Entries in Federal Debt (39)


Marco Rubio Warns of ‘Daily’ Debt Ceiling Crisis

Joe Raedle/Getty Images(WASHINGTON) -- Congress won’t have to vote again on raising the debt ceiling until next year, but Sen. Marco Rubio, R-Fla., warned Thursday that the country is dealing with a “debt ceiling crisis on a daily basis” and suggested that Treasury Secretary Timothy Geithner’s claim that a debt ceiling crisis does not currently exist is itself a problem.

Republicans on Capitol Hill and President Obama reached an agreement last year to raise the ceiling, and won’t have to fight that legislative battle again until after the November election.

But Rubio, a favorite of the Tea Party who is often mentioned as a potential running mate for Mitt Romney, said the nation should view the debt more immediately -- and every day.

“We are having a debt ceiling crisis on a daily basis, and here’s why,” Rubio said on Fox.  ”Because this government every year is spending $1.5 trillion more than it takes in.”

“When is the United States federal government and when is this president going to begin to seriously address the fact that this is a government that spends $1.5 trillion a year more than it takes in?  That has to be dealt with.  That is not going to solve itself.  It’s not going to go away on its own.  And every year that goes by that it remains unresolved, the harder it becomes to solve,” he said.

But how to solve the problems is controversial to say the least.  Obama pledged after a meeting Wednesday to protect entitlement spending.  House Speaker John Boehner has said any rise in the debt ceiling must be off-set by a greater number of spending cuts.

Most Republicans have pledged not to raise taxes.  But some Democrats on Capitol Hill have targeted people like Facebook co-founder Eduardo Saverin, who renounced his U.S. citizenship to avoid paying taxes on the money he will make from Facebook’s initial public offering.

Rubio said he wasn’t going to celebrate Saverin’s decision, but he added that high tax rates also lead companies to move business out of the U.S., suggesting he would oppose any law directed at Saverin and people like him.

“I’m not going to celebrate what he’s done or the decision that he’s made.  We were elected to deal with the big issues, not one guy, and the bigger issue here is that the U.S. is becoming a less and less friendly place for some people to do business,” Rubio said.  “People are looking to move their companies and their assets overseas because of that.  So, I think that’s really the issue we should focus on more.  I’m not excusing what he’s done.  I’m not celebrating it.  I’m not telling you I’m happy about what I’ve read with regard to this one person and the decision that he’s made.”

Copyright 2012 ABC News Radio


Boehner Presses Obama for Presidential Plan to Avert Fiscal Crisis

MANDEL NGAN/AFP/Getty Images(WASHINGTON) -- As congressional leaders prepare to meet with President Obama at the White House on Wednesday, House Speaker John Boehner said he will urge the president to put forward his own ideas to deal with a range of economic obstacles staring down lawmakers later this year.

“It’s time for us to deal with the big issues that are affecting our country and our society,” Boehner, R-Ohio, said at a news conference Wednesday morning on Capitol Hill.  “We’ve spent enough time playing small ball.”

Closed-door negotiations to reach a “grand bargain” between Obama and Boehner to deal with the debt and the deficit failed last year, but the problems have not gone away.  Congress is expected to raise the debt ceiling sometime after the November election.

Boehner, House Minority Leader Nancy Pelosi, Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell will all join Obama for a meeting in the president’s private dining room on Wednesday to discuss their legislative priorities.

The speaker told reporters that he will push the president to present his own alternatives to extend the current tax rates, replace the defense sequester and rein in the country’s debt.

“Where is the president’s plan to tackle our looming debt crisis?” Boehner asked.  “Where’s the president’s plan to stop the largest tax increase in American history from occurring on Jan. 1?  Where is the president’s plan to replace these indiscriminate cuts to our military, which will devastate their ability to keep America secure?”

Despite ratcheting up the rhetoric that’s critical of the president over the past month, such as complaining that Obama has diminished the office of the presidency, the speaker said he expects a productive conversation with the president.

“It’s not a personal issue.  The president and I, as you well know, we get along fine,” he said.  “But he has issues with what I believe and frankly I’ve had some issues about what he believes in.”

Boehner said that the debt crisis “is standing in the way of a lot of employers hiring new people” because “no one knows what the tax rates are going to be in January,” when numerous provisions are set to expire.

“[The tax code] causes business people and investors to sit on their hands because the picture is uncertain, and then when it comes to what’s going to happen to our military with these cuts in January, you can imagine that there are a lot of people concerned,” the speaker said.  “The defense secretary has made clear that these cuts will devastate our ability to keep our country safe.  The White House has admitted that these cuts will have a devastating impact on our military, so where is their plan?  It’s as simple as that.”

Copyright 2012 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


CBO Score: Senate Plan Cuts Deficits by $2.2 Trillion over Next 10 Years

Reid [dot] Senate [dot] gov(WASHINGTON) -- One day after the non-partisan Congressional Budget Office scored the Boehner plan, finding it short on cuts, the CBO on Wednesday morning released a more favorable score for Senate Majority Leader Harry Reid’s debt ceiling plan.

CBO, the nonpartisan budget accounting arm of Congress, estimates that Reid's legislation would reduce budget deficits by about $2.2 trillion over the next 10 years.  The score could perhaps breathe new momentum into to the Senate plan.

Reid’s plan would raise the debt ceiling by $2.7 trillion -- past the next presidential election and into 2013.  The competing proposal from Boehner is a two-step plan that would require another debt ceiling vote in about six months.

But don't look for Republicans to flock to Reid's proposal.  They have complained that nearly half the cuts in Reid's proposal are not actually cuts: $1 trillion comes from the “winding down” of the wars in Iraq and Afghanistan.  Republicans have said this is a disingenuous way of counting money that would not have been spent anyway since the wars are already winding down. Boehner had called such accounting maneuvers in Reid's plan "gimmicks."

Discretionary spending cuts in Reid's proposal would result in $840 billion in lower authorized spending, the CBO report said Wednesday morning, and $750 billion in actual lower outlays in the next 10 years.

Speaker of the House Boehner’s plan, scored Tuesday by the CBO, found $850 billion in savings -- less than the Speaker had anticipated.  Boehner has delayed a House vote originally scheduled for Wednesday in order to find more savings, and rally more votes in the House for the plan.

The Senate plan is not scheduled for a vote yet.

Copyright 2011 ABC News Radio


Debt Debate Shades Indiana Sen. Lugar’s Fight for Reelection

Lugar [dot] Senate [dot] gov(WASHINGTON) -- Ending the debt ceiling stalemate in Washington will require some bipartisanship.  Neither side has the votes to pass their plan without help from the other party before an Aug. 2 deadline. But it has become politically perilous to work across the aisle. Just ask Indiana Republican Sen. Richard Lugar, who is the longest-serving federal lawmaker in Indiana history, and who is in the fight of his political life.

In Indiana, state treasurer Richard Mourdock, who’s hoping to unseat 35-year incumbent Lugar, is hoping to use the gridlock to his advantage.

Mourdock is zeroing in on Lugar’s relationship with President Obama, which Mourdock calls “a burr in the saddle of every Republican paying attention.”  Mourdock is also accusing Lugar of not acting quickly enough to back the conservative cut, cap and balance proposal that passed the House, but failed in the Senate last week.

“I was stunned that he was the last of the Republican Senators to get on board with the cut, cap and balance,” Mourdock told ABC News.  “The day before it went to Harry Reid, Lugar suddenly said, ‘Yeah, me too’ and jumped on to co-sponsor.”

Mourdock added that Lugar has voted to raise the debt ceiling in the past, something the Tea Party-supported candidate hopes will work to his advantage with conservatives.  He says that on the campaign trail he constantly meets voters who say they respect the 79-year-old-Senator, but that “it’s time” for a change.

The Lugar camp says it’s just not true that the Senator was late to sign on to cut, cap and balance, and that Lugar has been involved throughout the year on spending issues.  Lugar’s spokesperson for his Senate office, Andy Fisher, stressed that the Senator didn’t just back the bill but added his name to the list of co-sponsors.

“That’s a full endorsement,” Fisher told ABC News.

Fisher added that Lugar is co-sponsoring Sen. Pat Toomey’s “Full Faith and Credit Act,” which will ensure payments are made to Social Security recipients, the military, and interest on the national debt if the government does go into default.

Brian Howey, author of Howey Politics Indiana, says until the outcome of the debt ceiling deal is known,  it’s too early to know how the debate could affect this campaign.

Copyright 2011 ABC News Radio


Can GOP Leaders Get Their Members to Agree on Debt Plan?

SAUL LOEB/AFP/Getty Images(WASHINGTON) -- House Speaker John Boehner was forced to take his debt plan back to the drawing board Tuesday night, after a government estimate found that it did not cut as much as Boehner originally proposed.

Boehner directed his staff to find $1.2 trillion in spending cuts, an amount that would exceed the increase in the debt limit under his plan.

“Congressional staff are looking at options to adjust the legislation to meet our pledge,” the House Speaker said Tuesday night.  “This is what can happen when you have an actual plan and submit it for independent review -- which the Democrats who run Washington have refused to do.”

Finding more to cut is the easy part, but finding the votes to pass the plan is a lot harder.  

Democrats claim to have counted 18 Republican “no” votes based on public statements, and a Republican vote counter tells ABC News’ Jonathan Karl that there are at least 30 House Republicans who are either firmly “no” or leading that way.

Karl adds that the biggest challenge for Boehner is not just that his plan fell short when its numbers were crunched by the non-partisan Congressional Budget Office. (The CBO's estimate was that his plan would only amount to $850 billion in cuts, instead of more than a trillion as advertised.) Karl says the bigger problem is that the cuts for next year are only $7 billion compared to the 2011 budget.  And there's one other thing: Conservatives fear that the deficit reduction committee created by the Boehner bill could come back with a plan that includes tax increases.

Even if Boehner can find the votes to get his plan out of the House, Senate Majority Leader Harry Reid, D-Nev., said on Tuesday that the plan is “dead on arrival” in the Senate.

“Speaker Boehner's plan is not a compromise,” Reid said. “It was written for the tea party, not the American people.”

Copyright 2011 ABC News Radio


Democratic Officials: Still No Debt Deal, Not Even Close

Jupiterimages/Thinkstock(WASHINGTON) -- Democratic officials familiar with the ongoing debt talks said on Thursday night that they do not have a deal to reduce the deficit, and aren't even on the cusp of an agreement.

President Obama continues to push for the biggest deal possible and believes there is still time to reach an agreement to raise the debt ceiling and reduce the deficit before the Aug. 2 default deadline, but the difficulties remain the same.

According to officials, the president hopes for a balanced deal that includes deficit reduction, entitlement reforms and revenue increases.  Any deal would have immediate cuts to discretionary spending, paired with a commitment to make entitlement cuts and enact tax reforms.

However, Democratic officials said that major disagreements persist over both entitlement and tax reforms.

Some of the big issues left to tackle include the scope of the changes and how to enact mechanisms that ensure a deal is balanced.  For instance, negotiators must determine how much to raise revenue through tax reform and how to make sure Congress follows through with entitlement cuts.

While both sides will have to compromise, this deal may cause more turmoil for Democrats who expressed outrage Thursday at the possibility that Obama would accept a deal that does not include immediate tax increases.

Copyright 2011 ABC News Radio


Sen. Warner Will Support 'Any Deal' to Raise Debt Ceiling

United States Senate(WASHINGTON) -- As one more sign of what the debt ceiling negotiations have come to, Sen. Mark Warner, D-Va., said on Thursday that he would support “any plan” as long as it raised the debt ceiling, at this point.

“I’m going to support any deal that actually gets us to the debt ceiling, that’s the most important thing,” Warner said on a conference call Thursday evening.  “I’m going to vote for virtually anything that extends the debt ceiling.  I’d even vote for a clean debt ceiling extension.  Because I don’t think we should be playing, you know, Russian roulette with our country and, indirectly, the world’s economy.”

The senator, a member of the "Gang of Six," was briefing citizens on a conference call hosted by the group “No Labels” to update the public on the Gang's progress and the work they might do even after a debt deal is reached.

Warner said that everything with the debt talks is changing in “real time” and that the viability of the Mitch McConnell-Harry Reid plan to give President Obama power to raise the debt ceiling was on tap to be discussed at the White House discussion Thursday night.

The Gang of Six continues to work on its plan to reduce the deficit by $3.7 trillion over 10 years, even as other aspects of the debt ceiling negotiations rage on.

Warner expressed regret that the group was not able to get its proposal out months ago so that the group's members could have earlier answered all the questions and challenges the group is facing after its proposal was unveiled Tuesday, rather than trying to answer them at the 11th hour of the debt talks.

He echoed the sentiment on the Hill that the Gang of Six’s plan could influence the debt talks, but that the proposal is best left for consideration after the debt ceiling is raised.

“We never thought of our deal as a debt ceiling-related issue,” Warner said.  “We always thought of it as a longer-term process of action.”

Copyright 2011 ABC News Radio


Don't Count on 'Gang of 6' Breakthrough for Debt Ceiling

Stephen Chernin/Getty Images(WASHINGTON) -- Could the bipartisan “Gang of Six” plan embraced by President Obama on Tuesday be a real breakthrough on the debt ceiling issue?

Don’t count on it.

On the bright side, the bi-partisan “Gang” presented their ambitious $3.7 trillion deficit reduction plan to a bi-partisan group of some 50 senators and got a positive reception from both parties.

Sen. Joe Manchin, D-WV, even declared, “We went from a Gang of Six to a Mob of 50.”

But the plan has already drawn fire from the right and the left.

Sen. Jim DeMint, R-SC, says he has “serious concerns,” and Sen. Jeff Sessions, R-AL, says the plan hikes taxes “by at least $1 trillion.”

In a paper statement, Sen. Bernie Sanders, I-Vt, said, “This is an approach that should be rejected by the American people.  At a time when the rich are becoming richer and corporate profits are soaring, at least half of any deficit-reduction package must come from upper income people and profitable corporations.”

Sanders says the plan would cause “devastating cuts to Social Security and Medicare and Medicaid.”

But the coldest splash came from Senate Majority Leader Harry Reid.

“I don't want to do anything to jeopardize the enthusiasm people have for the Gang of Six,” Reid told reporters after the Gang presented its plan, “but I am the person that runs the Senate and I understand what the rules of the Senate are.”

The opposition to the plan revolves around the same problem that's been stalling progress on the debt ceiling front: Democrats don’t want to sign on to deep spending cuts and Republicans fear that the plan will lead to big tax increases.

But there’s another problem.  The Gang of Six proposal leaves the specifics up to Congressional committees to hammer out in the future.  The principles are outlined, the targets are set, but the details are to be determined at a later date and other than a “down payment” of $500 billion in spending cuts, there’s no guarantee Congress will actually act on the bigger spending cuts and revenue increases the plan promises.

Copyright 2011 ABC News Radio

ABC News Radio