Y’all don’t pass somethin’ soon none-a-yuz gonna be in office next year.
I am beginning to understand how major catastrophes strike. Slowly.
House to Vote on $2.4 Trillion Debt Increase, Spending Cuts
July 15 (Bloomberg) — House Republicans will vote next week on legislation to limit spending and tie a $2.4 trillion increase in the U.S. debt ceiling to a constitutional amendment to balance the budget, a plan President Barack Obama dismissed as not “serious.”
While the measure may win acceptance by the Republican-led House, it can’t pass the Democratic-controlled Senate, said Representative Steny Hoyer of Maryland, the House’s No. 2 Democrat. It will let Republicans put their stance on the record while offering no immediate resolution to talks in Washington aimed at reaching a deficit-cutting deal by an Aug. 2 deadline for raising the $14.3 trillion debt ceiling.
“You’ll probably see the House vote on a couple of things just to make political statements,” Obama said at a White House news conference today. The Republican plan, which would mandate spending cuts of at least $2.4 trillion without increasing tax revenue, “doesn’t seem like a serious plan to me,” the president said.
A constitutional amendment requires a two-thirds vote of both House and Senate, and then ratification by two-thirds of the 50 states. “We don’t need a constitutional amendment to” revamp the government’s finances, Obama said. “What we need to do is do our jobs.”
Republican Representatives Sean Duffy, of Wisconsin, and Billy Long, of Missouri, described the plan for next week’s House vote as they emerged from a party caucus meeting at the Capitol.
“For us, we’re effective in the sense that we say, ‘OK, we’re going to do the responsible thing by raising the debt ceiling,’ but also in the long term, we get our deficit and debt under control,” Duffy said.
Republicans have proposed a balanced-budget amendment that would eventually cap spending at 18 percent of gross domestic product and require two-thirds majorities in the House and Senate to exceed that or to raise taxes.
The plan, offered as Obama and congressional leaders have been meeting to search for a compromise that would cut the deficit and let the government sell debt after Aug. 2, would appear to bring the matter no closer to a resolution.
Obama held his news conference to continue to push for a combination of spending cuts and revenue increases.
“The American people are sold” on the idea of balancing spending cuts with tax increases,” Obama said. “The problem is members of Congress are dug in ideologically.”
No Tax Increase
On the Republican side, House Speaker John Boehner of Ohio reiterated that his party won’t accept a tax increase as part of a deficit-reduction package.
House Minority Leader Nancy Pelosi, a California Democrat, called the Republicans’ approach “outrageous,” in part because it would require budget cuts that Democrats reject.
Obama is pressing Republican and Democratic congressional leaders to give him options for a deficit-cutting deal that lawmakers could support.
“It is hard to do a big package,” Obama said today. A failure to act before the Aug. 2 deadline could lead to “a situation where interest rates rise for everyone,” he said, creating in effect, “a tax increase for everybody.”
The administration has warned that it will be unable to pay all the government’s bills and that the nation’s credit rating will be downgraded, forcing higher borrowing costs, if the debt limit isn’t raised by the deadline.
Washington Governor Christine Gregoire, leader of the National Governors Association, said states “can ill afford” a federal government default. Speaking today at a conference in Salt Lake City, Utah, the second-term Democrat said, “It’s time to put this issue behind us and get on with the issue confronting every American, which is, ‘Do I have a job and will I have a job tomorrow.’”
Standard & Poor’s Ratings Services announced yesterday it may downgrade the U.S. top-level credit rating, saying there is an increasing risk of a substantial policy stalemate enduring beyond any near-term agreement to raise the debt ceiling. Moody’s Investors Service placed the nation’s credit rating under review for a downgrade on July 13.
U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben S. Bernanke, in separate trips to the Capitol yesterday, made their cases for lifting the debt limit.
The Standard & Poor’s 500 Index rose 0.3 percent to 1,313.03 at 12:37 p.m. in New York. The gauge fell 2.6 percent this week through yesterday on concern the economic recovery is at risk as Europe’s sovereign-debt crisis grows.
The S&P 500 rallied 93 percent from its low in March 2009 through yesterday as the Federal Reserve used large-scale asset purchases to buoy the economy and companies posted earnings that beat analysts’ estimates. Of the 12 S&P 500 companies that have posted results so far this earnings season, 10 have beaten forecasts for per-share profit.
Jeffrey Goldstein, Treasury undersecretary for domestic finance, said in a statement the warnings highlighted the need to “act expeditiously to avoid defaulting on the country’s obligations and to enact a credible deficit-reduction plan that commands bipartisan support.”
At a fifth consecutive negotiating session at the White House yesterday, Obama told congressional leaders to report to him by tomorrow on the type of deal their members can support, Democratic and Republican officials said.
The president wants the leaders to tell him whether they believe their caucuses can agree to a deficit-cutting package of $2 trillion or more, or if they should resort to a backup plan that could raise the debt ceiling through the November 2012 elections while postponing detailed decisions about cuts.
Obama and lawmakers didn’t schedule a negotiating session for today, and instead congressional leaders will focus on sounding out their colleagues, Democratic and Republican aides said on condition of anonymity.
Before yesterday’s negotiating session, Senate Democratic leader Harry Reid of Nevada and Republican leader Mitch McConnell of Kentucky were engaged in their own talks on backup options to avert a U.S. default by adding spending controls to a plan that would grant the president unilateral power to raise the debt limit, Reid told reporters.
Senator Charles Schumer of New York, the chamber’s third- ranking Democratic leader, said that while Democrats still want to see a comprehensive deal emerge from the White House-led talks, they are considering modifying a plan McConnell offered earlier this week as a “last-choice” alternative.
McConnell’s proposal would grant Obama authority to raise the debt limit in installments unless Congress disapproves by a two-thirds majority — a near impossibility with the Senate controlled by Democrats — while Obama would also be required to offer spending reductions.
The debt-ceiling increase would occur regardless of whether lawmakers enact the cuts, McConnell said. The idea drew criticism from both political parties, particularly from Republicans who said it would fail to curb spending.
Republican presidential candidate Tim Pawlenty is among those opposing McConnell’s plan, calling it today a “Band-Aid on a broken bone.” Pawlenty, Minnesota’s former governor, made his comment on “Political Capital With Al Hunt, ” airing on Bloomberg Television this weekend.
To contact the reporters on this story: Julie Hirschfeld Davis in Washington at jdavis159 Margaret Talev in Washington at mtalev
To contact the editor responsible for this story: Mark Silva at msilva34
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