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Entries in Debt Limit Talks (5)

Sunday
Jul312011

WH Advisor David Plouffe Says No Budget Deal Reached Yet

Comstock/Thinkstock(WASHINGTON) -- White House senior advisor David Plouffe says there is no formal agreement between Congress and the White House on a final budget deal, but that the framework of a viable deal is shaping up as the Aug. 2 debt ceiling deadline nears.

"No, there's no deal," Plouffe told "This Week" anchor Christiane Amanpour on Sunday, before outlining the framework being discussed.

"Both parties agree that there is going to be a first stage deficit reduction - over a trillion dollars," Plouffe said. "There will be a congressional committee established. They're not going to reduce the deficit without tax reform and without entitlement reform."

Plouffe acknowledged that the current framework would not include tax revenue increases in the first stage, but said that would be up to appointed committee members to "get out of their comfort zone" in order to achieve deficit reduction.

"You're going to have to have closing of tax loopholes," Plouffe said. "You're going to have to have revenue produced to close the deficit."

Plouffe added that an enforcement mechanism being debated would apply pressure to the committee to reach long-term deficit reductions, as a combination of budget cuts and tax reforms would automatically be applied if the committee could not come to a consensus later this year.

"We're talking about a variety of options here," Plouffe said. "But the key principle is that the enforcement mechanism will be strong enough to compel both parties."

Copyright 2011 ABC News Radio

Sunday
Jul312011

Republicans and White House Fully Engaged as the Clock Winds Down

ABC News(WASHINGTON) -- With just two days left before Uncle Sam’s credit card maxes out, there were a few signs Saturday afternoon that Republicans and Democrats may be closer to ending the standoff over the nation’s debt ceiling.  The Republican leader in the Senate, Mitch McConnell, expressed confidence that a deal could get done before Tuesday’s deadline.

“I've spoken to both the president and the vice president within the last hour. We're are now fully engaged,” said McConnell.  “I'm confident and optimistic that we're going to get an agreement in the very near future and resolve this crisis.”

House Speaker John Boehner signaled that he too thinks a deal can get done.  “In spite of our differences, I think we're dealing with reasonable, responsible people who want this crisis to end as quickly as possible, and I think we will,” he said.  

President Obama spoke with Boehner Friday night, the same evening that the House passed a $900 billion debt reduction bill that Boehner proposed.

Once the Boehner-backed bill got the Senate, Democrats moved to quickly to kill the bill, so that Senate Majority Leader Harry Reid could introduce his own plan to raise the debt ceiling.

Before the Senate could vote on the Reid bill, the House of Representatives voted Saturday to defeat the substance contained in Senate Majority Leader Harry Reid' s plan.

Before the vote, the Obama administration said it hoped the Reid plan would pass. In a statement, the Obama administration said, "If the bill were presented to the president, his senior advisors would recommend that he sign it."

The Reid plan contains about $2.4 trillion in cuts and would raise the debt ceiling until 2013. Republicans have said one of their main issues with the legislation is that Reid is counting on saving $1 trillion by winding down the Iraq and Afghanistan wars. Republicans describe Reid's math as an "accounting gimmick.”

The Boehner and Reid bills have some similarities.  They both contain budgets cuts greater than the debt ceiling increase amount and both would create a congressional committee to recommend more cuts within a year.

The political brinksmanship comes as the economy sends up distress signals.  The Dow Jones has been down for six days straight, taking with it $183 billion in American’s retirement accounts and new figures show the economy grew a feeble 1.3 percent in the quarter ending  June 30.  

After meeting with President Obama at the White House, Sen. Reid seemed a little frustrated with where the process is.   “The question is: are we closer to an agreement. The answer is no.”

Copyright 2011 ABC News Radio

Thursday
Jul282011

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

Thursday
Jul282011

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

Sunday
Jul242011

Debt Limit Talks: Boehner Plan Expected to Cut $1 Trillion to $2 Trillion

Jupiterimages/Thinkstock(WASHINGTON) -- Congressional leaders met twice Saturday, frantic to make progress on a debt limit deal before Asian markets open, but both sides came away pointing fingers about who is to blame for the continuing deadlock.

The only thing both sides seemed ready to agree on this evening was that allowing the U.S. government to default was not an option.

The Congressional leaders met Saturday evening after attending a meeting at the White House in the morning. President Obama had demanded an afternoon update on the Capitol Hill negotiations.

Republican Speaker John Boehner told the House Republican conference in an afternoon conference call update that he "wants to be able to show signs of progress" by Sunday afternoon, about the time Asian markets are opening half a world away.

The idea is to reassure the world the United States will not drift into default Aug. 2 because of political stalemate in Washington.

But that's exactly what some in Washington see coming down the track.

Boehner's deal, still unannounced, apparently would send Obama the only thing he is flatly promising to veto: a two-stage debt ceiling extension that would raise the ceiling enough to avoid default this summer, but force a second vote during the tumult of the 2012 campaign.

White House press secretary Jay Carney didn't mince words in a midafternoon email about the progress of the negotiations.

"Congress should refrain from playing reckless political games with our economy," Carney said. "Instead, it should be responsible and do its job, avoiding default and cutting the deficit."

Republicans continue to insist that every dollar of new debt must be matched or exceeded by spending cuts. The coming Boehner plan is expected to be $1 trillion to $2 trillion, not the full $2.4 trillion Obama is seeking through 2013.

Copyright 2011 ABC News Radio







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