Entries in Debt (81)


House GOP Fails to Pass Debt Ceiling Plan, May Try Again Friday

Medioimages/Photodisc/Thinkstock(WASHINGTON) -- Republican plans to send a clear message about spending cuts, party unity and frame the continuing debt ceiling debate were dealt a major blow Thursday night when party leaders pulled their debt ceiling legislation from the House floor rather than see it go down to defeat.

The vote was initially expected to occur at 6 p.m. ET, but was postponed late Thursday afternoon and eventually scuttled for the day. The delay suggested Republicans did not have the votes to pass their plan and they were scrambling to pressure wavering Republicans on board.

By nearly 10 p.m. Thursday evening, a whip notice had gone out to all Republican House members.

"Thank you for your patience," the notice read. "We hope to reach a decision soon on the schedule for the rest of night. Members are advised to stay nearby as we still expect to vote later tonight. Please stay tuned to future updates for more accurate timing. I will relay any new information I have as soon as possible. Again -- Thank you for your patience."

Shortly before 10:30 p.m., however, the vote was off. House Republican Whip Kevin McCarthy, R-Calif., announced to gathered reporters on the Hill there will be "no vote tonight."

The vote has been delayed, says a GOP aide, "so leaders can work on changes to achieve a majority of votes."

The bill would have cut $900 billion in spending and raised the $14.3 trillion debt ceiling by about $1 trillion. Democrats have argued that the country should not endure another potentially damaging-to-the-economy debt ceiling vote that soon.

Democrats were happy to talk about Republicans trouble passing the bill. Senate Majority Leader Reid, D-NV., took to the Senate floor and noted that the House of Representatives was having “trouble” conducting their business Thursday evening.

“I apologize to everyone for the late hour,” Reid said, “We've been waiting for the House to conduct their business … as a result of their not sending us the material we needed we are going to have to wait until tomorrow to do our work.”

Copyright 2011 ABC News Radio


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


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


Donors Fighting Debt Crisis with 'Tiny' $2 Million Contribution

VisionsofAmerica/Joe Sohm (WASHINGTON) -- While lawmakers fight over how many trillions of dollars should be cut from the deficit, some Americans are taking debt reduction into their own hands, albeit with far fewer zeros.

So far this year, individuals have donated almost $2 million to a little-known Treasury fund to chip away miniscule pieces of the country’s crushing $14.3 trillion debt. That $2 million is about .0017 percent of the $2.1 billion the United States pays every day just on the interest of that debt.

“It’s a very, very, very, very tiny, tiny amount,” compared to entire amount of the debt, said Mckayla Braden, a spokeswoman for Bureau of Public Debt. “We’re borrowing billions every week. It’s just a tiny bit, a rounding error probably.  But it means a lot to the people who are giving.”

Braden said that while donations most often come in the form of a personal check in a standard envelope, the bureau has received everything from a gold coin to nickels and dimes given by civics class students.

“More so it is just individuals who for some reason really feel they want to give more to their country,” Braden said.

But at an office that recently had to buy new calculators because the debt now has too many zeros for the old ones, even a gold coin seems like pennies.

“When [the debt] went to the trillions, we had to get new calculators because we didn’t have ones that go over 10 trillion,” Braden said.

The debt-reduction fund was established by Congress in 1961 in order to accept a $20-million donation that Susan Vaughan Clayton, a wealthy Texan, left to the federal government in her will. The fund is now managed by the Bureau of Public Debt, a branch of the Treasury Department.

Ultimately, all the donations end up in the Treasury’s general fund out of which almost all government expenditures are paid.

Braden said in the 32 years she has worked for the bureau, she would guess there have been fewer than 100 donations of more than $200,000. She said most people send in checks or cash for about $20 or $30.  The bureau sends a pre-written thank you letter to each donor who supplies a return address.

Some  lawmakers, such as Rep. Timothy Walz, D-Minn., are already pitching in to help lower deficits. When Walz took office in 2007, he decided not to accept a higher salary than his predecessor had, which meant the first-term congressman gave back about $6,600 to the government between January and September 2010 alone.

"It's a token measure, but it's something I can do," Walz told ABC’s Maya Srikrishnan in December.
Copyright 2011 ABC News Radio


Michael Bloomberg: US Default on Debt Obligations a 'Seismic Event'

The City of New York(NEW YORK) -- New York City Mayor Michael Bloomberg believes a U.S. default on its debt obligations would be a "seismic event" that would damage "America's word" and its status as a dependable financial standard.

"I don't think anybody will look ever again at America and the dollar as the reserve currency, where this is the standard by which all other risks are measured," if the U.S. defaults on its debt obligations, Bloomberg told "This Week" anchor Christiane Amanpour. "It's one seismic event that says you can never depend 100 percent on America's word anymore."

Even Bloomberg is willing to see his taxes increase in order to reach a long-term budget agreement.

"I get pretty good value for my taxes... We get a lot for our tax dollars," Bloomberg said. "I don't want to pay any more taxes than is necessary, but I do want the services, and I want us to live within our means. So, if we want more services, we've got to come up with the revenue."

Bloomberg does not think the Bush-era tax cuts for the wealthy should be eliminated right now while the economy is still weak, but does think they should be allowed to expire in the future.

"I think right now is not exactly the right time to let those tax cuts expire," Bloomberg said. "But if you told me six months from now or a year from now, when the economy was better and job creation was better, yes, I don't have a problem with that."

Copyright 2011 ABC News Radio


RNC Raises $19 Million in Second Quarter, Debt Still Looms

Comstock/Thinkstock(WASHINGTON) -- The Republican National Committee raised $19 million in April, May and June, padding its campaign war chest for the 2012 campaign while also paying down more of its multi-million-dollar debt.

The RNC said Monday that as of June 30 it had $7.3 million cash on hand -- and $17.5 million of debt.

The debt figure has loomed over committee operations and the chairmanship of Reince Priebus, who took the helm in January with a pledge to restore the faith of Republican donors.   

After his election, Priebus said his first priority as chairman would be finding a way to pay down what was then the RNC's $25 million debt.

"They're ready to go to work. They want to roll up their sleeves, rebuild the finances of this party and move on to 2012 for a great victory," he said at the time of the GOP’s top contributors.

Since then, Priebus has overseen a 25-percent reduction of the debt -- or $6.7 million -- since the beginning of the year.

“Grassroots and major donors continue to come back to the committee and the chairman’s major donor fundraising has been exceptionally strong through June,” said spokeswoman Kirsten Kukowski.

The committee’s coffers remain an important source of support for Republican candidates across the country, especially the party’s 2012 presidential nominee. But so far they have been outmatched by fundraising totals reported by Democrats.

The Democratic National Committee last week reported raising $34.6 million during the second quarter. President Obama raised $47 million in the same three-month period that ended June 30.   

Copyriht 2011 ABC News Radio


Obama Optimistic about 'Big Deal' to Raise Debt Limit, Cut Deficit

Official White House Photo by Pete Souza(WASHINGTON) -- President Obama said Friday he's still optimistic that a "big deal" between Republicans and Democrats can be reached to increase the country's debt limit while reducing the deficit with a package of tax increases and "modest modifications" to entitlement programs.

"I am still pushing for us to achieve a big deal," Obama told reporters at the White House, while leaders of both parties huddled with their caucuses on Capitol Hill to mull over a path to a deal.

"We are obviously running out of time," Obama said, adding, "If they show me a serious plan, I'm ready to move, even if it requires some tough decisions on my part. Hopefully over the next couple of days we'll see this logjam broken."

Obama's comments came during his second during his second news conference this week on the deficit reduction negotiations, which have been held at the White House for each of the past five days. The parties have spent roughly eight hours together to try to reach a deal, so far to no avail.

While no negotiations will take place Friday, Obama said he instructed both sides to make a decision within the 24 hours on whether to proceed toward a deficit reduction deal linked to a ceiling increase, or whether to resign towards what officials have called the "fallback option" that would simply avoid default.

"We have an opportunity to do something big," he said, "if we're willing to seize the moment."

Negotiators on both sides are reportedly weighing three options for how to proceed to raise the debt ceiling before an Aug. 2 deadline set by the administration.

The so-called "big deal," which Obama favors, would reduce the deficit by $4 trillion over 10 years with cuts to entitlement programs and tax increases. But, this option has seemed to lose traction with both sides at impasse over taxes, and Democrats opposed to entitlement benefits cuts.

A middle-ground deal would trim somewhere between $1.5 and $1.7 trillion in government spending, but impose no entitlement cuts or tax elements. One roadblock with that plan is that Republicans demand that spending cuts at least match the amount of the increase of the debt ceiling, which the president says needs to be $2.4 trillion or so to get to 2013.

The fail-safe option -- conceived by Senate Minority Leader Mitch McConnell, R-Ky. -- would allow the debt ceiling to be raised by the president, with Congress voting disapprovingly three times before the 2012 election. McConnell and Senate Majority Leader Harry Reid are talking about creating an independent deficit commission that would recommend cuts to be voted on in Congress. "It's not the preferred option that we have," White House spokesman Jay Carney said Thursday.

McConnell's plan does, however, provides a light at the end of the tunnel as the Aug. 2 default deadline quickly approaches and financial leaders warn of dire consequences.

Federal Reserve Chairman Ben Bernanke said this week not raising the ceiling would be disastrous. And leading U.S. credit rating agencies have warned the country's bond rating is up for review and possible downgrade. Standard & Poor's warned that there is a 50 percent chance it will downgrade the government's credit rating within three months because of the impasse.

Copyright 2011 ABC News Radio


Mitt Romney Breaks Silence on Debt Ceiling

TIM SLOAN/AFP/Getty Images(PORTSMOUTH, N.H.) -- It didn’t take long for Mitt Romney to field a question on the debt ceiling negotiations Thursday during an event at the Portsmouth Rotary Club in New Hampshire.

After Romney’s opening remarks -- and promising the audience that he wasn’t going to “be the cure to their insomnia” -- he took questions from the audience.

The first one asked what he would do regarding the debt ceiling if he were president.

“The answer for the country is for the president to agree to cut federal spending and cap federal spending and put into place a balanced budget amendment,” said Romney. “That for me is the line in the sand.

“It is within the president’s power to say to the leadership in the House and the Senate that 'I’ll cut spending, I’ll cap the amount of spending, and I’ll pursue a balanced budget amendment.' And if the president were to do that, this whole debt limit problem goes away,” he said.

Copyright 2011 ABC News Radio


Obama's Party Plans on Hold for Debt Resolution

Chip Somodevilla/Getty Images(WASHINGTON) -- August 2 is the date the U.S. risks defaulting on its good faith and credit.  August 4 is President Obama's landmark 50th birthday.

And August 3 is on hold.

It is the night that the Obama 2012 campaign has planned a splashy fundraising celebration in the President’s hometown of Chicago. The ballroom in the famous Allerton Hotel overlooking the city’s Michigan Avenue “Magnificent Mile” is booked for a concert and party. The Chicago Sun-Times, which was the first to report on the event, says Jennifer Hudson may be lined up to perform.

But senior White House officials tell ABC News the party would go forward only if the deficit negotiations and deadline to raise the debt limit ceiling have been resolved. That's likely to be seen as a wise decision, especially considering that for all the talk of lavish spending in a weak economy, some reports say the party is expected to cost celebrants some $35,000 per plate for a chance to sing "Happy Birthday" to the president.

Copyright 2011 ABC News Radio

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