James Pethokoukis

Debt ceiling update: tax increases still a no-go

July 31, 2011

First, the outline of the emerging debt ceiling deal (via Reuters):

1) The emerging deal includes a two-step process to cut the deficit about $2.8 trillion over a decade while increasing the debt ceiling by a similar amount to cover U.S. borrowing beyond the November 2012 election.

Sputter to stall: U.S. economy dips into danger zone for recession

July 29, 2011

More evidence, as if we needed it, that the U.S. economy is in sad shape. America’s gross domestic product grew just 1.3 percent in the second quarter, according to the Commerce Department. And first-quarter growth was revised down to just 0.4 percent. This is now the weakest two-year recovery since World War II.

Boehner I vs. Boehner II vs. Reid

July 28, 2011

Still lots of confusion about the fiscal impact of the various budget plans. This chart from Barclays, looking at just non-war, discretionary spending, helps explain things.

Is Boehner’s job at stake?

July 27, 2011

John Boehner is fighting hard to right Washington’ s finances. But is he also, in effect, fighting to keep his job?

Two cheers for Boehner’s two-step plan

July 26, 2011

Now is not time to let the perfect be the enemy of the good. Neither the Reid budget plan nor the Boehner budget plan packs the fiscal wallop of Cut, Cap and Balance. But significant progress on cutting debt can still be made before the Aug. 2 (or is it Aug. 8 or 10 or …) debt ceiling deadline. And by that measure, the Boehner plan is not only far better than the Reid plan, it is a pretty darn good plan in and of itself. While both plans would cut some $1.2 trillion in discretionary spending over a decade, Reid would then close up shop until 2013. The only other major cuts would be to future defense spending that no one really expects to happen.

The stark difference between Reid’s defense cuts and Ryan’s

July 26, 2011

Here’s the big problem House Republicans have with Sen. Harry Reid’s budget plan: Some $1 trillion of its $2.7 trillion in savings over the next decade — or 37 percent — come from factoring in an expected troop drawdown over the next few years from Iraq and Afghanistan. This is something everyone expects — other than the Congressional Budget Office baseline fiscal forecast. It assumes no drawdown, and it is against CBO’s unlikely scenario that Reid compares his plan.

Why a debt ceiling deal is (probably) going to get done

July 25, 2011

If you believe in a) free enterprise and b) fiscal solvency, would the emerging Harry Reid proposal to raise  the debt ceiling and cut debt be so terrible an outcome? First some general deets:

Obama vs. Boehner: Tax battle again plagues debt ceiling tax

July 23, 2011

First the basics from Reuters:

Here is what’s happening on Friday in negotiations to raise the U.S. government’s $14.3 trillion debt limit by Aug. 2 and avoid a credit default:

A brief chat with Rep. Jim Jordan

July 22, 2011

Any good wrestler will tell you that the key to success is knowing a limited number of moves very well — not trying to mastery every counter or attack in the book. Rep. Jim Jordan, chair of the conservative Republican Study Committee, was a champion college grappler who’s brought that focused approach to the House. I talked with him briefly this afternoon about some of the compromise deals floating around Capitol Hill. For instance, Nancy Pelosi said she’s open to this deal (via Talking Points Memo):

Debt ceiling update: What Wall Street thinks is happening

July 22, 2011

One reason financial markets have been relatively sanguine about the debt ceiling negotiations is that investors have been almost certain that something gets done by August 2. Here is what one bank lobbyist told me today: