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Entries in Deficit (74)

Monday
Jul182011

Senate to Work Until Debt Legislation Sent to the President

United States Senate(WASHINGTON) -- Senate Majority Leader Harry Reid, D-NV., told the Senate on Monday that they will remain in session “continuously” every day until Congress passes legislation that prevents a default.

“The Senate has no more important task than making sure the united states continues to pay our bills and preexisting obligations like social security,” Reid said on the Senate floor, “and because of that, we're going to stay in session every day, including Saturdays and Sundays, until congress passes legislation that prevents the united states from defaulting on our obligations.”

Reid said that Senate Minority Leader McConnell, R-KY, understands the “necessity” of the Senate being in during this time.

With him Monday Reid brought a new sense of urgency on the Senate floor as to what a default would mean if something was not passed before the Aug. 2 deadline for action.

“The federal government would, in effect, go dark,” Reid warned. “Literally every function of government could cease. Social security checks, payments to our veterans. We’ve heard that before. There would be no discussion of which operations and personnel were essential. All the payments would very likely stop.”

Put simply Reid concluded, “default would be a plague that could haunt and would haunt our nation for years to come.”

Reid said the 2008 financial crisis would look like a “quaint little crisis” of what could happen if the nation defaulted come Aug. 2.

“It would be a catastrophe. Secretary Geithner also said we're running out of time to avoid this iceberg, this huge iceberg….is in the ocean and our ship of state is headed toward it.”

Copyright 2011 ABC News Radio

Monday
Jul182011

Frosh GOP: ‘Piggish’ Take on Debt Debate

ABC News(WASHINGTON) -- The August 2 deadline for action on the debt ceiling set by the Treasury Department doesn’t have everyone in Washington worried. Freshman Rep. Todd Rokita, R-Ind., tells ABC News he’s not concerned about the prospect of defaulting on the debt, arguing that the federal government’s cash flow would be sufficient to pay creditors.

He’s equally unconcerned about ratings agencies downgrading the outlook on American debt. Such short-term issues are far less important than the long-term fiscal challenges he and other Republicans are hoping to tackle, Rokita said.

“I don't know anything more piggish -- I don't know anything more un-American than saying, ‘Oh, I'm worried about my own little handout or my own little program or my own little economy and we'll kick this can down the road and let some future generation deal with it,” said Rokita, a former Indiana Secretary of State.

“It’s not what this country was built on. It’s not the attitude that we're supposed to have. I'm not sure where we got it. So no, I'm not as worried about Moody's or anyone else or even if this economy does get worse, when you compare it to what we're doing to our kids or our kids' kids.”

Rokita said he will oppose an increase in the debt limit unless Congress makes structural budgeting changes, including passing a balanced budget amendment to the Constitution -- something that is highly unlikely to be approved in the coming weeks.

He said the concerns around August 2 -- the date Treasury Department officials have warned that the U.S. will risk starting to default on debts -- are overblown.

“Of course it’s an important date. But first of all, I don't take the premise that we're going to default on our obligations,” he said. “We have revenue coming in. We can pay our interest payments. And then we can prioritize what government programs that have been given to the American people that are unsustainable promises that have been made by reckless politicians that can't possibly be sustained. We can determine which one of those if any we need to keep.”

“What we're saying is that, no, we don't deserve to have our credit limit increased. But we'll still have revenue coming in to pay bills,” he added.

Rokita said he’s comfortable voting against a higher debt limit, even if that means the economy will suffer as a result.

“We'll learn to live within our means right now, in the here and now. And this might force that issue even if the economy does or the stock market does go down, the economy might get worse. The economy is terrible it's been terrible for years now, and the reason it's bad is not because of a debt-ceiling vote. The reason it's bad is because we have people who believe that by making government bigger by keeping people on unemployment checks and on welfare we're going to dig us out of this mess.”

Copyright 2011 ABC News Radio

Friday
Jul152011

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

Thursday
Jul142011

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

Thursday
Jul142011

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

Thursday
Jul142011

Debt Limit: Pelosi Praises President's Patience

Official White House photo by Pete Souza(WASHINGTON) -- While the temperament of the negotiations to increase the debt limit has been described as having all the drama of The West Wing, House Minority Leader Nancy Pelosi did her best to lighten the mood at a press conference Thursday, and praised the president for demonstrating "more patience than Job."

On Wednesday, President Obama abruptly ended a nearly two-hour meeting with congressional leaders when House Majority Leader Eric Cantor asked the president whether he would reconsider his veto threat on a short-term solution.

Pelosi on Thursday said she did not see the problem with the abbreviated goodbye.

"I just don't understand what the problem is if the President of the United States has had a meeting for over two hours...stands up and says, see you tomorrow.  That's how meetings with presidents end," Pelosi, D-Calif., said. "You don't leave first; the president leaves first, so that was completely appropriate, unless somebody in the room thought that he or she should have the last word and start the exit from the meeting, but that would be I think a breach of protocol."

Pelosi commended President Obama's leadership during the negotiations and said that "day in and day out, the president has respectfully listened, accommodated, engaged in the conversation in a -- in a very informed way."

"He is the President of the United States.  I know he's busy. I myself am almost too busy to continue listening to some of the things that are going on in that room, so I know he must be very busy," Pelosi joked. "But he has treated everyone there with great dignity."

With negotiations expected to continue through the weekend, there had been some speculation earlier Thursday that the leaders would join the president at Camp David this weekend to continue working towards a compromise, but both House Speaker John Boehner and Pelosi both shot that idea down.

Pelosi also rejected Cantor's suggestion for a short-term solution, saying that "any suggestion that said we're going to end this for a little while, and then we're going to start all over again...I just do not think worthy of the American people."

As for Senate Minority Leader Mitch McConnell's "last choice option" back-up plan, Pelosi applauded McConnell for agreeing that failure to raise the debt ceiling is not an option.

McConnell has suggested leaders could bring a bill giving the president the unilateral authority to ask for $2.5 trillion in debt limit increases between now and 2013.  These requests -- which would require not one penny in spending cuts -- would not need Congressional approval.  Instead, they would be subject to something called a "resolution of disapproval."

Copyright 2011 ABC News Radio

Thursday
Jul142011

Harry Reid: 'Childish' Eric Cantor Shouldn’t Be at Negotiating Table

Win McNamee/Getty Images(WASHINGTON) -- Following a testy exchange at the White House Wednesday night between House Minority Leader Eric Cantor, R-Va.,  and President Obama, Senate Majority Leader Harry Reid, D-Nev., said Thursday that Cantor should not be at the negotiating table as the Congressional leadership continues to work with President Obama to agree to a deal to raise the nation’s $14.3 debt ceiling.

Reid repeated reporting in the morning newspapers showing that some Republicans have had enough of Cantor themselves in this ongoing debate.

“House Majority Leader Eric Cantor has shown he shouldn't be at the table and Republicans agree he shouldn't be at the table,” Reid said on the Senate floor Thursday citing articles with Cantor’s fellow Republicans saying Cantor has been childish in the negotiations. “He has walked out on the meetings with the Vice President of the United States. It was childish. Another Republican said Cantor is putting himself first. He said this -- quote -- ‘he is all about Eric.’”

Negotiations at the White House ended abruptly Wednesday night after an exchange between Cantor and Obama ended with the president shoving back his chair and saying, “I’ll see you tomorrow,” before walking out of the negotiations.

By contrast, Reid praised Speaker Boehner and Minority Leader Mitch McConnell, R-Ky., for both being willing to negotiate in “good faith.”

Reid said with Moody’s warning Wednesday, the nation was already under review for downgrade, that leaders should be seriously concerned, and it’s time now to start listening and get the deal done.  He echoed the President Obama’s dire warning this week that social security checks cannot be guaranteed.

“Social security checks and veterans' benefits and paychecks to our troops would stop. Some of the most vulnerable Americans would be placed at risk. Our promise to the men and women who would protect this nation so bravely and those who protect it today would be broken. We would not be able to make payments to our military. Payments on our national debt would stop.”

McConnell took to the floor Thursday with a “with us or against” us type of argument.

“Either you're with the president and his vision of a government that continues to live beyond its means or you're with those of us who believe Washington needs some strong medicine,” McConnell said. "Either you want to simply borrow and spend our nation into oblivion or you want to get our fiscal house in order.”

McConnell said that Republicans will not be “reduced to being the tax collectors for the Obama economy,” and again pitched for the Balance Budget Amendment -- which all 47 Republican Senators support.

“If the president and Democrats in Congress won't agree to cut back, let's force them,” McConnell said. “Let's pass a constitutional amendment that actually requires congress to live within its means. It's time for the American people to contact lawmakers on the Democratic side and simply demand it. Republicans are unanimous in their support for a balanced budget amendment.”

Congressional leaders are due back at the White House on Thursday for the latest round of debt talks, the fifth meeting in as many days.

Copyright 2011 ABC News Radio

Wednesday
Jul132011

Boehner on Debt Talks with White House: "Like Dealing with Jell-O"

Alex Wong/Getty Images(WASHINGTON) -- In a meeting with a small group of reporters in his Capitol Hill office Wednesday, House Speaker John Boehner, R-Ohio, criticized President Obama and White House officials for their lack of resolve in negotiations.

"Dealing with them the last couple months has been like dealing with Jell-O," Boehner said. "Some days it's firmer than others. Sometimes it’s like they’ve left it out overnight."

Boehner explained that talks broke down over the weekend because, he said, the president backed off entitlement reforms so much from Friday to Saturday, “It was Jell-O; it was damn near liquid.”

“By Saturday, they’d spent the previous day and a half just going backwards” on reforming entitlement programs such as Social Security, Medicare and Medicaid. "The only thing they’ve been firm on is these damn tax increases," the Speaker said.

The Speaker also made it clear that he believes the president waited too long to get personally involved. When he phoned the president Saturday to give him the bad news about talks breaking down, President Obama seemed surprised but not shocked, the speaker said. The phone call lasted 35-40 minutes.

Boehner said that the tax increases the White House has been pushing for as part of what the president calls "a balanced package" cannot make it through Congress. "What the president is asking us to do just won’t pass," he said.

The Ohioan said that he believes the public supports the GOP line in the sand. "The American people want us to hang tough,” he said. White House officials "know they’re not winning," Boehner said.

White House officials of course, dispute this assertion and many others that the speaker made.

One thing Boehner and Obama both agree on: they do not want the U.S. government to default on its debts.

“Nobody wants to go there, because nobody knows what’s going to happen,” Boehner said. “It’s a crapshoot.”

That said, according to both Republicans and Democrats familiar with the negotiating process, the path forward remains unclear.

“We’re in a spot where we need to be,” said a Republican official. "It’s not a bad place for us to be" to get a deal done.

Boehner said that since January he urged him to lock arms with him and "go big" on changes to reduce the deficit. The Speaker said that he will continue to push for major reforms to entitlement spending and the tax code even if those provisions do not end up part of this deal.

Copyright 2011 ABC News Radio

Wednesday
Jul132011

Bachmann on Debt Limit: Obama 'Holding…the Country Hostage'

Win McNamee/Getty Images(WASHINGTON) -- Republican presidential candidate Rep. Michele Bachmann accused President Obama of "holding the full faith and credit" of the country hostage over the debt limit increase, and helped introduce a legislative contingency plan if the country’s top-ranked leaders are unable to reach an agreement to raise the statutory debt ceiling.

"President Obama is holding the full faith and credit of the United States hostage so that he can continue his spending spree," the Minnesota congresswoman said. "We’re saying, 'President Obama, is your spending spree really that important to you that you would put at risk the full faith and credit of the United States? We’re unwilling to do that.'"

Bachmann is co-sponsoring new legislation with GOP Reps. Steve King of Iowa and Louie Gohmert of Texas that would prioritize federal spending in the event that congressional leaders do not strike a deal to increase the debt limit by Aug. 2.

The trio says that the Payment Reliability for our Obligations to Military and Investors to Secure Essential Stability Act, known as the PROMISES Act, would first prioritize the payment of active duty military salaries and, secondly, authorize the Treasury Department to pay principal and interest on debt held by the public.

“What this bill does is it guarantees that we set a priority to pay our debts and bills,” King said, adding that the trio’s priorities would consume about 15.2 percent of revenue. “There’s still a lot of money left over for the president’s discretion to play political games, but let’s not do so with our military and let’s not let our national -- the full faith and credit of the United States go to pot at the expense of political leverage.”

Bachmann was in campaign form on Capitol Hill, reminding reporters that she has been meeting with real Americans from important presidential primary and caucus states that are early on the 2012 calendar.

“The economy is tanking,” Bachmann said. “This is Washington. We’re all in a bubble here. I’m spending my time in Iowa, and South Carolina, and New Hampshire, and where the real world is. The real world is telling all of the politicians, 'Get your act together, stop being political, stop playing with us. We're not pawns in your game.'"

The PROMISES Act also contains a provision that ensures that members of the Armed Forces are paid without interruption in the event that the government faces a funding gap.

Bachmann has consistently downplayed the potential for catastrophe if a deal to increase the debt limit is not reached, and said she intends to vote against authorizing an increase.

Copyright 2011 ABC News Radio

Wednesday
Jul132011

Boehner: Balanced Budget Amendment Sets Spending Restraints in Stone

SAUL LOEB/AFP/Getty Images(WASHINGTON) -- House Speaker John Boehner released a new video blog Wednesday on his website, expressing his support for the balanced budget amendment that the House of Representatives will consider next week.

“We need to get serious about changing the way we spend money here in Washington, and implementing long-term reforms, like the Balanced Budget Amendment, will make sure we never again face a debt crisis like we do today,” Boehner said. “I’m confident the Republicans will strongly support this legislation, in both the House and the Senate. The question is whether enough of our Democratic colleagues will join us to provide the two-thirds [majority] necessary to send the balanced budget amendment to the states.”

The Ohio Republican said that adoption of a balanced budget amendment would help ensure “that spending restraints are set in stone, and the certainty it provides will help create a better environment for job creation across the country.”

“The House bill that we’ll consider would require the government to spend only what it takes in, and would include limitations on our government’s ability to raise taxes and to increase spending,” he added. “I voted for a Balanced Budget Amendment in the past and I'll support it again now. Since our new majority took charge in the House, we’ve been committed to cutting job crushing spending, and changing the way Congress spends taxpayers’ dollars,” Boehner said. “I've been clear with the president that the House will not grant his request for an increase in the national debt limit without spending cuts larger than the debt limit hike and clear restraints on the future spending by our government.”

Copyright 2011 ABC News Radio

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