Lawmakers still far apart on debt agreement
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Updated 10 minutes ago 7/12/2011 6:48:30 PM +00:00 Debt ceiling speaks entering uncharted waters Perry calling GOP leaders in NH, Iowa CSM: Boehner’s no-new-taxes pledge Pawlenty blasts Bachmann’s ‘nonexistent’ record
Congressional leaders were asked to return to the White House for more speaks Tuesday afternoon after a 90-minute Monday session produced no progress other than to identify the size of the gap between Republicans and Obama.
An Aug. 2 deadline looms for Congress to raise the country’s debt limit. Republicans are insisting on major budget cuts to reduce the swollen deficit. Obama and his fellow Democrats are also offering budget cuts but in tandem with tax increases that the Republicans state they will not support.
Video: Scarborough: Can’t transform entitlements ‘with a gun to your head’ (on this page)
Both Democratic and Republican leaders concur the U.S. shouldn’t be granted to default on its obligations, which could skyrocket interest rates, send stock markets plunging and shatter faith in the world’s No. 1 economy.
The showdown comes as Obama and lawmakers head into next year’s presidential and congressional elections.
The top two Republicans in Congress sought Tuesday to put the onus on Obama for failure to resolve a fight over how to increase the government’s borrowing authority. Senate Minority Leader Mitch McConnell stated a deal with Obama is “probably unattainable” and House Speaker John Boehner stated the specter of default is “his problem.”
First Thoughts: Total stalemate
McConnell maintained that White House offers to cut long-term spending amount to “smoke and mirrors” and directly challenged Obama’s leadership. After years of discussions and months of negotiations,” the Republican said, “I have tiny question that as long as this president is in the Oval Office, a real solution is probably unattainable.”
Said Boehner: “This debt limit increase is his problem and I think it’s time for him to lead by putting his plan on the table — something that Congress can pass. Where is the president’s plan? When’s he going to lay his cards on the table?”
McConnell went on to propose a “backup plan” that would grant a divided Congress to raise the U.S. debt ceiling with just one-third of votes.
Such a vote would grant the United States’ borrowing authority to be increased with the support of only Obama’s fellow Democrats.
Obama has been pushing for $4 trillion in a 10-year deficit reduction proposal. But Boehner, after seeking to forge a deal of that magnitude, told the president that a smaller, $2 trillion to $2.4 trillion deal was more realistic. A deal is essential to win Republican votes to increase the nation’s debt ceiling by Aug. 2, or risk a government default.
After another round of speaks Monday, neither side showed any give that might generate hopes for a speedy agreement on the $2 trillion-plus in budget cuts.
Video: What Social Security changes will Democrats consider? (on this page)
Instead, Republicans again took a firm stand against revenue increases, while Obama and his Democratic allies insisted that they be part of any equation that cuts benefit programs for the elderly.
“I do not see a path to a deal if they do not budge, period,” Obama stated at a news conference Monday.
At the same time, the president turned up the pressure by announcing he will not sign any short-term debt limit increases.
Obama’s declaration seemed aimed at pressuring lawmakers to continue to strive for the largest deficit reduction plan possible, even though hopes for a deal mixing a complete overhaul of the tax code with cuts to benefits programs fizzled over the weekend.
At issue is the government’s capability to borrow more to pay existing debt obligations and to run certain day-to-day operations. The U.S. blew past the existing $14.3 trillion borrowing limit on May 16. The Treasury Department has used accounting footwork to keep accounts in the black, but states the government could start defaulting on its obligations if the debt ceiling is not increased by Aug. 2.
Despite lingering hopes for a bigger deal, the goal of the speaks is to produce spending cuts of at least $2.4 trillion or so over the coming decade. Such cuts would not do enough to address deficits that threaten the economy, but they would represent a downpayment on further reductions that would be imposed after next year’s elections.
The group of negotiators includes Obama and other top administration officials and a bipartisan group of the eight top leaders of Congress.
Video: Robinson: ‘Debt deadline is our friend’ (on this page)
With the Aug. 2 deadline approaching, 42 percent of Americans state they see a greater risk to the economy from not raising the debt limit, according to a Washington Post-Pew Research Center poll conducted last week. That’s up 7 points from late May. However, there are still 47 percent of Americans who state they are more concerned about the consequences of raising the debt ceiling.
The business community is also upping the pressure on lawmakers, warning that a failure to increase the nation’s borrowing limit could have an immediate impact on the economy recovery.
“An unprecedented default on the nation’s bills would have dire consequences for our economy, our markets, and Main Street Americans,” stated Thomas Donohue, president of the U.S. Chamber of Commerce.
Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
source : www.msnbc.msn.com
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Submited at Tuesday, July 12th, 2011 at 7:00 pm on Politics by ethan
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