANTUMTHINK? and since I have nothing to do :-), I thought I’d bring you up to date on what’s going on in Washington DC surrounding the debt negotiations. By the way, this is going to be a pretty long essay because I am going to edit it for posting on my blog site, so if you just want to skim it, no problem.
First let me give you my perspective on the economic division between the Democrat and Republican Parties. Politically, the US is roughly 20% liberal and 45% conservative, the rest independent.
The Democrat Party’s objective, knowing its numerical ideological disadvantage, is to get as many people as is possible dependent on the federal government through ‘entitlements’ and welfare because half of the country’s population regardless of ideology is the lower middle income and the poor. If the tactic is successful and the Democrats can get 51% of the population on “their side” through the promise of ‘entitlements’, they win elections. Democrats, in effect, are telling those in the lower middle and poor group that the federal government will be their safety net in the event they cannot take care of themselves. Case in point is the CRA, established in 1977 by Pres. Carter, which instructed banks to waive large down payments and income requirements and grant lower interest loans to lower income families to enable them to buy houses. The Republican Party objected and said “let people rent until they have the down payment and income to afford ownership.” Obviously the Democrat position is very attractive to those at the lower end of the income totem pole and why the Democrats continue to push for these people to receive more benefits by increasing taxes on the “wealthy” (Here’s where Republicans accuse Democrats of invoking class warfare). The Republicans position is that giving people ‘too much’ lowers their motivation to work hard to get ahead. The conservatives say rather than feed a man a fish, teach him to how to fish so he can feed himself. Hence the Republican’s unfavorable approval ratings with the labor unions.
When the debate gets into this area, the Democrats bring “the religious right extremists” into the conversation. But that mixes the metaphors because this is about economics, not morality and religion.
The Republican Party’s objective, knowing it has the ideological advantage numerically, is to attract independent voters to get from 45% to the winning 51% of the vote. The GOP tactic is to convince people that the state in which each resides is responsible for their best interests, not the federal government, which according to the GOP’s interpretation of the Constitution is responsible for maintaining a standing army to defend US from enemies, making laws, and administrating the federal budget. Republicans believe the federal government should implement programs that promote pure capitalism because successful businesses will employ more people, who in turn will pay more in income tax revenues that will be used to pay the federal government’s bills. GOP promotes individual responsibility i.e, to quote JFK, “ask not what your country can do for you, but ask what you can do for your country.” To the GOP this equals fewer entitlements and welfare. This is a very fine line to a Republican but not to a Democrat, which takes us back to the economic philosophical division between the two parties.
As I mentioned, I write on a blog site from time to time. It’s called ‘The Man In The Middle...cogito, ergo, sum....’ If you had the time to read some of what I have written over the past two years you’d see that the middle is where I live. I question both sides of an issue and like our Dad, I am not ruled by emotion, I see what’s in front of me. It is what it is, not what I want it to be. Do you remember the chapter from my unpublished book ‘there are no boxes’? When it comes to politics I have no allegiance. My analyses come from the head of a businessman who wrote business plans for thirty four years, the last twenty for my division at Paramount that did $300million annually during my last few years there. Objective analysis was my only option; there was no room for subjectivity or my opinion. My management wanted to know that which was backed up by fact, not what I conjectured. I think you knew that. A final reminder, this essay is solely about economic policy, not social policy.
Below, are listed this morning’s headlines regarding the debt talks from four prominent newspapers: The New York Times, The Washington Times, The Washington Post, The Wall Street Journal. They are listed randomly but I want you to guess the headline that goes with The New York Times.
1-Debt talks collapse between Obama, Boehner
2-Debt Ceiling Talks Collapse as Boehner Walks Out
3-Debt talks break down between Obama, Boehner
4-Grand Bargain Talks Collapse
Answers below, pls scroll down. \/
Answers: 1- Wash. Post- liberal
2- New York Times- liberal
3- Wash. Times- conservative
4- Wall St Journal- conservative
I hope you got the point. The NYT was the only paper to scream out in the headline that “BOEHNER WALKS OUT.” The NYT couldn’t even wait to get into its ‘report’ before proclaiming who is the villain. Why do you suppose?
The reason I point this out is because the NYT is the “paper of record” for the liberal media. Period. This is crucial to understand because the NYT decides what are the ‘important stories’ to be covered by all of the nation’s newspapers, news magazines, radio and television stations. That’s just the way it is and always has been, which is also why 80% of all media outlets are liberal, some of which simply reprint stories from NYT.
Now that you are a published author :-), ask yourself why won’t the NYT ever review a book written by Laura Ingrahm, Bernard Goldberg, Dick Morris, or Bill O’Reilly? Although each author has been #1 on the NYT best seller list, their books have never been reviewed by the Times. Hmmm.
What follows are this morning’s articles from each of the papers for you to read and compare if you wish to spend some time to re-establish your own truth. Rachel Maddow and her ilk on the left, and Sean Hannity and his ilk on the right are at the extremes of political agendas. If that is what you choose to be that’s cool, but those places are as far as one can be from what actually is, and most often the truth is not at the core of their extremes. Their core is to promote at any cost a political agenda. Spinning, re-writing history, deceit, compromising principles, vilification, exaggerating, marginalizing and lying are just some of their commonly used tools. These are places ruled more by emotion than rational thought. For your benefit, I will sift through the articles and write some notes, some of which might expose how low some of these writers, politicians or organizations will go at advance their causes.
Obama: House GOP only obstacle to debt deal
The Washington Times
Updated: 9:33 p.m. on Friday, July 22, 2011
Deficit-reduction talks between congressional Republican leaders and President Obama broke down Friday night, with Speaker John A. Boehner saying he will try to reach a deal with Senate leaders instead of the White House.
“The deal was never reached, and was never really close,” Mr. Boehner wrote in a letter to House lawmakers released at 6 p.m. “In the end we couldn’t connect. Not because of different personalities but because of different visions for our country.”
A visibly frustrated President Obama took to the podium in the White House press briefing room minutes later to reveal that Mr. Boehner had called him to say he was pulling out of the negotiations.
“It’s hard to understand why Speaker Boehner would walk away from this deal,” Mr. Obama said. “This was an extraordinarily fair deal.”
With the government expected to bump up against its debt limit on Aug. 2 if the nation’s borrowing limit is not raised, Mr. Obama said he had summoned the leaders of the House and Senate in both parties to the White House at 11 a.m. Saturday “to explain to me” how the nation would avoid default.
“We have now run out of time,” Mr. Obama said. “The American people are fed up with political posturing.”
The president outlined the framework of the proposal he had offered Republican leaders: $1 trillion in cuts to domestic spending programs over 10 years, $650 billion in cuts to entitlement programs and $1.2 trillion in tax increases through closing loopholes and eliminating deductions.
“If it was unbalanced, it was unbalanced in the direction of not enough revenue,” the president said. “I was willing to take a lot of heat from my party.”
Rep. Chris Van Hollen of Maryland, the senior Democrat on the House Budget Committee, called Mr. Boehner’s decision to leave the talks “stunning.”
“They refused to get serious about cutting spending and making the tough choices that are facing our country on entitlement reform,” he said.
But Mr. Boehner says it was the administration’s insistence on revenue increases that led Republicans to change directions in talks.
Mr. Boehner denied he left the talks, telling reporters during a Friday evening news conference at the Capitol that it was “the president who walked away from his agreement and demanded more money at the last minute.”
The Ohio Republican said he and the president had agreed in principle on $800 billion in new tax revenue to be achieved through a “flatter tax code with lower rates and a broader bas.”
But the talks broke down Thursday, the speaker said, when the president then insisted on another $400 billion in tax increases.
“The White House moved the goalpost,” Mr. Boehner said.
Mr. Boehner added said he wanted more reforms to entitlement programs, such as Medicare and Medicaid, than Mr. Obama was willing to concede.
“We’ve put plan after plan on the table,” Mr. Boehner said. “Never once did the president ever come to the table with a plan. We were always pushing.”
House Majority Leader Eric Cantor, Virginia Republican, said the Democrats were to blame for the impasse because of their insistence on raising taxes.
“We must get Washington’s fiscal house in order, but with millions of Americans out of work, the worst thing Washington can do is to raise taxes on those we need to start hiring again,” Mr. Cantor said.
Senate Minority Leader Mitch McConnell, Kentucky Republican, called the development “disappointing.”
“I appreciate the speaker insisting on reduced spending and opposing the President’s call for higher taxes on American families and job creators,” Mr. McConnell said.
“It is similarly disappointing that the White House has refused to join Republicans in our effort to cut Washington spending now, cap runaway spending in the future and save our entitlement programs and our country from bankruptcy by requiring the nation to balance its budget.
“Speaker Boehner has informed us that he will work on a new path forward with Leader Reid to develop a solution that will prevent default, without job killing tax hikes, while substantially reducing Washington spending.”
The president also complained that Mr. Boehner did not return a phone call from him earlier Friday.
“I’ve been left at the altar a couple of times now,” Mr. Obama said.
Mr. Boehner denied he was trying to spurn the president, saying he still trusts him as a negotiator.
“We have gotten to know each other pretty well over the course of the last six months, and I can tell you that, in all of our conversations, they were respectful,” Mr. Boehner said. “There were frustrations on both sides, but I don’t believe that our relationship is permanently damaged.”
Mr. Boehner said in his letter to colleagues that the negotiations never really came close to bearing fruit because the White House and congressional Republicans have “different views for our country.”
“The Democratic leaders of the House and Senate have not been participants in the conversations I and Leader Cantor have had with the White House ; nor have Republican leaders of the Senate,” Mr. Boehner said.
“But I believe there is a shared commitment on both sides of the aisle to producing legislation that will serve the best interests of our country in the days ahead – legislation that reflects the will of the American people, consistent with the principals of the Cut, Cap & Balance Act that passed the House with bipartisan support this week.”
The speaker said he was still confident that Congress will raise the debt ceiling.
“I want to be entirely clear; no one wants to default on the full faith and credit of the United States government, and I’m convinced that we will not,” Mr. Boehner said.
“We can work together here on Capitol Hill to forge an agreement. And I’m hopeful that the president will work with us on that agreement. “
A short-term deal to raise the debt ceiling is unlikely, as Mr. Boehner said he and the president never discussed such a scenario.
“I’m not really interested in a short-term increase in the debt limit,” he said. “I believe that we have two challenges — that we have to increase the debt limit and we have to deal with our deficit and our debt.”
The president also said he is still confident that Congress will raise the debt ceiling, but added he’s less confident about any deal to reduce deficits.
“One of the questions that the Republican Party’s going to have to ask itself is, can they say yes to anything?” Mr. Obama said. “Can they say ‘yes’ to anything?”
Earlier, President Obama Friday portrayed House Republicans as the only holdouts to a deal that would raise the federal government’s borrowing limit and reduce about $3 trillion in debt with a mix of spending cuts and tax increases.
“The only people we have left to convince are some folks in the House of Representatives,” Mr. Obama told a town hall meeting at the University of Maryland. He said many Republican lawmakers are resisting compromise with a Democratic president because they fear primary challenges from far-right candidates.
“Their instinct of self-preservation is stronger,” the president said. He added that voters in 2010 “chose a divided government, but they didn’t choose a dysfunctional government.”
His comments came 11 days before the administration’s Aug. 2 deadline for Congress to approve an increase in the government’s debt ceiling of $14.29 trillion or face default. As the president spoke, the Senate was rejecting a House Republican bill to cut spending and mandate a balanced budget.
Round-the-clock negotiations with Congress have yet to produce a deal. Mr. Obama has been involved in intense bargaining with Speaker John A. Boehner, Ohio Republican, but House GOP leaders Friday insisted that no deal is imminent.
House Majority Cantor criticized Senate Majority Leader Harry Reid, Nevada Democrat, for failing to put forward a plan to deal with deficits.
“What has the Senate done?” Mr. Cantor asked. “When is Harry Reid going to put forward his ideas?”
Mr. Reid said Friday’s vote on the House bill, which the Senate voted 51-46 to set aside, was a waste of time. The vote broke down strictly along party lines.
“There is simply no more time to waste debating and voting on measures that have no hopes of becoming law,” Mr. Reid said. There is “no more time to waste playing partisan games.”
At the town hall meeting, Mr. Obama maintained that the problem is “not that complicated.”
“For a decade, we have been spending more money than we take in,” said Mr. Obama, whose presidency has seen the public debt climb by more than $3.5 trillion. “The last time the budget was balanced was under a Democratic president, Bill Clinton.”
The mention of Mr. Clinton drew sustained applause from the audience of mostly college students.
Mr. Obama said his insistence on tax increases on wealthier Americans is a reasonable goal.
“I want everybody to have a chance to become a millionaire,” the president said. “This isn’t about punishing wealth. This is about asking people who have benefited the most over the last decade to share in the sacrifice. This isn’t just my position, this isn’t just the Democratic position, this isn’t just some wild-eyed socialist position. This is a position that’s being taken by people of both parties, and [of] no party.”
While the president singled out House Republicans as holdouts in budget talks, he acknowledged that he also needs to win over lawmakers of his own party. Senate Democrats have voiced bitter criticism of proposed cuts to entitlements, and to reports that a deal might defer tax increases on the wealthy.
“I’m willing to sign a plan that includes tough choices I would not normally make, and there are a lot of Democrats and Republicans in Congress who I believe are willing to do the same thing,” Mr. Obama said. “It’s not going to make everybody happy. In fact, it will make everybody somewhat unhappy.”
Grand Bargain Talks Collapse
The Wall Street Journal
BY CAROL E. LEE AND JANET HOOK
WASHINGTON—A high-stakes effort by President Barack Obama and House Speaker John Boehner to hatch a landmark deficit reduction deal collapsed in anger Friday, sending Washington into a weekend of negotiations over how the world's top financial power can make good on its debt obligations.
In a letter to his colleagues, Mr. Boehner said he called off talks with the president. He informed Mr. Obama Friday night he planned to start negotiations with the Senate to seek what would likely be a smaller deal.
"In the end we couldn't connect. Not because of different personalities, but because of different visions for ...
Debt Ceiling Talks Collapse as Boehner Walks Out
The New York Times
At a hastily scheduled news conference, a visibly angry President Obama demanded that Congressional leaders come to the White House on Saturday morning.
By JACKIE CALMES and CARL HULSE
WASHINGTON — Negotiations over a broad deficit reduction plan collapsed in acrimony on Friday after Speaker John A. Boehner suddenly broke off talks with President Obama, raising the risk of an economy-shaking default.
Speaker John A. Boehner said a deal “was never really close.”
The latest turn in the summer’s epic clash between the White House and Congressional Republicans came little more than a week before the government hits its borrowing ceiling, and set off accusations from both sides about who was to blame.
A visibly angry President Obama, in a hastily scheduled White House news conference, demanded that Congressional leaders come to the White House on Saturday morning. “I want them here at 11 a.m. tomorrow,” he said. “They are going to have to explain to me how it is that we are going to avoid default.”
Mr. Obama said Mr. Boehner had stopped returning his calls when it became clear that rank-and-file House Republicans would not agree to raise revenues on wealthy Americans as part of a debt-reduction deal, despite Mr. Obama’s concessions on reducing future spending for Medicare, Medicaid and Social Security. Both sides have sought a deficit-reduction agreement as part of the essential vote to raise the government’s $14.3 trillion debt limit, which will be reached Aug. 2.
In a letter to his Republican colleagues on Friday night, Mr. Boehner said, “A deal was never reached, and was never really close.” He added: “In the end, we couldn’t connect. Not because of different personalities, but because of different visions for our country.”
The speaker said Mr. Obama wanted to raise taxes too high and would not make “fundamental changes” to entitlement benefit programs like Medicare.
But according to a White House official, Mr. Obama had agreed over the coming decade to cut $250 billion from Medicare spending and $310 billion from other domestic entitlement programs, like farm subsidies and education programs. And Mr. Obama was willing to change the formula for Social Security cost-of living adjustments, which many economists say would more accurately reflect inflation, for savings of about $125 billion more.
All of Mr. Obama’s concessions on the benefit programs were contingent, however, on Mr. Boehner and Republicans agreeing to higher taxes for wealthy individuals and corporations.
At the news conference, Mr. Obama said Republicans were forfeiting an “extraordinarily fair deal” to trim the deficit and raise the debt ceiling. “I have gone out of my way to make compromises,” the president added.
“Essentially what we had offered Speaker Boehner was over a trillion dollars in cuts to discretionary spending, both domestic and defense,” Mr. Obama said. “We then offered an additional $650 billion in cuts to entitlement programs Medicare, Medicaid, Social Security. We believed that it was possible to shape those in a way that preserved the integrity of the system, made them available for the next generation and did not affect current beneficiaries in an adverse way.”
Republicans, though, said that the White House pushed for more revenue midway through the talks. “The White House moved the goal posts,” Mr. Boehner said in a news conference.
In his weekly radio address on Saturday, Mr. Obama continued to press the idea that it was “not right to ask middle class families to pay more for college before we ask the biggest corporations to pay their fair share of taxes.”
“This debate boils down to a simple choice,” the president said. We can come together for the good of the country and reach a compromise; we can strengthen our economy and leave for our children a more secure future. Or we can issue insults and demands and ultimatums at each another, withdraw to our partisan corners, and achieve nothing.”
Representative Jeb Hensarling, Republican of Texas, pressed the idea that the deficit and government spending need to come down to help create jobs and bolster the economy.
“If we're going to avoid any type of default and downgrade — if we're going to resume job creation in America _ the president and his allies need to listen to the people and work with Republicans to cut up the credit cards once and for all,” Mr. Hensarling said.
The breakdown in negotiations between Mr. Obama and Mr. Boehner was the second time this month that Mr. Boehner had walked away from the table with Mr. Obama after word of their private talks was leaked to the news media, provoking protests from Republican lawmakers and antitax conservative groups.
“I’ve been left at the altar now a couple of times,” Mr. Obama said. “And I think that one of the questions that the Republican Party is going to have to ask itself is, Can they say yes to anything?”
This time, however, Mr. Obama had also faced a firestorm from within his party, because of the spending cuts he was considering with Mr. Boehner. Hours before the tempest, the three top stewards of the nation’s financial system — Treasury Secretary Timothy F. Geithner; Ben S. Bernanke, chairman of the Federal Reserve, and William C. Dudley, president of the Federal Reserve Bank of New York — had met to discuss how to react to shield the economy from the blow if Congress failed to raise the debt limit. But in a joint statement, they said they remained confident Congress would act.
Mr. Obama, too, said he thought that default could be avoided. “I am less confident at this point that people are willing to step up to the plate and actually deal with the underlying problem of debt and deficits,” he said at his news conference.
Mr. Boehner said he would work now with Senate leaders on a plan to raise the debt limit.
Just what form the new legislative proposal will take was uncertain, as lawmakers and their top aides had only opened talks about how to proceed. Some expected it to be built upon an earlier plan by Senator Mitch McConnell of Kentucky, the Republican leader, who employed an arcane process to allow a debt limit increase to occur over the objections of Congress.
But in a statement, Mr. McConnell noted that the speaker had expressed an interest in trying to find a “new path forward” with Senate Democrats, suggesting that he wanted to go in a different direction than the McConnell plan, which had drawn stiff opposition in the House. It could still provide a last-ditch alternative if all else fails.
Even before the day’s events, deep pessimism had settled over Washington as the two main alternatives to an Obama-Boehner proposal were either defeated or shelved. First, Mr. McConnell shelved the approach he was working on with Senator Harry Reid of Nevada, the Democratic majority leader, amid growing resistance in both parties.
And as expected, the Democratic-controlled Senate voted down a measure that House Republicans approved earlier in the week that would force the government to shrink to the smallest level in many decades. Many House Republicans have said they would not approve an increase in the debt limit without the “cut, cap and balance” package becoming law, too.
Republican officials said the talks between the administration and the speaker had produced consensus on some major issues.
But they said the negotiations were complicated by this week’s release of a separate deficit-cutting plan by a bipartisan Senate group, the so-called Gang of Six, that proposed more tax revenues than agreed upon by Republicans and the White House. The officials, speaking on background, said that this development led Mr. Obama to push for additional revenues as well, and the differences could not be bridged.
Democrats said that, to their chagrin, Mr. Obama pushed for more entitlement savings than even the Gang of Six supported.
Earlier Friday, in a public event at the University of Maryland, in College Park, Mr. Obama for the first time addressed, and ruled out, the idea that in an emergency the Constitution would empower him to raise the debt limit to prevent default and, as he put it, “basically ignore” the federal law requiring that the debt ceiling be set by statute.
The argument of “the constitutional option,” which President Bill Clinton, like Mr. Obama a former constitutional law instructor, endorsed this week, is based on the Fourteenth Amendment’s provision that the validity of the United States debt “shall not be questioned.” “I have talked to my lawyers,” Mr. Obama said, and “they are not persuaded that that is a winning argument.”
But with the Aug. 2 deadline now looming, lawmakers were bracing for the worst in what Senator Mark Pryor called a “cliff-hanger moment.”
“The unthinkable could happen,” said Mr. Pryor, an Arkansas Democrat. “The 80 million bills the federal government pays could come to a screeching halt.
“That means millions of seniors may not receive their Social Security checks in the mail. Troops may not receive paychecks.”
“Americans and leaders all over the world are now watching,” he added. “The question for Congress remains: Will we rise to the occasion, or will we fail?”
Speaker John A. Boehner said a deal “was never really close.”
The latest turn in the summer’s epic clash between the White House and Congressional Republicans came little more than a week before the government hits its borrowing ceiling, and set off accusations from both sides about who was to blame.
A visibly angry President Obama, in a hastily scheduled White House news conference, demanded that Congressional leaders come to the White House on Saturday morning. “I want them here at 11 a.m. tomorrow,” he said. “They are going to have to explain to me how it is that we are going to avoid default.”
Mr. Obama said Mr. Boehner had stopped returning his calls when it became clear that rank-and-file House Republicans would not agree to raise revenues on wealthy Americans as part of a debt-reduction deal, despite Mr. Obama’s concessions on reducing future spending for Medicare, Medicaid and Social Security. Both sides have sought a deficit-reduction agreement as part of the essential vote to raise the government’s $14.3 trillion debt limit, which will be reached Aug. 2.
In a letter to his Republican colleagues on Friday night, Mr. Boehner said, “A deal was never reached, and was never really close.” He added: “In the end, we couldn’t connect. Not because of different personalities, but because of different visions for our country.”
The speaker said Mr. Obama wanted to raise taxes too high and would not make “fundamental changes” to entitlement benefit programs like Medicare.
But according to a White House official, Mr. Obama had agreed over the coming decade to cut $250 billion from Medicare spending and $310 billion from other domestic entitlement programs, like farm subsidies and education programs. And Mr. Obama was willing to change the formula for Social Security cost-of living adjustments, which many economists say would more accurately reflect inflation, for savings of about $125 billion more.
All of Mr. Obama’s concessions on the benefit programs were contingent, however, on Mr. Boehner and Republicans agreeing to higher taxes for wealthy individuals and corporations.
At the news conference, Mr. Obama said Republicans were forfeiting an “extraordinarily fair deal” to trim the deficit and raise the debt ceiling. “I have gone out of my way to make compromises,” the president added.
“Essentially what we had offered Speaker Boehner was over a trillion dollars in cuts to discretionary spending, both domestic and defense,” Mr. Obama said. “We then offered an additional $650 billion in cuts to entitlement programs Medicare, Medicaid, Social Security. We believed that it was possible to shape those in a way that preserved the integrity of the system, made them available for the next generation and did not affect current beneficiaries in an adverse way.”
Republicans, though, said that the White House pushed for more revenue midway through the talks. “The White House moved the goal posts,” Mr. Boehner said in a news conference.
In his weekly radio address on Saturday, Mr. Obama continued to press the idea that it was “not right to ask middle class families to pay more for college before we ask the biggest corporations to pay their fair share of taxes.”
“This debate boils down to a simple choice,” the president said. We can come together for the good of the country and reach a compromise; we can strengthen our economy and leave for our children a more secure future. Or we can issue insults and demands and ultimatums at each another, withdraw to our partisan corners, and achieve nothing.”
Representative Jeb Hensarling, Republican of Texas, pressed the idea that the deficit and government spending need to come down to help create jobs and bolster the economy.
“If we're going to avoid any type of default and downgrade — if we're going to resume job creation in America _ the president and his allies need to listen to the people and work with Republicans to cut up the credit cards once and for all,” Mr. Hensarling said.
The breakdown in negotiations between Mr. Obama and Mr. Boehner was the second time this month that Mr. Boehner had walked away from the table with Mr. Obama after word of their private talks was leaked to the news media, provoking protests from Republican lawmakers and antitax conservative groups.
“I’ve been left at the altar now a couple of times,” Mr. Obama said. “And I think that one of the questions that the Republican Party is going to have to ask itself is, Can they say yes to anything?”
This time, however, Mr. Obama had also faced a firestorm from within his party, because of the spending cuts he was considering with Mr. Boehner.
Debt talks collapse between Obama, Boehner
The Washington Post
By Lori Montgomery and Paul Kane, Published: July 22
House Speaker John A. Boehner on Friday abandoned talks with the White House over a landmark deal to reduce the national debt, throwing into chaos efforts to raise the legal limit on government borrowing just 11 days before the U.S. Treasury is due to run out of cash.
Facing the specter of the government’s first default, President Obama summoned congressional leaders to the White House for an emergency meeting Saturday morning, and Senate leaders rushed to revive a fallback strategy for raising the debt limit before the Aug. 2 deadline.
“We have now run out of time,” a visibly angry Obama said during an impromptu White House news conference held after Boehner (R-Ohio) called to say he was walking out on the talks for the second time in two weeks — again citing differences over taxes. Now, Obama said, “one of the questions that the Republican Party is going to have to ask itself is: Can they say yes to anything?”
Late Friday, a senior GOP aide said House leaders had “no idea” how to craft a plan to raise the $14.3 trillion debt limit that could win approval from the Democratic-controlled Senate and the Republican-led House. Talks were underway between Boehner and Senate leaders, but House Republicans continued to object to a developing Senate strategy to authorize Obama to raise the debt limit through 2013 without explicit congressional approval.
Boehner was clear about the reasons for his decision. The White House, he told reporters at his own news conference, “insisted on raising taxes.”
The collapse of the talks provided a dramatic end to a whirlwind week that began last Friday when Boehner alerted administration officials that he was ready to try again “to do something big” to control the debt, as a GOP aide put it. In the ensuing days, the two sides forged common ground on a two-stage strategy for raising the debt limit and cutting more than $4 trillion out of the federal budget through 2021.
That plan called for unprecedented cuts in agency spending, including at the Pentagon, and significant changes to Medicare and Social Security, the biggest drivers of future borrowing — a major concession for Obama and other Democrats. It also included an overhaul of the tax code that could have lowered personal and corporate income tax rates while reducing an array of popular tax breaks, such as the deduction for home mortgage interest, generating about $1 trillion in extra revenue over the next decade.
The package held the promise of taming the nation’s runaway debt.
The talks broke down, however, as the two sides tried to reach agreement on the magnitude of the tax and entitlement changes and how to force Congress to meet the goals of the plan. Boehner wanted a short-term increase in the debt ceiling that would have forced Congress to cut entitlement programs and rewrite the tax code before the limit could be increased again in February.
The White House rejected that approach and instead suggested a long-term debt-ceiling increase coupled with a trigger that would automatically cut taxes and entitlement spending if Congress did not enact promised changes in the tax code and entitlement programs. Boehner countered that the trigger should include the automatic repeal of key elements of Obama’s health-care reform, such as the requirement that everyone buy health insurance after 2014.
As the two sides tussled over the hardest ideological questions, administration officials said they tried to satisfy Boehner’s demands. But by Friday, the speaker concluded that the philosophical gulf between Republicans and the White House could not be bridged.
Boehner said Obama is “simply not serious” about cuts to Social Security and Medicare, unless they are accompanied by an increase of $1.2 trillion in tax revenue over the next decade — $400 billion more than the level set in a handshake agreement GOP aides said Boehner made with Treasury Secretary Timothy F. Geithner last weekend.
“Dealing with the White House is like dealing with a bowl of jello,” the speaker said. “There was an agreement with the White House for $800 billion in revenue. It was the president who walked away from this agreement.”
White House officials said that there was no handshake agreement on taxes, and acknowledged that they upped their revenue request after the bipartisan Senate “Gang of Six” released a plan to raise $2 trillion in taxes over the next decade. But they said Obama offered Thursday to drop the extra $400 billion if Boehner would accept smaller cuts to entitlement programs.
In the end, Obama told reporters he had offered Boehner “an extra-fair deal” on “the biggest debt-reduction package that we’ve seen in a very long time.” Obama said it would have raised taxes significantly less than the Gang of Six plan, which was endorsed by the third-ranking Republican in the Senate, Lamar Alexander (Tenn.).
Obama said he also put $650 billion in reductions to entitlement programs on the table, along with sharp cuts to government agencies, causing consternation among Democratic lawmakers and forcing him to “take a lot of heat from my party.”
“It is hard to understand why Speaker Boehner would walk away from this kind of deal,” Obama said as he launched into a barely controlled condemnation of “political posturing” and politicians who “dodge their responsibilities.”
House GOP leaders have repeatedly pulled the plug on efforts to forge agreement on a plan to control the national debt, Obama said. Democratic leaders had been willing to consider provisions that would have caused them considerable political pain among the elderly, unions and the party’s liberal base, he added. He also emphasized his willingness to compromise, noting that “I’ve been left at the altar now a couple of times.”
“This is not a situation where somehow this was the usual food fight between Democrats and Republicans. A lot of Democrats stepped up in ways that were not advantageous politically,” Obama said. He noted that he had offered to make further cuts to Medicare, even after Republicans denounced Democrats in last fall’s midterm campaigns for cutting Medicare as part of their overhaul of the health-care system, saying, “We’ve shown ourselves willing to do the tough stuff on an issue that Republicans ran on.”
Until Friday, when Boehner did not respond to several phone calls from the president, Obama said, “my expectation was that Speaker Boehner was going to be willing to go to his caucus and ask them to do the tough thing but the right thing” on raising taxes.
As policymakers braced for another full weekend of urgent meetings, Obama placed just one condition on the path forward, repeating his opposition to a short-term debt-ceiling extension that would force the two sides to replay the same battle in just a few months — an approach some House Republicans are considering. Instead, he insisted on an increase sufficient to pay the bills through the 2012 election — about $2.5 trillion.
Boehner, meanwhile, refused to back away from his demand that any increase in the debt limit be matched with spending cuts dollar for dollar — creating a huge potential obstacle.
That would place the entire political burden on Obama, a burden the president said he is willing to accept. But Senate leaders have identified only about $1.5 trillion in spending cuts to pair with the debt-limit increase — a sum that falls far short of meeting Boehner’s dollar-for-dollar condition.
McConnell and Reid issued statements late Friday expressing their disappointment that talks between Obama and Boehner had collapsed, although both men had long been skeptical of the speaker’s ability to build political support for an ambitious deficit deal made behind closed doors with a president despised by many members of Boehner’s party. As they prepared to head to the White House on Saturday morning, both McConnell and Reid pledged to press forward.
“As I’ve said before, it’s time now for the debate to move out of a room in the White House and onto the House and Senate floors, where we can debate the best approach to reducing the nation’s unsustainable debt,” McConnell said.
The collapse of the talks came after financial markets closed, but could usher in great nervousness next week. Without additional borrowing authority, the Treasury could be unable to send out millions of Social Security checks on Aug. 3 or make a big payment due to investors days later. Obama said he has been discussing contingency plans with Geithner, who met Friday with Federal Reserve Chairman Ben S. Bernanke. The credit rating firm Standard & Poor’s has warned that not reaching a large-scale deal to reduce the debt could lead to an unprecedented downgrade of the nation’s AAA rating, a move that could send interest rates soaring.
Lawmakers have few other options for raising the debt limit. On Friday morning, the Senate defeated, in a party-line vote, a plan trumpeted by House and Senate conservatives that would have placed strict limits on federal spending and linked a debt-limit increase to a constitutional amendment requiring a balanced budget.
Reid declared that the proposal, called Cut, Cap and Balance, was “dead.” He also said he was setting aside a separate fallback plan he had been crafting with McConnell to permit the talks between Boehner and the White House to proceed.
“The path to avert default now runs first to the House of Representatives,” he said, adding later, “The Senate will wait anxiously.”
By lunchtime, however, a sense of foreboding descended on the Capitol as word spread that Boehner had not returned the president’s calls. Reid and McConnell spent Friday afternoon shuttling between each other’s offices, working to revive the plan they had just set aside.
Neither would comment on their talks. But Obama warned that they had better come up with a solution before the collapse of negotiations wreaks havoc on financial markets.
“It’s very important that the leadership understands that Wall Street will be opening on Monday,” he told reporters, “and we better have some answers during the course of the next several days.”
A visibly angry President Obama, in a hastily scheduled White House news conference, demanded that Congressional leaders come to the White House on Saturday morning. “I want them here at 11 a.m. tomorrow,” he said. “They are going to have to explain to me how it is that we are going to avoid default.”
Mr. Obama said Mr. Boehner had stopped returning his calls when it became clear that rank-and-file House Republicans would not agree to raise revenues on wealthy Americans as part of a debt-reduction deal, despite Mr. Obama’s concessions on reducing future spending for Medicare, Medicaid and Social Security. Both sides have sought a deficit-reduction agreement as part of the essential vote to raise the government’s $14.3 trillion debt limit, which will be reached Aug. 2.
In a letter to his Republican colleagues on Friday night, Mr. Boehner said, “A deal was never reached, and was never really close.” He added: “In the end, we couldn’t connect. Not because of different personalities, but because of different visions for our country.”
The speaker said Mr. Obama wanted to raise taxes too high and would not make “fundamental changes” to entitlement benefit programs like Medicare.
But according to a White House official, Mr. Obama had agreed over the coming decade to cut $250 billion from Medicare spending and $310 billion from other domestic entitlement programs, like farm subsidies and education programs. And Mr. Obama was willing to change the formula for Social Security cost-of living adjustments, which many economists say would more accurately reflect inflation, for savings of about $125 billion more.
All of Mr. Obama’s concessions on the benefit programs were contingent, however, on Mr. Boehner and Republicans agreeing to higher taxes for wealthy individuals and corporations.
At the news conference, Mr. Obama said Republicans were forfeiting an “extraordinarily fair deal” to trim the deficit and raise the debt ceiling. “I have gone out of my way to make compromises,” the president added.
“Essentially what we had offered Speaker Boehner was over a trillion dollars in cuts to discretionary spending, both domestic and defense,” Mr. Obama said. “We then offered an additional $650 billion in cuts to entitlement programs Medicare, Medicaid, Social Security. We believed that it was possible to shape those in a way that preserved the integrity of the system, made them available for the next generation and did not affect current beneficiaries in an adverse way.”
Republicans, though, said that the White House pushed for more revenue midway through the talks. “The White House moved the goal posts,” Mr. Boehner said in a news conference.
In his weekly radio address on Saturday, Mr. Obama continued to press the idea that it was “not right to ask middle class families to pay more for college before we ask the biggest corporations to pay their fair share of taxes.”
“This debate boils down to a simple choice,” the president said. We can come together for the good of the country and reach a compromise; we can strengthen our economy and leave for our children a more secure future. Or we can issue insults and demands and ultimatums at each another, withdraw to our partisan corners, and achieve nothing.”
Representative Jeb Hensarling, Republican of Texas, pressed the idea that the deficit and government spending need to come down to help create jobs and bolster the economy.
“If we're going to avoid any type of default and downgrade — if we're going to resume job creation in America _ the president and his allies need to listen to the people and work with Republicans to cut up the credit cards once and for all,” Mr. Hensarling said.
The breakdown in negotiations between Mr. Obama and Mr. Boehner was the second time this month that Mr. Boehner had walked away from the table with Mr. Obama after word of their private talks was leaked to the news media, provoking protests from Republican lawmakers and antitax conservative groups.
“I’ve been left at the altar now a couple of times,” Mr. Obama said. “And I think that one of the questions that the Republican Party is going to have to ask itself is, Can they say yes to anything?”
This time, however, Mr. Obama had also faced a firestorm from within his party, because of the spending cuts he was considering with Mr. Boehner. Hours before the tempest, the three top stewards of the nation’s financial system — Treasury Secretary Timothy F. Geithner; Ben S. Bernanke, chairman of the Federal Reserve, and William C. Dudley, president of the Federal Reserve Bank of New York — had met to discuss how to react to shield the economy from the blow if Congress failed to raise the debt limit. But in a joint statement, they said they remained confident Congress would act.
Mr. Obama, too, said he thought that default could be avoided. “I am less confident at this point that people are willing to step up to the plate and actually deal with the underlying problem of debt and deficits,” he said at his news conference.
Mr. Boehner said he would work now with Senate leaders on a plan to raise the debt limit.
Just what form the new legislative proposal will take was uncertain, as lawmakers and their top aides had only opened talks about how to proceed. Some expected it to be built upon an earlier plan by Senator Mitch McConnell of Kentucky, the Republican leader, who employed an arcane process to allow a debt limit increase to occur over the objections of Congress.
But in a statement, Mr. McConnell noted that the speaker had expressed an interest in trying to find a “new path forward” with Senate Democrats, suggesting that he wanted to go in a different direction than the McConnell plan, which had drawn stiff opposition in the House. It could still provide a last-ditch alternative if all else fails.
Even before the day’s events, deep pessimism had settled over Washington as the two main alternatives to an Obama-Boehner proposal were either defeated or shelved. First, Mr. McConnell shelved the approach he was working on with Senator Harry Reid of Nevada, the Democratic majority leader, amid growing resistance in both parties.
And as expected, the Democratic-controlled Senate voted down a measure that House Republicans approved earlier in the week that would force the government to shrink to the smallest level in many decades. Many House Republicans have said they would not approve an increase in the debt limit without the “cut, cap and balance” package becoming law, too.
Republican officials said the talks between the administration and the speaker had produced consensus on some major issues.
But they said the negotiations were complicated by this week’s release of a separate deficit-cutting plan by a bipartisan Senate group, the so-called Gang of Six, that proposed more tax revenues than agreed upon by Republicans and the White House. The officials, speaking on background, said that this development led Mr. Obama to push for additional revenues as well, and the differences could not be bridged.
Democrats said that, to their chagrin, Mr. Obama pushed for more entitlement savings than even the Gang of Six supported.
Earlier Friday, in a public event at the University of Maryland, in College Park, Mr. Obama for the first time addressed, and ruled out, the idea that in an emergency the Constitution would empower him to raise the debt limit to prevent default and, as he put it, “basically ignore” the federal law requiring that the debt ceiling be set by statute.
The argument of “the constitutional option,” which President Bill Clinton, like Mr. Obama a former constitutional law instructor, endorsed this week, is based on the Fourteenth Amendment’s provision that the validity of the United States debt “shall not be questioned.” “I have talked to my lawyers,” Mr. Obama said, and “they are not persuaded that that is a winning argument.”
But with the Aug. 2 deadline now looming, lawmakers were bracing for the worst in what Senator Mark Pryor called a “cliff-hanger moment.”
“The unthinkable could happen,” said Mr. Pryor, an Arkansas Democrat. “The 80 million bills the federal government pays could come to a screeching halt.
“That means millions of seniors may not receive their Social Security checks in the mail. Troops may not receive paychecks.”
“Americans and leaders all over the world are now watching,” he added. “The question for Congress remains: Will we rise to the occasion, or will we fail?”
Speaker John A. Boehner said a deal “was never really close.”
The latest turn in the summer’s epic clash between the White House and Congressional Republicans came little more than a week before the government hits its borrowing ceiling, and set off accusations from both sides about who was to blame.
A visibly angry President Obama, in a hastily scheduled White House news conference, demanded that Congressional leaders come to the White House on Saturday morning. “I want them here at 11 a.m. tomorrow,” he said. “They are going to have to explain to me how it is that we are going to avoid default.”
Mr. Obama said Mr. Boehner had stopped returning his calls when it became clear that rank-and-file House Republicans would not agree to raise revenues on wealthy Americans as part of a debt-reduction deal, despite Mr. Obama’s concessions on reducing future spending for Medicare, Medicaid and Social Security. Both sides have sought a deficit-reduction agreement as part of the essential vote to raise the government’s $14.3 trillion debt limit, which will be reached Aug. 2.
In a letter to his Republican colleagues on Friday night, Mr. Boehner said, “A deal was never reached, and was never really close.” He added: “In the end, we couldn’t connect. Not because of different personalities, but because of different visions for our country.”
The speaker said Mr. Obama wanted to raise taxes too high and would not make “fundamental changes” to entitlement benefit programs like Medicare.
But according to a White House official, Mr. Obama had agreed over the coming decade to cut $250 billion from Medicare spending and $310 billion from other domestic entitlement programs, like farm subsidies and education programs. And Mr. Obama was willing to change the formula for Social Security cost-of living adjustments, which many economists say would more accurately reflect inflation, for savings of about $125 billion more.
All of Mr. Obama’s concessions on the benefit programs were contingent, however, on Mr. Boehner and Republicans agreeing to higher taxes for wealthy individuals and corporations.
At the news conference, Mr. Obama said Republicans were forfeiting an “extraordinarily fair deal” to trim the deficit and raise the debt ceiling. “I have gone out of my way to make compromises,” the president added.
“Essentially what we had offered Speaker Boehner was over a trillion dollars in cuts to discretionary spending, both domestic and defense,” Mr. Obama said. “We then offered an additional $650 billion in cuts to entitlement programs Medicare, Medicaid, Social Security. We believed that it was possible to shape those in a way that preserved the integrity of the system, made them available for the next generation and did not affect current beneficiaries in an adverse way.”
Republicans, though, said that the White House pushed for more revenue midway through the talks. “The White House moved the goal posts,” Mr. Boehner said in a news conference.
In his weekly radio address on Saturday, Mr. Obama continued to press the idea that it was “not right to ask middle class families to pay more for college before we ask the biggest corporations to pay their fair share of taxes.”
“This debate boils down to a simple choice,” the president said. We can come together for the good of the country and reach a compromise; we can strengthen our economy and leave for our children a more secure future. Or we can issue insults and demands and ultimatums at each another, withdraw to our partisan corners, and achieve nothing.”
Representative Jeb Hensarling, Republican of Texas, pressed the idea that the deficit and government spending need to come down to help create jobs and bolster the economy.
“If we're going to avoid any type of default and downgrade — if we're going to resume job creation in America _ the president and his allies need to listen to the people and work with Republicans to cut up the credit cards once and for all,” Mr. Hensarling said.
The breakdown in negotiations between Mr. Obama and Mr. Boehner was the second time this month that Mr. Boehner had walked away from the table with Mr. Obama after word of their private talks was leaked to the news media, provoking protests from Republican lawmakers and antitax conservative groups.
“I’ve been left at the altar now a couple of times,” Mr. Obama said. “And I think that one of the questions that the Republican Party is going to have to ask itself is, Can they say yes to anything?”
This time, however, Mr. Obama had also faced a firestorm from within his party, because of the spending cuts he was considering with Mr. Boehner.
