James Pethokoukis

Politics and policy from inside Washington

The roof is on fire! A mid-day debt ceiling update

Jul 14, 2011 17:47 UTC

A brief rundown on what’s happened so far today in the Mother of All Budget Battles,  and what folks are saying about it:

– Obama, lawmakers face fresh doubts on debt deal -Reuters | Key bit in the piece is a warning from JPMorgan CEO Jamie Dimon that a deal needs to get done

– Harry Reid And Mitch McConnell: ‘Hybrid’ Solution To Debt Standoff -HuffPo | Another way of trying to get $1.5 trillion in cuts through Congress.

– Nancy Pelosi, John Boehner reject Camp David – Politico | But it is unclear whether the WH was even going to suggest this.

– Few Americans Fear ‘Economic Catastrophe’ If Debt Ceiling Not Raised: Poll – HuffPo | Just 22 percent, but a lot more bankers and businessmen are extremely worried

– Gang of Six talks heat up as White House debt-limit talks melt down -The Hill |  Can  (now) Big Five pull out a $4 trillion deal? I really doubt it.

Reid slams Cantor – Roll Call | The Majority Leader couldn’t pay enough for great headlines like that one

China urges U.S. to protect creditor by raising debt -NYTimes |  I don’ t think the House GOP are going to be swayed by China’s foreign ministry wants

– S&P: U.S. Debt Could Reach ‘Junk’ Rating by 2030, Absent Entitlement Reform – CNSNews | Actually way before then because there will be a financial crisis if nothing is done.

Mark Dayton offers deal that could end Minnesota shutdown – WaPo | Dem chief exec gives in to GOP legislators. Definitely a must read today on Capitol Hill

Tea party vs. big Business in debt debate — WaPo |  This in an interesting bit:

The problem for McConnell is that the tea party wing of the party isn’t all that interested in giving the GOP nominee the best chance in 2012. It wants cuts, first and foremost, and damn the torpedoes. That’s the attitude the tea party was essentially founded on.

McConnell’s proposal and justifications amount to an acknowledgement that the political endgame has gotten away from the GOP. Whether through any fault of their own or not, Republicans are in a corner when it comes to a default, and as his colleagues suggest, McConnell is ceding major ground.

It’s becoming clear that he can’t please both sides of his party’s new coalition. The question is how it gets resolved, and how deep the wounds will be going forward.

The Great Debt Ceiling Gambit – The Weekly Standard | Tough stuff from Fred Barnes who accuses Obama are pushing a crisis for political gain.

 

 

 

 

COMMENT

Undeniably believe that which you stated. Your favorite justification seemed to be on the web the easiest thing to be aware of. I say to you, I certainly get irked while people think about worries that they plainly don’t know about. You managed to hit the nail upon the top and also defined out the whole thing without having side-effects , people could take a signal. Will likely be back to get more. Thanks

Maybe Cantor should have stormed out instead

Jul 14, 2011 12:44 UTC

Here is how Reuters delicately describes the tense budget meeting:

The U.S. talks on Wednesday lasted nearly two hours and were the stormiest yet. They ended with Obama telling Republicans that “enough’s enough.”

Politico adds a bit more of the flavor:

When Cantor said the two sides were too far apart to get a deal that could pass the House by the Treasury Department’s Aug. 2 deadline — and that he would consider moving a short-term debt-limit increase alongside smaller spending cuts — Obama began to lecture him. “Eric, don’t call my bluff,” the president said, warning Cantor that he would take his case “to the American people.” He told Cantor that no other president — not Ronald Reagan, the president said — would sit through such negotiations. Democratic sources dispute Cantor’s version of Obama’s walk out, but all sides agree that the two had a blow up. The sources described Obama as “impassioned” but said he didn’t exactly storm out of the room.

And here how a GOP aide describes it to me:

Over the last several days the White House has been walking back the savings on the Biden number.  Thursday it was $2 trillion, Monday it was $1.7-1.8 trillion, Tuesday it was $1.6-1.7-1.8 trillion.  This morning our staff met with White House folks and the wrap up from that meeting said that the WH is now at $1.5 trillion.

Given those figures, [Cantor] pointed out that wherever we are-  it’s a long way from the $2.4 trillion needed to meet House GOP goals of dollar for dollar so he suggested a possible short-term goal in order to avoid default.  He then said to the President that since we can only reach so much in savings and you (President) keep moving the goalposts, I will move off my position of only doing one vote in order to avoid default.

And that’s when Obama started to “lecture” the House Republican majority leader. But either way, it sounds to me like  a final deal might be $1.5 trillion in cuts for a debt ceiling extension through the election. In exchange for no tax hikes, Republicans give on their “dollar for dollar” demand. Maybe this even gets somehow combined with the McConnell plan. Good enough to pass the spending-hawk House Republicans? Given the growing Republican perception that they are dealing with a president with no interest in cutting debt — or even one who wants a debt crisis to help him win reelection in a repeat of 2008 — I think  they just might.

 

 

 

COMMENT

It is about time that the President shows some passion. His negotiating tactic has met a recalcitrant Republican, and he needs to change tactics. A little bullying cannot hurt.

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