Entries in Deficit (74)


Obama Pleads His Case for 'Big Deal' at Town Hall

Official White House Photo by Pete Souza(COLLEGE PARK, Md.) -- With the clock ticking toward default, President Obama continued his push to convince Congress and the American people that a “big deal” to reduce the deficit is the best option for the nation’s economy, saying Friday that it will require “shared sacrifice” from both Republicans and Democrats.

Speaking to students, parents, and teachers at the University of Maryland, the president stressed the need for a “balanced” deal that includes spending cuts and revenue increases, a deal that he said will “make everybody somewhat unhappy.”

The president said that he’s “willing to sign a plan that includes tough choices I would not normally make” and that he believes people in both parties are willing to do the same. “The only people we have left to convince are some folks in the House of Representatives.  We're going to keep on working on that because I still believe we can do what you sent us here to do,” Obama said.

“This idea of balance, this idea of shared sacrifice, of a deficit plan that includes tough spending cuts but also includes tax reform that raises more revenue, this isn't just my position, this isn't just the Democratic position, this isn't some wild-eyed Socialist position.  This is a position that's being taken by people of both parties and no party,” he added.

Friday’s event comes one day after news broke that the president and House Speaker John Boehner are attempting to revive a far-reaching deal to reduce the deficit through immediate spending cuts paired with entitlement and tax reforms further down the road.

Facing a revolt from members of his own party outraged at the possibility that the White House would accept a deal that does not include immediate tax increases, Obama on Friday admitted that some of his proposals are not sitting well with his fellow Democrats.

“There are cuts that some people in my own party aren't too happy about, and frankly, I wouldn't make them if money wasn't so tight,” he said.

With the Aug. 2 deadline to default rapidly approaching, Obama was adamant that not raising the nation’s $14.3 trillion debt ceiling is not an option.

“The one thing we can't do -- cannot do -- is decide that we are not going to pay the bill that previous Congresses have already racked up,” he said. “The United States of America doesn't run out without paying the tab.  We pay our bills.”

“This is a rare opportunity for both parties to come together and choose a path where we stop putting so much debt on our credit card, we start paying it down a little bit. And that's what we've been trying to do,” Obama said.

Copyright 2011 ABC News Radio


Obama, Boehner Nearing Budget Deal?

MANDEL NGAN/AFP/Getty Images(WASHINGTON) -- A report that President Obama and House Speaker John Boehner are nearing a major budget deal is incorrect, sources on both sides of the debate tell ABC News.

“It’s wrong,” a White House official who spoke on condition of anonymity told ABC News on Thursday in response to a report by the The New York Times.

Boehner’s office also shot down the Times report, saying, “While we are keeping the lines of communication open, there is no ‘deal’ and no progress to report.”

Copyright 2011 ABC News Radio


Reid: 'Untoward' for House Members to Take the Weekend Off

Office of Sen. Harry Reid(WASHINGTON) -- Senate Majority Leader Harry Reid, D-NV., blasted the House of Representatives on Thursday for taking the “weekend off” when there is still work to be done to find a deal to raise the debt ceiling before the Aug. 2 deadline for action.

“I think it is just untoward -- and that's the kindest word I can say -- for the House of Representatives to be out this weekend,” Reid said on the Senate floor. “I think this is a very bad picture for our country to have the House of Representatives out for this weekend.”

Wednesday night the House Majority Whip told members that the House won't be in session this weekend. Last votes for the week are expected by 3 p.m. Friday with members of the House returning on Monday.

This week Reid announced that the Senate would stay in session everyday -- including weekends -- until Congress sent legislation to the president’s desk. On Saturday the senators will be in and casting votes on the Cut, Cap and Balance Act, which Reid said Thursday, “doesn't have one chance in a million of passing the Senate.”

Reid said that with such little time left it is especially important for the House to be in session this weekend, considering that any revenue bills must originate in the House.

“We are running out of time. Procedurally things can't move very quickly through the Senate,” Reid said. “I fear the closer we get to disaster, the further we get from make the arrangement to stop a default.”

Reid said it is time for House Republicans to show they are serious.

The Senate will spend the next few days debating the Cut, Cap and Balance Act which passed in the House and will likely not pass in the Senate, when the upper chamber votes on Saturday.

Taking to the floor Thursday morning, Senate Minority Leader Mitch McConnell said the debate and vote will give every Senator an “opportunity to go on the record either in support of balancing our books or against it.”

“This is an opportunity for everyone to take a stand,” he said, quipping “Americans have seen what government does with new tax revenue. They waste it on things like turtle tunnels.”

Copyright 2011 ABC News Radio


Gang of Six Senators: Who Are They, Can Their Debt Plan Pass?

ABC News(WASHINGTON) -- A bipartisan posse of senators is attempting a bold end-run around conventional wisdom in Washington. The so-called Gang of Six -- three conservative Republicans, three liberal Democrats -- hopes to prove that members of both parties can defy intransigence, reaching common ground on tax hikes and spending cuts to knock trillions off the national debt.

So who are these men, and do they think their plan has legs?

Sen. Tom Coburn, Oklahoma:
Coburn ditched the Gang in May after months of negotiations turned sour. Now he's back, and pushing its plan. The 63-year-old obstetrician, known on Capitol Hill as "Dr. No" for blocking bills he finds unconstitutional, isn't running for re-election, and he says he's not afraid to take an unpopular stance.

Coburn's prescription is for changes to entitlement programs, that would likely include raising the retirement age for Medicare and Social Security and means-testing benefits, while also changing the tax code to eliminate loopholes and deductions while lowering rates overall.

Coburn said the plan, which changed the dynamic of the debt debate upon release Tuesday," has "real potential right now." But he stopped short of expressing confidence that it would be passed.

Sen. Saxby Chambliss, Georgia: Chambliss, one of the most conservative members of Congress, is no fan of higher taxes. But the 67-year-old says closing tax loopholes and eliminating deductions, which could result in higher taxes for some people, is acceptable as part of the Gang of Six deal.

Their plan calls for changes to the tax code that he says would lower personal and corporate income taxes overall.

Will House Republicans buy it? "I'm at least cautiously optimistic that we've got another idea on the table," he told the Atlanta Journal Constitution.

And of those who might oppose it, he says, they simply "don't want to solve the problem."

Sen. Mike Crapo, Idaho: Crapo, 60, won a perfect rating from the American Conservative Union last year. Like Chambliss, he opposes the tax increases that had been proposed by President Obama and some Democrats to help close the budget gap. The three-term senator says he backs the Gang of Six plan because it would pump more revenue into government coffers without raising tax rates.

"This is going to stimulate our economy, reduce rates and generate a much larger economic pie from which we can apply revenues to debt retirement," he said in an interview Tuesday with Bloomberg News.

Sen. Kent Conrad, North Dakota: Conrad chairs the Senate Budget Committee, and without a re-election campaign on the horizon for the first time in 20 years, he's putting it all on the line. The 63-year-old Democrat is unabashed in his support for changes to federal entitlement programs, such as Medicare and Social Security, so that their solvency can be maintained.

"These ideas that we don't have to make any changes, don't change any entitlement, don't change any revenue program, don't change any spending program, are just wrong," he told CNN Tuesday. "And they are leading our country toward the fiscal cliff and a collapse that would damage everyone."

Earlier this year, Conrad told ABC's Jonathan Karl that he is personally invested in the Gang of Six deal. "I certainly hope this leads to a result because otherwise I'm going to have wasted five years of my life," he said.

Sen. Dick Durbin, Illinois: Durbin, the Senate Minority Whip, is responsible for rounding up Democratic votes for key pieces of legislation. But when it comes to the Gang of Six deficit-reduction plan, Durbin seems to think it's not headed to the floor fast.

"The Gang of Six plan has not been drafted nor has it been scored by the Congressional Budget Office; it's not ready for prime time," he said Tuesday. "But as a concept, I think we have the starting concepts together, and that's what we presented today."

Durbin, 66, suggested that while the gang's framework might not be part of a deal to raise the debt ceiling by Aug. 2, it might still be in play as part of a larger legislative package in the weeks and months ahead.

Sen. Mark Warner, Virginia: Warner, a former governor, admits the timing of the Gang of Six plan's release stinks, coming days before a hard deadline after months and months of work. Little time for input on the bill, and even less to draft precise language.

But, he says, it demonstrates that at least some members of Congress are willing to come together and take risks for the greater good.

"I've taken the arrows from folks in my party -- I'm a Democrat -- but I've taken the arrows. We've got to reform Medicare. We've got to reform Social Security. We've got to make sure that those programs still exist," Warner told ABC's Jonathan Karl.

"If we don't get this fixed, all of us -- all of us -- ought to get fired," he said.

Copyright 2011 ABC News Radio


Carney: White House Would Sign Short-Term Debt Ceiling Extension

Comstock/Thinkstock(WASHINGTON) -- White House press secretary Jay Carney signaled for the first time Wednesday that President Obama would sign a short-term extension of the debt ceiling if it was needed to finalize the details of a larger agreement.

“We would not support a short-term extension absent an agreement to a larger deal,” he said. “That's not acceptable.  Obviously, if both sides agree to something significant, we will support the measures needed to finalize the details of that.”

Republicans have said the amount by which the debt ceiling is raised must be matched dollar for dollar in deficit reduction. The president has said the debt ceiling must be raised to get the federal government to at least 2013, which would necessitate that it be raised by about $2.4 trillion. Right now all sides only agree on approximately $1.5 trillion in deficit reduction over the next decade.

Carney said “if both sides agree to something significant, we will support the measures needed to finalize details.  But there is no extension without an agreement on something big -- a firm, committed agreement on something big...We are not wavering on the president's absolute assertion that he won't sign, you know, a...sort of a tollbooth kind of series of provisions that temporarily or in a limited fashion raise the debt ceiling and we have to relitigate this again and again and again, not just because it's unpleasant -- in fact, not principally because it's unpleasant for everyone involved -- because that's bad for the economy.  It sends the wrong signal to everyone around the globe about Washington's capacity to deal with its fiscal issues.”

After the briefing, Carney just put out a statement to clarify that he mean the White House would accept a short-term extension of only “a few allow a bit of extra time for a bill to work its way through the legislative process.”

Copyright 2011 ABC News Radio


Reid: Senate's Efforts "for Naught" if Plans Can't Pass in House

ABC News(WASHINGTON) -- Throwing cold water again on any momentum any of the plans in the Senate might have right now, Senate Majority Leader Harry Reid, D-NV warned Wednesday that their efforts are “for naught,” if these plans cannot pass in the House of Representatives.

As the clock ticks down to Aug. 2, Reid said they need to work on something that will have the opportunity to pass in both the House and Senate.

“We can have the greatest ideas in the world, but if they're not accepted in the House, we can't extend the debt ceiling, which we have to do,” Reid said on the Senate floor. “So now we await the House of Representatives with our bicameral form of legislature, that's what we must do.”

Reid said they need to hear from the House of Representatives on what their next step will be -- and most importantly, what plan the Republican controlled House will support.

“We have a plan to go forward over here,” Reid said, but noted there are three working plans: the Grand Bargain, the one presented by the so-called Gang of Six, and the McConnell/Reid plan. “But until we hear from the House of Representatives, really our, all of our work here would be for naught. So I await the word from the Speaker.”

It is not clear yet which of these plans would be able to pass in the House of Representatives, if any.

Copyright 2011 ABC News Radio


'Gang of Six' Circulates Support Letter

ABC News(WASHINGTON) -- So-called Gang of Six worked overnight into Wednesday trying to get senators’ signatures on a letter of support for the “basic direction” of their plan released Tuesday, per Senate Majority Leader Reid’s request for the group to give senators 24 hours to review the plan and then get back to him with an indication of support.

It is not clear how many senators have signed on yet -- and the Gang of Six is quickly working to add to its number, in an attempt to make a strong showing to the Senate leadership.

A letter being circulated among the senators and obtained by ABC News says, “It is our strong belief that this plan can not only serve as a template for addressing this crisis, but would allow the Congress to work, and reignite our troubled economy by providing the leadership and certainty the American people expect and deserve from us. The plan strikes the necessary balance between spending cuts, tax and entitlement reform, and enforcement to constrain future spending.”

The letter has not yet been sent to Reid or Senate Republican Leader Mitch McConnell and it’s not clear how much support this letter, and plan, actually has in the Senate.

Copyright 2011 ABC News Radio


Obama: Bipartisan Senators' Plan 'Good News' for Debt Talks

Official White House Photo by Pete Souza(WASHINGTON) -- President Obama says a deficit-reduction proposal unveiled Tuesday by a bipartisan group of seven senators is "good news" in the ongoing showdown over the debt limit, and may signal a path to compromise.

"I think is a very significant step," Obama told reporters in the White House briefing room. "The framework they put forward is broadly consistent with what we've been working on at the White House."

The proposal calls for both cuts to entitlement programs and tax increases, a two-pronged approach the president has advocated as part of a "grand bargain."

The senators' plan calls for a $500 billion down payment on reducing the deficit and moves toward a $3.7 trillion goal. It would increase tax revenues by $1 trillion through closure of a variety of special tax breaks and havens, but would amount to a net tax decrease of $1. 5 trillion because the Alternative Minimum Tax would be repealed.

Seventy-four percent of the deficit reduction would come from spending cuts and 26 percent would come from higher revenues. There would be cuts to Medicare under the plan, which also creates a Congressional committee to overhaul Social Security.

"We've got to have some additional revenue so that we have an approach in which there is shared sacrifice and everybody is giving up something," Obama said.

The president stopped short of a complete endorsement of the plan since, he said, "we just received it." But, he said it offers "the potential for bipartisan consensus."

"We're in the 11th hour and we don't have a lot of time left," Obama said, adding that his team would study the plan and that he would urge congressional leaders to start negotiating based on its framework.

Obama said the McConnell-Reid proposal would continue to be a "fail safe" option to raise the debt ceiling by Aug. 2 in the event that no broader deal can be reached.

Copyright 2011 ABC News Radio


GOP Freshmen Demand Obama's Deficit-Reduction Plan

US House of Representatives(WASHINGTON) -- With President Obama and Congressional leaders mired in behind-the-scenes deficit negotiations, a group of House GOP freshmen came to the White House on Tuesday to publicly express their frustration and demand the president put forth a written plan outlining his proposal to reduce the deficit.

“We are coming down to crunch time. We need your us and show the American people what your plan is,” Rep. Tom Reed, R-N.Y., told reporters, and a few curious tourists, outside the White House Tuesday. “There was no written proposal for $4 trillion, it was all verbal...We need to see from the president, in black and white, what are your cuts, where are your increases in taxes. Let’s put it in writing so there can be no confusion as to where you stand.”

The group of roughly 20 freshmen have sent two letters to the president asking for his written proposal, and on Tuesday accused Obama of all talk and no action. “This president has done nothing but sit around and talk. Press conferences do not result in a plan,” said Rep. Tim Griffin, R-Ark. “We need something that the CBO can score and that we can analyze as a plan.”

Just hours before the House was set to vote on the GOP plan to “Cut, Cap and Balance” spending, the group said Republicans are doing their part. “We’ve offered multiple plans, multiple solutions to the problem and all the president does is play golf and threaten to veto this plan that will get this country back to creating jobs,” Rep. Austin Scott, R-Ga., said.

Responding to White House Press Secretary Jay Carney, who on Monday described the legislation as “Duck, Dodge and Dismantle,” the freshmen said the president’s inaction amounted to “Punt, Pass and Kick.”

With the Aug. 2 deadline to raise the $14.3 trillion debt ceiling rapidly approaching, Rep. Diane Black, R-Tenn., said "it’s time [the president] step up to the table and eat the peas and give us his written plan."

Copyright 2011 ABC News Radio


Debt Ceiling: Present in Just One Other Democratic Country

Stockbyte/Thinkstock(WASHINGTON) -- It’s two weeks and counting until some argue financial apocalypse could descend upon U.S. markets, yet lawmakers are still seemingly eons away from striking a deal to reduce the deficit and raise the debt limit. The ferocity of the debate coupled with the warnings of impending doom begs the question, why does America have a debt ceiling in the first place?

A report released Monday by Moody’s analyst Steven Hess points out that the United States’ debt limit “is an uncommon attribute not shared by most” countries. The U.S. is the only democratic country, besides Denmark, in which Congress has to approve borrowing separately from spending. In most other countries the authority to borrow money is inextricably tied to the authority to spend money.

For example, in Canada the executive branch can borrow as much money approved to spend in the yearly budget.  In Sweden, borrowing is also linked to the budget, although the legislature does not decide how much money the Finance Minister can borrow but instead decides how many programs it can fund.

And in the United Kingdom and New Zealand, the Treasury department has the authority to borrow as much as they need to fund congressionally approved spending.

Only Denmark has a system similar to the United States where the legislature has to approve increases to the debt separately from approving the budget. The Danish set the ceiling high enough so that it never slows the process of borrowing money and they can avoid political conflicts like the one currently gripping the U.S.

Barry Bosworth, a senior fellow at the Brookings Institute, said the U.S. debt ceiling “has no logical basis.”

Congress, through budget and appropriations bills, has sole authority to decide how much the government will spend, so he said “it makes no sense to have a secondary rule to then object to the deficit that emerges from the other decisions.”

The idea behind creating a debt ceiling “was to make Congress slow down its spending, be more careful about what it expended and think more about the obligations it was pursuing,” said former Minnesota Rep. Bill Frenzel, who served as the ranking member of the House Budget Committee and was an advisor to Presidents Bill Clinton and George W. Bush.

The debt limit was established during the lead up to World War II as a way to give the Treasury "freer rein to manage the federal debt as it saw fit,” according to a Congressional Research Service report.

Since 1939 when it was first created, the U.S. has never exceeded the debt limit and gone into default.

Copyright 2011 ABC News Radio

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