Debt Showdown: End Game Approaches Without Clear Solution

Comstock/Thinkstock(WASHINGTON) -- A top House Republican has told ABC News there is a 70 percent chance John Boehner's debt reduction plan will pass in the House of Representatives.  But the vote, which was expected to occur Thursday at 6 p.m., was postponed at the last minute, suggesting Republicans may be lacking votes to pass their plan.

House Democratic leaders say no Democrat will vote for the Boehner bill.

Assuming the Boehner bill passes, the Senate will then move to reject it. At that point, the Senate will take up Sen.  Harry Reid's bill, which has the support of President Obama.  Reid could offer Republicans one last chance to negotiate slight changes.

Republicans say the Reid bill cannot get the 60 votes needed to pass. Republicans are counting on it to fail, forcing the Democrats -- under the threat of default and facing market turmoil -- to once again take up the Boehner bill and pass it as the only way to avoid economic chaos.

As Republicans see it, the Boehner bill will be the last train leaving the station. The Senate must pass it or default.

But Democrats plan to put the Republicans right against the wall using the very same tactic. They will do this by holding the vote on the Reid bill on Sunday or Monday -- at which point it will be too late to go back to the Boehner bill or do anything else.

“At that point,” says one key Democrat, “they will be forced to make a choice: vote for the Reid bill or vote for default.”

Bottom line: both sides are now prepared to use the threat of economic turmoil -- a possible global downturn -- to force the other side to go along with their plan.  And both sides say they are absolutely confident the other side will give in.

Copyright 2011 ABC News Radio


Court Allows Rick Perry to Participate in Prayer Event

Justin Sullivan/Getty Images(HOUSTON) -- A district court in Houston ruled in favor of Gov. Rick Perry Thursday in a lawsuit trying to keep the Texas governor from participating in the Day of Prayer and Fasting event Aug. 6.

Judge Gray Miller dismissed the case after finding the plaintiffs had no standing and cited a 7th circuit ruling in favor of President Obama promoting a “national day of prayer.”

Perry’s spokesman Mark Miner said the governor is pleased with the court’s decision.

“Governor Perry looks forward to participating in a day of prayer for our nation,” Miner told ABC news in an e-mail.

A spokesman for The Response, the official name for the prayer event, lauded the court decision.

"This is a tremendous victory for the First Amendment, and the right of any and all Americans to assemble and pray without interference from forces hostile to faith,” Eric Bearse, spokesman for the Response, said.

The lawsuit against Perry was filed by the Freedom From Religion Foundation, a state/church watchdog group that believes Perry’s involvement in the event violates the Establishment Clause of the First Amendment.  The plaintiffs did not want to stop the rally from occurring but wanted the courts to bar Perry from promoting or participating in the event in any capacity.

Gov. Perry was represented by the Texas Attorney General’s office, which argued Perry’s involvement in the prayer event poses no injury to the plaintiffs and there is no need to file an injunction.

The plaintiff’s attorney said they may appeal the ruling.

Thus far, 8,000 people have signed up for the Aug. 6 event in Reliant Stadium in Houston, Texas.

Copyright 2011 ABC News Radio


Faith Leaders Arrested in US Capitol During Protest

ABC News(WASHINGTON) -- Eleven faith leaders from a range of denominations were arrested in the Capitol Rotunda Thursday as they staged a protest urging Congress to pass a budget agreement.

Led by former Rep. Bob Edgar, D-Penn, and current president of Common Cause, the faith leaders kneeled on the floor of the Capitol Rotunda while praying and singing gospel hymns. Capitol Police evacuated tourists and press from the rotunda before arresting the protesters.

Police handcuffed the protesters with plastic ties and escorted them out of the rotunda.  Among the protesters was Rabbi Arthur Waskow of the Shalom Center in Philadelphia, who was sitting in a wheelchair for most of the protest but lifted out of it upon his arrest.

The faith leaders met with Rep. Rush Holt, D-N.J., and Rep. Chellie Pingree, D-Maine, prior to their protest.

“Talk about debt ceiling is dry and arcane.  What we need to do is make sure people understand that what we’re talking about here is the greatness of America and the prosperity in the broader sense of the American people,” Holt told the group before the protest.  

Copyright 2011 ABC News Radio


Frustration in the Senate

Architect of the Capitol(WASHINGTON) --The action on the debt debate is in the House, where lawmakers are set to vote Friday evening on House Speaker John Boehner’s updated debt ceiling proposal. But even if that proposal can muster the 217 votes, likely all Republican, it’ll need to pass the House.

Boehner’s proposal seems doomed to fail in the Senate, where the Democratic majority leader, Harry Reid, D-Nev., called it "Dead on Arrival."

All 51 Democratic Senators, and two Independents who caucus with the Democrats, showed a united front in a letter sent to the Speaker of the House Wednesday evening that they will vote no to Boehner’s  bill.

In a move to demonstrate the Boehner bill, even if it does pass in the House, will not go farther than that in its present form, the senators say the short-term extension in the bill “would put America at risk.”

“Your approach would force us once again to face the threat of default in five or six short months,” the letter says, “Every day, another expert warns us that your short-term approach could be nearly as disastrous as a default and would lead to a downgrade in our credit rating.  If our credit is downgraded, it would cost us billions of dollars more in interest payments on our existing debt and drive up our deficit.  Even more worrisome, a downgrade would spike interest rates, making everything from mortgages, car loans and credit cards more expensive for families and businesses nationwide.”

At a press conference Thursday, Senate Majority Leader Harry Reid left the door open to perhaps making changes to the Boehner plan and then perhaps bringing that up for a vote. But there is no firm word this is what he would do, should the Boehner plan pass in the House when it is voted on Friday night.

Frustration is rampant in the Senate as the deadline for default ticks closer with each day.

Senator Al Franken, D-Minn., used a snarky visual aide Thursday -- a bold sign that read, “WELCOME TERRORISTS” -- to demonstrate that if a deal is not passed come August 2, federal government employees including counterterrorism agents in the FBI and border agents would not be paid.

Democrat Barbara Mikulski, D-Md., pleaded  for members of Congress to realize the stakes, adding that she could add “even more intense language” than “what the heck is this?”

Republican Senator Isakson, R-Ga., described the impasse with a silly word: “dillydally,” and called next Tuesday the “day of reckoning.”

Senator Webb, D-Va., who fought in Vietnam as an infantry Marine, drew on a story from the Vietnam War to warn the Republicans not to “destroy the American economy in order to save it.”

Senator Coburn, R-Okla., said calmly but sternly, “We’re not listening. We’re not paying attention to the anxiety, fear.”

The debate continues on the Senate floor as negotiations rage behind closed doors on the Hill.

Copyright 2011 ABC News Radio


Deal or No Deal? Officials Will Brief Public on Which Bills Will Be Paid, Which Not, after Markets Close Friday

Stephen Chernin/Getty Images(WASHINGTON) -- If there is no clear path out of the debt mess by Friday, sources say that administration officials will likely brief the public on how the Treasury Department will try to handle the bills Congress mandates that the government pay, given a situation where Congress has not given it a way to do so.

Sources say to expect that briefing no earlier than 4p.m. ET after the markets close on Friday.

Officials are most concerned about paying the interest on the existing debt, since failure to do so would result in default and almost certain immediate market panic, as well as questions about how Treasury would be able to roll over a pre-existing $87 billion in debt that comes due next week.

After that -- a list of priorities including: Social Security checks, Medicare, government workers, Pentagon contractors, troops' salaries, and the FBI to name a few.

Vice President Joe Biden and Senate Minority Leader Mitch McConnell have been talking privately about a possible way forward should Boehner's bill fail in the Senate. The plan being discussed by Biden and McConnell would likely be some compromise between the House Speaker John Boehner's bill that would raise the debt ceiling for six months and Senate Majority Leader Harry Reid's, which would raise it through the beginning of 2013. Their two proposals each seem doomed to fail in the other's chamber.

Boehner would automatically lose at least 80 Tea Party Republicans on a compromise. This means he would need House Democrats to pass it.

But there is also planning underway in case no bill can pass through Capitol Hill.

Copyright 2011 ABC News Radio


14th Amendment Plan Gains Momentum as Debt Clock Ticks

JEWEL SAMAD/AFP/Getty Images(WASHINGTON) -- As fears intensify that Congress will not pass a debt limit increase in time to avoid default, some Democrats are pulling out their pocket Constitutions to find a back-up plan.

Assistant Minority Leader Rep. James Clyburn, R-S.C., said on Wednesday that if a long-term deal is not struck by Aug. 2, President Obama should sign an executive order raising the debt ceiling without Congressional approval.  He said this action would be justified because of a section in the 14th Amendment that states that “the validity of the public debt...shall not be questioned.”

"I am convinced that whatever discussions about the legality of that can continue," Clyburn said.  "But I believe that something like this will bring calm to the American people, and will bring needed stability to our financial markets."

The argument is that a default would put the “validity of the public debt” in jeopardy, thus violating the 14th Amendment.  And since the president took a vow to “preserve, protect and defend the Constitution” it would then be his responsibility to ensure that the country does not default.

But constitutional scholars are divided over whether the amendment would, in fact, justify the president to unilaterally take action on the debt ceiling.

Laurence Tribe, a constitutional scholar at Harvard University and one of President Obama’s former professors, told ABC News earlier this month that the 14th Amendment must be upheld by Congress, not by the president.

“It’s a tempting [argument], but I think it’s fundamentally fallacious because it assumes that the executive branch is the branch of government that has the ability to enforce the 14th Amendment.  Section 5 makes clear it is Congress that has that power,” Tribe said.

Obama seems to agree.  At his University of Maryland town hall on July 22, the president said he does not believe he could use the 14th Amendment to raise the debt ceiling, even if there is no agreement by Aug. 3.

"I have talked to my lawyers," he said.  "They are not persuaded that that is a winning argument."

But both the president and the Treasury Department have stopped short of saying Obama will not invoke the 14th Amendment if worse comes to worst.  The idea is tempting, at least, to the president.

“Believe me, the idea of doing things on my own is very tempting,” Obama said Monday at the annual meeting of the National Council of La Raza.

If the president does decide to use the amendment, House Democratic Caucus Chairman John Larson said on Wednesday that “his caucus is prepared to stand behind him.”

Copyright 2011 ABC News Radio


Senate Unanimously Confirms FBI Director for Two More Years

Chip Somodevilla/Getty Images(WASHINGTON) -- These days there’s nothing the Senate can seem to agree on.

But on Wednesday, there was at least one thing the lawmakers all agreed to: the Senate voted unanimously to extend the term of FBI Director Robert Mueller for another two years, with a vote of 100-0.

President Obama had asked Mueller to stay on past the end of his 10-year term to provide continuity for the White House national security team.  Congress passed legislation earlier this week to allow that extension.

Mueller’s term was set to expire on Aug. 2.

Copyright 2011 ABC News Radio


Rep. Barney Frank: ‘Gender Bias’ Contributed to Warren Downfall

House [dot] gov(WASHINGTON) -- Rep. Barney Frank, D-Mass., blames an unconscious culture of sexism for the failed appointment of Elizabeth Warren to the head of the Consumer Financial Protection Bureau.

“Part of it I have to say was gender bias,” Frank said on the House floor Wednesday.

Warren, a former Harvard professor, was tapped as a White House adviser and helped set up the newly formed CFPB, but she was ultimately passed over by the Obama administration.  Instead, they nominated former Ohio Attorney General Richard Cordray to lead the start-up government agency.

The CFPB is a new federal agency that will put regulators in charge of policing the financial services industry.  It was widely assumed that Warren would not have obtained the necessary 60 votes to overcome a filibuster of her nomination.

Warren was the subject of harsh questioning from Republican members of Congress during her numerous appearances before the House Financial Services Committee when she was working to create CFPB.

But she is also known for asking tough questions herself -- grilling Treasury Secretary Timothy Geithner back in 2009 when she chaired the Congressional Oversight Panel, created by Congress to oversee the Troubled Asset Relief Program (TARP).

Frank did not say who he blames for gender bias -- the White House for not nominating her or Republicans in the Senate for promising to block her nomination.

“Ms. Warren encountered from some people, maybe unconscious on their part, the notion that very strong-willed women with strong opinions might have a place but not in the financial sector,” said Frank.

Jeff Emerson, a spokesman for Republicans on the House Financial Services Committee, pointed out that Warren could easily have been nominated by the White House over Cordray.

“Mr. Frank obviously ignores the fact that President Obama could nominate whomever he wanted for this position and it is President Obama who chose not to nominate Elizabeth Warren,” said Emerson.

Warren will return to Harvard on Aug. 1, according to the Treasury Department, but there has been wide speculation that Warren might run for Senate in Massachusetts.  The consumer advocate is considered to be a potential Democratic challenger to Massachusetts Republican Sen. Scott Brown.

Copyright 2011 ABC News Radio


White House 'Rickrolls' Twitter User over Briefing

NICHOLAS KAMM/AFP/Getty Images(WASHINGTON) -- During the White House briefing on Wednesday, David Wiggs of Franklin, Tennessee, known on Twitter as @wiggsd, tweeted: “This WH correspondence (sic) briefing isn't nearly as entertaining as yesterday's. #TCOT #WHchat”

Oddly enough, the White House responded: “@wiggsd Sorry to hear that. Fiscal policy is important, but can be dry sometimes. Here's something more fun: #WHChat.”

The link is to a video of Rick Astley singing his worldwide number one hit from 1987, “Never Gonna Give You Up.”

This is known in the Internet world as “Rickrolling” someone -- a prank in which you send someone a link they think will be of someone else and instead it’s the Rick Astley video.

Wiggs wrote back to the @WhiteHouse “Love it!” but later tweeted that the “@Drudge should have story ‘6 days from default, both sides scrambling...but Whitehouse rickrolling twitter user.’”

A headline at the Drudge report mentions “6 Days from Default, Both Sides Scrambling.”

Copyright 2011 ABC News Radio


Governor Christie Hospitalized

Governor's Office/Tim Larsen(TRENTON) -- New Jersey Gov. Chris Christie was taken to a hospital Friday and was undergoing testing after suffering breathing problems, his office said.

Christie, 48, was reportedly being driven to a farm Friday morning when he began having difficulty breathing. He was taken to Somerset Medical Center.

"Governor Christie was having difficulty breathing this morning and out of an abundance of caution he went to Somerset Medical Center to be checked out," said Michael Drewniak, press secretary for Christie. "In line with someone dealing with asthma, he is being given routine tests as a precautionary measure. The Governor is extremely grateful for the quality of care he is receiving this morning and has nothing but praise for the world-class doctors, nurses and staff."

Copyright 2011 ABC News Radio

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