Obama warns of debt crisis

President urges compromise

Monday, July 25, 2011 9:18 PM
Last updated Tuesday, July 26, 2011 2:17 AM
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WASHINGTON - Decrying a "partisan three-ring circus" in the nation's capital, President Obama criticized a newly minted Republican plan to avert an unprecedented government default tonight and said congressional leaders must produce a compromise that can reach his desk before the Aug. 2 deadline.

Jim Watson/Associated Press
“It is a dangerous game we’ve never played before, and we can’t afford to play it now,” President Obama said Monday night of the politics surrounding the debt crisis. “Not when the jobs and livelihoods of so many families are at stake.”

"The American people may have voted for divided government, but they didn't vote for a dysfunctional government," the president said in a hastily arranged prime-time speech. He appealed to the public to contact lawmakers and demand "a balanced approach" to reducing federal deficits.

Obama stepped to the microphones a few hours after first Republicans, then Democrats drafted rival fallback legislation Monday to avert a potentially devastating government default in little more than a week.

Obama said the approach unveiled earlier in the day by House Speaker John Boehner would raise the nation's debt limit only long enough to push off the threat of default for six months. "In other words, it doesn't solve the problem," he said.

The president had scarcely completed his remarks when Boehner made an extraordinary rebuttal carried live on the nation's networks.

"The president has often said we need a 'balanced' approach, which in Washington means we spend more, you pay more," the Ohio Republican said, speaking from a room just off the House floor.

"The sad truth is that the president wanted a blank check six months ago, and he wants a blank check today. That is just not going to happen."

Directly challenging the president, Boehner said there "is no stalemate in Congress."

He said the Republicans' newest legislation would clear the House, could clear the Senate and then would be sent to Obama for his signature.

The back-to-back televised speeches did little to suggest that a compromise was in the offing, and the next steps appeared to be votes in the House and Senate on the rival plans by mid-week.

Despite warnings to the contrary, U.S. financial markets have appeared to take the political maneuvering in stride - so far. Wall Street posted losses Monday but with no indication of panic among investors.

Without signed legislation by day's end on Aug. 2, the Treasury will be unable to pay all its bills, possibly triggering an unprecedented default that officials warn could badly harm a national economy struggling to recover from the worst recession in decades.

Obama wants legislation that will raise the nation's debt limit by at least $2.4 trillion in one vote, enough to avoid a recurrence of the acrimonious current struggle until after the 2012 elections.

Republicans want a two-step process that would require a second vote in the midst of a campaign for control of the White House and both houses of Congress.

There were concessions from both sides embedded in the competing legislation, but they were largely obscured by the partisan rhetoric of the day.

 Senate Republican leader Mitch McConnell of Kentucky urged Obama to shift his position rather than "veto the country into default."

And Reid jabbed at tea party-backed Republicans who make up a significant portion of the House GOP rank and file. The Nevada Democrat warned against allowing "these extremists" to dictate the country's course."

The measure Boehner and the GOP leadership drafted in the House called for spending cuts and an increase in the debt limit to tide the Treasury over until sometime next year. A second increase in borrowing authority would hinge on approval of additional spending cuts sometime during the election year.

Across the Capitol, Reid wrote legislation that drew the president's backing, praise from House Democratic leader Nancy Pelosi - and criticism from Republicans.

By design or not, the two sides' harsh remarks obscured concessions that narrowed the differences among the nation's political leaders as they groped for a way to resolve the economic crisis.

With their revised plan, House Republicans backed off an earlier insistence on $6 trillion in spending cuts to raise the debt limit.

And Obama jettisoned his longstanding call for increased government revenues as part of any deficit reduction plan.
Pending the president's televised speech, the White House also declined repeatedly to say whether Obama would veto the revised House measure.

White House communications director Dan Pfeiffer called the proposal "not a serious attempt to avert default because it has no chance of passing the Senate."

Not all Republicans were happy with their leadership's decision to scale back legislation that had cleared the House last week, only to die in the Senate.

Among House conservatives who have provided the political muscle for the Republican drive to cut spending, the revised legislation was a disappointment. "I cannot support the plan," said Rep. Jim Jordan of Ohio, one of the leading advocates of legislation that cleared the House last week and died in the Senate.

But two rank-and-file Republicans said their constituents were voicing concerns other than the rising federal debt.
Rep. Tom Rooney, R-Fla., said his office is getting calls from constituents saying, "If I don't get my Social Security check, it's your fault."

Rep. Tom Reed, a New York freshman, said many of his constituents are telling him to stand firm in his drive to cut spending. "But I will admit there's some anxiety in the district" about Social Security and other programs, he added.

As Boehner readied his legislation, Senate Democratic leaders called a news conference to announce their own next steps.

The Democrats' measure would cut $2.7 trillion in federal spending and raise the debt limit by $2.4 trillion in one step - enough borrowing authority to meet Obama's bottom-line demand.

The cuts include $1.2 trillion from across a range of hundreds of government programs and $1 trillion in savings assumed to derive from the end of the wars in Afghanistan and Iraq.

Boehner ridiculed the $1 trillion in war savings as gimmicky, but in fact, they were contained in the budget the House passed earlier in the year.

The legislation also assumes creation of a special joint congressional committee to recommend additional savings with a guaranteed vote by Congress by the end of 2011.
Yet in the maneuvering it appeared another of the president's long-held conditions appeared to be in danger of rejection.

Neither Boehner's measure nor the one Reid was drafting included additional revenue, according to officials in both parties.

In addition to a two-step approach to raising the debt limit, the House measure would require lawmakers in both houses to vote later this year on a constitutional amendment requiring a balanced federal budget.

An earlier bill, passed in the House last week but then scuttled in the Senate, would have required Congress to approve an amendment and send it to the states for ratification.

That same bill would have made $6 trillion in spending cuts in exchange for raising the debt limit.
Obama promised to veto that bill even before the House voted on it.

Each side offered accounts of secret maneuvering designed to put the other side in a poor light.
Democratic officials said Obama called Boehner on Saturday night, one day after the collapse of compromise talks, and offered to reduce his demand for new tax revenue by $400 billion.

In return, Obama said that he wanted Republicans to abandon their demand to cancel parts of the year-old health care law if future deficit cuts did not materialize.

This official said Boehner rejected the proposal Sunday.

Republicans disputed that account - and offered one of their own.

In their version of events, Reid agreed on Sunday night to a two-step approach to raising the debt limit that Obama has rejected.

Democrats denied it.

None of the officials involved would agree to be quoted by name.

Monday's debt developments

Congress has until Aug. 2 to raise the federal borrowing limit or the government will run out of money and possibly default on its debt. House Republicans say they won't raise the debt limit without equal spending cuts. President Barack Obama and Democrats insist that higher revenues must be included.

Monday's developments: House Republicans and Senate Democrats offered competing legislation that narrowed their differences over how to avert a government default. House Republicans backed off an earlier insistence on $6 trillion in spending cuts to raise the debt limit while President Barack Obama dropped his longstanding call for increased government revenues as part of any deficit reduction plan.

What's next: House Republican leaders were expected to share details of their proposal to the rank and file and begin planning a vote, perhaps as early as Wednesday. In the Senate, Democratic leaders were expected to offer details of their plan.

- Associated Press

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Augusta resident
1368
Points
Augusta resident 07/25/11 - 09:36 pm
0
0
Just proves that the

Just proves that the President ain't runnin nuthin (no matter who is President). Congress runs the country.

happychimer
15353
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happychimer 07/25/11 - 09:46 pm
0
0
That's right.

That's right.

Insider Information
4009
Points
Insider Information 07/25/11 - 09:53 pm
0
0
Is anyone so gullible to

Is anyone so gullible to believe that a "catastrophe" will occur if we don't raise the debt ceiling?

Hmmm... Geithner can't figure out how to use TurboTax, but he can predict the economic future? Hahaha. What a joke.

I have a new drinking game. Everytime a politician says "catastrophe" or "balanced" I take a shot.

shrimp for breakfast
5421
Points
shrimp for breakfast 07/25/11 - 10:55 pm
0
0
I know one thing. If the US

I know one thing. If the US defaults on August 2nd Americans are not going to care which party is responsible. They will speak loud and clear in the voting booth come election time. This is no time to be playing politics. These guys are playing with fire. The ramifications of their actions could be staggering. We're not just talking about the US economy but the entire worlds!

Little Lamb
43562
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Little Lamb 07/25/11 - 11:03 pm
0
0
Obama has said a lot of

Obama has said a lot of things that have proven to be untrue. It is now time to separate the "debt ceiling" legislation from the "tax reform" legislation. Tax reform must be done independently and deliberately. It must be done under no artificial deadline. Just raise the debt ceiling a little bit and go on. That's how it has been done in the past.

Little Lamb
43562
Points
Little Lamb 07/26/11 - 07:55 am
0
0
What Obama posits as

What Obama posits as "compromise" is really ultimatum. Obama wants Republicans to agree to raise income tax rates just as House Leader George Mitchell got President George H. W. Bush to raise taxes under an ultimatum in 1992. That ultimatum led to the embarassing defeat of Bush. Boehner would be a fool to fall into Obama's nation-crippling trap.
- - - - - - - - - - - - - -
In my original post I had "Mitch McConnell" up there. Thanks to Craig Spinks for correcting me that I was thinking about George Mitchell.

Little Lamb
43562
Points
Little Lamb 07/26/11 - 07:52 am
0
0
Speaking of George Mitchell,

Speaking of George Mitchell, how's that "middle-East peace initiative" thing workin’ out for ya, George?

Insider Information
4009
Points
Insider Information 07/25/11 - 11:31 pm
0
0
shrimp, do you really believe

shrimp, do you really believe that?

If you do, I have swamp land I want to sell you.

Insider Information
4009
Points
Insider Information 07/25/11 - 11:34 pm
0
0
Attention K-Mart shoppers! If

Attention K-Mart shoppers!

If the debt ceiling isn't raised and the world really does come to an end, I promise to apologize and buy everyone a steak dinner.

hockeymann
226
Points
hockeymann 07/26/11 - 12:11 am
0
0
We already have the

We already have the catastrophe. It happened when idiots elected Obama as President.

faithson
4606
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faithson 07/26/11 - 12:17 am
0
0
Insider; we will all be

Insider; we will all be paying more if these legislators do not come to a compromise, PERIOD. Ask Senator Colburn, R-OK a man who knows. The effect of not coming to terms on this will be catastrophic to the money markets. A fact that will cost states more in interest on bonds, more in interest for the existing deficit, more for car loans, more for mortgage loans and on and on. A default will add billions upon billions in interest payments for the federal and state governments, let alone business lending. Have your fun joking, but make no mistake about it, this is not a laughing matter to those who are serious about maintaining America's prominence in world affairs. When was the last time you went for advise from a neighbor who you knew could not handle his OWN affairs. You maybe, but not me. Governing is the art of compromise, not a religious affair as so many have been lead to believe in these divisive times. and if you really think that holding tight to your agenda at all costs will gain you political advantage, you have not studied history and are therefor apt to repeat mistakes that will marginalize your agenda even further.

faithson
4606
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faithson 07/26/11 - 12:25 am
0
0
hockeyman; the catastrophe

hockeyman; the catastrophe was the Bush Administration. Do you really believe that Obama would have been elected if the previous administration had not screwed up so badly? Remember, it is the independents who elect the President, not repubs like you nor demo's like me, the 10% swing vote. So if you want to give some grief to someone, go after those 'swingers' who at the end of 8 years had had enough. Heck, I knew we were in for trouble when the Supreme Court ended up being the deciding body, not the people of Florida. It has been down hill since for the common man.

Craig Spinks
817
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Craig Spinks 07/26/11 - 05:29 am
0
0
Little Lamb, The late U.S.

Little Lamb,

The late U.S. Senator Daniel Patrick Moynihan(D-NY) noted, "Everybody can have his own opinion, but everybody can't have his own facts."

Mitchell McConnell was a U.S. Senator in 1992, not a House member. And George Mitchell, former U.S. Senator from Maine, was the "Mitchell" involved in the Middle East Peace Initiative.

madgerman
236
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madgerman 07/26/11 - 07:04 am
0
0
I don't know who's to blame
Unpublished

I don't know who's to blame but I am glad the conservatives are protecting big business and their assets. Can you imagine Billy having to fly firat class to the next horse show. Or better yet a hedge fund manager actually paying the same tax rate as his/her secretary. I say do what they must, but leave our millionaires alone, they worked harder than the common man, or got their higher status through a death in the family, and deserve the royal treatment. Bottom line is we all love and admire our well heeled friends and we must protect them at all costs.

Insider Information
4009
Points
Insider Information 07/26/11 - 07:08 am
0
0
faithson, I'm going to take

faithson, I'm going to take your advice.

This morning, I will go to my bank and tell them that they must lend me money to pay back money they lent or else there will be a catastrophe.

hounddog
0
Points
hounddog 07/26/11 - 07:08 am
0
0
Augusta resident, ‘Just
Unpublished

Augusta resident, ‘Just proves that the President ain't runnin nuthin (no matter who is President). Congress runs the country.’
happychimer, ‘That's right.’
Can you folks spell hypocrite? But then I guess nothing is the community organizer’s fault. It’s funny how the system changed? Everything was Bush’s fault but now it’s congress.
What a joke!

Granddaddy John
101
Points
Granddaddy John 07/26/11 - 07:24 am
0
0
Odumber-The sky is
Unpublished

Odumber-The sky is falling,what a complete and total moron and his followers.

factfinder
6
Points
factfinder 07/26/11 - 07:25 am
0
0
I would suggest that after

I would suggest that after posting your comments you immediately contact your national representatives and tell them to stop playing games with the livelihood (salaries) of soldiers and their familes, persons who rely on social security, the increase in interest rates, etc. Let (both parties) know that we do not appreciate them playing chicken with the future of this country.

Boehner and the Tea Party has one goal, to ensure that Presidnt Obama is not re-elected, without regard to the negative impact their actions will have on this country. There will be plenty of time for campaigning without holding the country hostage.

No tax increase for the riches population and oil companies, ARE YOU SERIOUS. The trickle down theory (Reaganomics) did not work in practice then and will not work now. In reality the rich got richer while the middle class shrunk and the working poor increased. President Obama did not ceate the present economic crisis, he and rational thinking representative are trying to deal with it in the most economically sound manner. I would urge Speaker Boehner to stop grandstanding and practice the art of political compromise (which is what makes this country great).

55 F-100
1
Points
55 F-100 07/26/11 - 07:30 am
0
0
More lies from

More lies from Prezbhojangles. How arrogant and pompous can one individual be? Can't wait for Nov. 2012!

painfully honest
6
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painfully honest 07/26/11 - 07:53 am
0
0
Guys, it is very entertaining
Unpublished

Guys, it is very entertaining to sit back and read all of the cute nicknames you have given OUR president, but like it or not, he is the man in white house right now. We have had idiots for presidents for at least the last two terms prior to this one but they weren't disrespected as much as Obama is.

Here's a hard fact. Unless you are filthy rich, the Republicans are not working for you. I am a proud independent which means I am able to decide what is best for me and my family and not be forced to follow the beliefs of a politician because they are a part of my political party. The republicans are only interested in protecting the finances of their rich buddies and in making sure that President Obama fails, even if that means damning the rest of the country. The plan being proposed by the democrats would allow the "rich" to be taxed at the same rate that the average American is taxed at. I think that is fair. I hope this country wakes up and realizes that there is no such thing as a "lower or middle-classed republican." The republicans do not have your best interests at heart.

Little Lamb
43562
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Little Lamb 07/26/11 - 08:04 am
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0
Painfully Honest wrote: The

Painfully Honest wrote:

The plan being proposed by the democrats would allow the "rich" to be taxed at the same rate that the average American is taxed at. I think that is fair.

I don't think this is correct. What the democrats wish to do is raise the income tax rate on households (and small businesses) reporting more than $250,000 total income to the rate it was in 1999. That is higher than the rate the average American pays.

Of course, what the republicans have been saying all along is that the democrats are changing their negotiating offerings on a daily basis and no one can keep up with the horse trading because nothing is put in writing.

Brad Owens
4097
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Brad Owens 07/26/11 - 08:23 am
0
0
Obama should not call the

Obama should not call the opposition crazy. They were elected to represent the people in their districts with these "crazy" platfroms, and those people expect them to be principled.

Easy to understand to me.

Everyone must compromise.

Brad

seenitB4
79609
Points
seenitB4 07/26/11 - 08:30 am
0
0
I think I heard----No more

I think I heard----No more passing so we can see what's in it----- hah

seenitB4
79609
Points
seenitB4 07/26/11 - 08:34 am
0
0
Right now in Atlanta theFeds

Right now in Atlanta theFeds have given the go-ahead to put at least 47million $$ on a trolly to run 2 miles......from downtown to MLK memorial site------when we are closing fire stations & laying off police--& closing libraries......we need a shake-up in DC--maybe a shutdown will do it!

Chillen
17
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Chillen 07/26/11 - 08:55 am
0
0
Obama just doesn't get it.

Obama just doesn't get it. He never will. He's never had experience in the real private sector and he has minimal political experience. We have the wrong man in place to get this done.

But, he is the master of focus group buzz words. He said "balanced approach" about 10 times last night! How "original" LOL!

Tyler-Ray_Daddy
44
Points
Tyler-Ray_Daddy 07/26/11 - 09:24 am
0
0
My God, many of you need to

My God, many of you need to become much better informed by reading facts versus biting on Liberal headlines. Someone said just raise it a couple trillion like we have done in the past. Why the heck do you think the country is highly in debt the way it is now, it must come to a stop!
As for increasing taxes on the so-called rich, the rich will only be the beginning. You want more taxes, then have a flat tax for everyone at the same rate; everyone should have skin in the game. Currently, something like 45% of folks do not pay any income taxes. What must happen first is to actually & finally cut out the waste and fraud in the system.

allhans
22980
Points
allhans 07/26/11 - 09:31 am
0
0
The question we should be

The question we should be asking is why Obama let us get to this point. He was elected to be our leader, so why the h--- hasn't he been leading in his 2 1/2 years.
News accounts say Reagan had the debt ceiling raised 18 times, and Obama can't get it done even once. That should say a thousand words.
As the old saying goes, lead or get out of the way.

Chillen
17
Points
Chillen 07/26/11 - 09:59 am
0
0
Reagan was able to get the

Reagan was able to get the debt ceiling raised because America trusted him to lead us in the right direction -- and he did. It was clear that he loved America and had no intention of "fundamentally transforming" her into a socialist eutopia.

Obama on the other hand.. Well, the words "deepest darkest abyss" come to mind. No one trusts him. He has wasted trillions of dollars and his spread the wealth program clearly doesn't work. That's why he can't get the job done.

Well done Republicans. Keep holding his feet to the fire. He is FINALLY being held accountable for his grievous actions.

southernguy08
496
Points
southernguy08 07/26/11 - 11:20 am
0
0
FAITHSON, by your own logic,
Unpublished

FAITHSON, by your own logic, the next election will put a Republican in the White House. That's what I'm gathering from what you've said, based on how badly Obama has messed up the country.

factfinder
6
Points
factfinder 07/26/11 - 11:36 am
0
0
To all of the above who have

To all of the above who have problems with respecting President Obama, Get Over It. The budget that he is working to pass will benefit the majority (probably all) of you who are writing the negative comments. Read, comprehend, and stick with the facts. President Obama is by far one of the most intelligent presidents that this country has had. He looks out for the interest of the majority of people, he represents our country well interms of diplomacy. Chillen, President Reagan was an actor and the verdict is still out as to whether he was functioning with all of his mental faculties (as reported by his own family members). You must ask yourself why did people trust Presidet Reagan, was it based on substance or appearance.

Lets keep it real, and insisted that our elected officials do what is best for the majority of people in the country which is also in the best interest of the country.

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