Debt-Ceiling, Deficit Talks Push Sides Further Apart

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Debt-Ceiling, Deficit Talks Push Sides Further Apart'


ANALYSIS
By RICK KLEIN (@rickklein)
WASHINGTON, July 4, 2011

The canceled congressional recess gives the two sides in deficit negotiations more time to talk it out.

But a lack of talk hasn't been the problem. Democrats and Republicans are talking past each other, or, at least, aren't listening to the other side in high-stakes negotiations that might make the unthinkable come to pass when it comes to the nation's debts.

The two sides are moving further apart as the deadline for action on the debt ceiling draws closer. The biggest avenues to shrinking the deficit -– tax increases and cuts to entitlement programs -- are being blocked by Republicans and Democrats, respectively.

President Obama used a news conference last week to cast the fight as a choice between critical services for the vulnerable and tax breaks for the rich. That means more lines being drawn in the negotiating sand, not fewer.

Meanwhile, Sen. John McCain of Arizona -- who opposed the original Bush tax cuts and has often been attacked inside his party for challenging GOP orthodoxy -- summed up the Republican negotiating position on CNN Sunday.
PHOTO: US President Barack Obama speaks during a press conference in the East Room of the White House in Washington, DC, June 29, 2011, as he speaks to seize the initiative in a debt and spending showdown with Republicans.


"The American people, as the president describes it, administered a shellacking," he said of the Democrats' devastating November election losses. "They don't want compromise. They want us to balance the budget.

"They want us to stop mortgaging our children and our grandchildren's futures. And they don't think they need their taxes raised, and I don't either."

The impasse has leading officials in both parties conceding privately that a default on the nation's death is a possible, though not yet likely, outcome. The Treasury Department has said that Aug. 2 is the date when inaction on the debt ceiling will force the United States to begin defaulting on payments owed. Realistically, a deal has to be reached about 10 days earlier than that to ensure that it becomes law in time.

In that context, there's little to no chance of a major breakthrough that would extend the debt limit by $2 trillion, enough to get the nation through 2012, with a corresponding amount of deficit reduction.

A more likely outcome is a small increase to the debt limit of a few hundred billion dollars, with an agreement to limit spending by a similar amount. That would throw the issue back in front of Congress at least one more time before the 2012 elections, a prospect some Republicans relish because it would leave the president defending more borrowing again before Election Day.

But the political obstacles to a short-term deal are in some ways even greater than they would be to a more sweeping agreement. The new class of Republican lawmakers came to Washington with the express purpose of not putting off big decisions on spending and debt any longer, and won't be inclined to support a deal that kicks that can into another year.

"The problem with a mini-deal is we have a maxi-problem," Sen. John Cornyn, R-Texas, said on "Fox News Sunday."

Of course, any deal reached by the president and congressional leaders needs to be voted on by the full House and Senate. As previous votes on spending and debt have made clear, that's no mere formality.



Obama Critical Player on Debt

House Speaker John Boehner of Ohio knows that a chunk of his Republican caucus will likely oppose any increase in a debt ceiling, meaning he needs a significant number of Democrats to jump on board. That math doesn't change substantially whether the deal is a short- or long-term compromise; those inclined to vote for or against a debt-ceiling increase are poised to do so based on principle rather than particulars.

In the Senate, talk of a filibuster means at least seven Republicans need to join Senate Democrats in pushing legislation through. And some Democrats who are up for re-election next year will need significant coaxing before they vote for something seen as authorizing more borrowing.

That political mess brings things back to the White House. Obama remains the critical player whose principles and concessions will do the most to define the contours of a compromise, or a lack thereof.

In the meantime, the talking continues, with negotiators walking closer to the edge of a cliff that any of them think comfortable.
 

MayrMeninoCrash

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Funny how this obviously liberally biased :icon_cool article seems to paint Obama as to blame by the fact that Boehner can't lead the House like he's been appointed to do. Makes us yearn for the good, old days of Pelosi getting shit done for the good of the country.
 

VMS

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Sorry John, poll after poll says they do by large margins.
Did you actually read that article?

At least half of those polls say that the respondents "believe that taxes have to be raised to cut the budget deficit". That doesn't mean they support the raising of taxes: it means they think it'll be necessary. Even beyond that, the poll doesn't delineate why the respondents believe it'll be necessary. If I were questioned on one of those polls (and I have been, on occasion), I would have said it'll be necessary, but only because I think the Demmies will make it so, not because it's budgetary necessessity, but because it'll be a political goon-arming.

The other half of the polls quoted either say "raise taxes" generically or "raise taxes on the rich". McCain said the American people don't want THEIR taxes raised: the respondents could easily have been saying "raise that others guy's taxes, but not mine". As a matter of fact, the "raise taxes on the rich" is saying that.

Those polls don't quite say what you think they say, oandapartycock.

Dammit, man, you can parse sentences better than that.
 

MayrMeninoCrash

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How sad is it that I have to actually ask if you're joking about this monumentally stupid statement?
Never been a fan of the Pel-Monster but Boehner absolutely sucks in his current role. He should be able to at least get a majority opinion on a bill considering his party controls the House. Throw something to the wolves in the Senate to tear apart but at least he can say he did his job. I missed Rush's last 1000 shows but even he can't be happy with Boehner.
 

Party Rooster

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#9
[/I]McCain said the American people don't want THEIR taxes raised: the respondents could easily have been saying "raise that others guy's taxes, but not mine".
Isn't that the way it always is? WE NEED TO CUT ENTITLEMENTS!!! (But keep your hands of MY SS and Medicare). ELIMINATE EARMARKS!!! (But not in MY district).

McCain's being dishonest about how much support there is in raising taxes to cut deficits. And a lot of those polls ask about "Americans making more than $250,000" and we know that's not really classified as "rich" anyway. :action-sm

But we'll never make any headway on the debt without cutting entitlements, and that's something there's even less support for.
 

f kane

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#10
First off all these polls are done largely by a media that, at worst, is sympathetic to this president and would love to hand him a victory. Forget the fact they equate rich=evil as one of their main beliefs, but that belief rarely results in just "the wealthy" getting more money taken from the in the way of tax increases; somehow everyone get hit tax-wise when they start talking that way.

In 2010 the people directly said that they wanted to take the power away from Obama to raise taxes. They put the Republicans in control of the House of Representatives. Are we to believe some media polls over a direct and clear decision from the voters.
 

MayrMeninoCrash

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In 2010 the people directly said that they wanted to take the power away from Obama to raise taxes. They put the Republicans in control of the House of Representatives. Are we to believe some media polls over a direct and clear decision from the voters.
Couldn't you make the same argument that most people want single payer insurance because they elected Obama in 2008?
 

Begbie

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#12
Couldn't you make the same argument that most people want single payer insurance because they elected Obama in 2008?
On the contrary...Obama was elected because of his skin color, his exceptional teleprompter reading skills, and the fact that he was going to say anything to get elected. Not because people wanted the elimination of the private insurance industry in favor of a single-government entity. That's laughable.

Slight correction: I think we can all agree people want good quality healthcare at a much better price...and if the government can deliver it efficiently...who wouldn't be in favor of that? But lets not kid ourselves here...people want to keep the same coverage they have now, and if not, they want a little more than some politician or biased thinktanks telling them their coverage is going to be so much better and so much cheaper. No one was buying it cuz it wasn't true.
 

MayrMeninoCrash

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On the contrary...Obama was elected because of his skin color, his exceptional teleprompter reading skills, and the fact that he was going to say anything to get elected. Not because people wanted the elimination of the private insurance industry in favor of a single-government entity. That's laughable.
Then saying that Republicans were elected in 2010 to halt tax increases is equally unlikely. You just made my point perfectly.
 

Begbie

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Then saying that Republicans were elected in 2010 to halt tax increases is equally unlikely. You just made my point perfectly.
Somewhat. Republicans have made tremendous gains mainly because people wanted to take power away from Obama and the democratic leadership to prevent things like cap and trade, further implementation of Obamacare, amnesty without doing shit for border security, and more of the circus-like bullshit that the progressives put us through in 09-10. Alot of this shit still on Obama/Pelosi/Reid's to-do list was going to ultimately raise taxes and expand government. So, FK's totally right on that point. You're right in that it does compare to the far-lefty dopes that actually thought Obama was going to eliminate private insurers in favor of one government entity, gain 12 million new democratic voters by blindly granting amnesty to illegals, and pull us out of Afghanistan, Iraq and all of the other countries we have some presence in.

Obama and the dems promised to take the United States in a new utopia-like direction, and won big in 2008 because of it. They failed in delivering that. Republicans promised to put a stop to the bullshit lefty legislation and circus-like antics in DC from the progressives, and won big in 2010 because of it.
 

MayrMeninoCrash

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Somewhat. Republicans have made tremendous gains mainly because people wanted to take power away from Obama and the democratic leadership to prevent things like cap and trade, further implementation of Obamacare, amnesty without doing shit for border security, and more of the circus-like bullshit that the progressives put us through in 09-10. Alot of this shit still on Obama/Pelosi/Reid's to-do list was going to ultimately raise taxes and expand government. So, FK's totally right on that point. You're right in that it does compare to the far-lefty dopes that actually thought Obama was going to eliminate private insurers in favor of one government entity, gain 12 million new democratic voters by blindly granting amnesty to illegals, and pull us out of Afghanistan, Iraq and all of the other countries we have some presence in.

Obama and the dems promised to take the United States in a new utopia-like direction, and won big in 2008 because of it. They failed in delivering that. Republicans promised to put a stop to the bullshit lefty legislation and circus-like antics in DC from the progressives, and won big in 2010 because of it.
Either way voters were sold on the better story, be it free healthcare in 2008 or lower taxes in 2010.
 

whiskeyguy

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#16
I wouldn't automatically be against higher taxes to reduce the deficit, but spending cuts have to come first and in a big way. The federal government needs to prove they are serious about cutting spending and managing their finances before I'm alright with them having any more of our money. If tax raises come first, then you're just throwing slightly more money at the same bloated, wasteful, inefficient, and in some cases unconstitutional programs.

Isn't that the way it always is? WE NEED TO CUT ENTITLEMENTS!!! (But keep your hands of MY SS and Medicare).
Social Security (and to an extent medicare) isn't an "entitlement" program in the same sense as welfare, food stamps, and subsidized housing are. People were sold on social security by being told it was their own personal "bank account" and the government was just going to hold on to their money for them. Funding for it came directly from their own paychecks. Of course this was bullshit and the program is so fucking flawed and such a huge mistake something drastic needs to be done. However workers saw exact numbers every few weeks of how much they were paying into these programs, so feeling entitled to something you paid into for 40 years is not the same as feeling entitled to government money after never working a day in your life and yet constantly spitting out child after child.
 

Begbie

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#17
Either way voters were sold on the better story, be it free healthcare in 2008 or lower taxes in 2010.
More like, voters in 2008 were sold on the idea that this mystical Kenyan ;) was going to solve the country's problems, that were mostly created by the administration of the previous 8 years and typical Washington politics. Voters in 2010 were sold on the idea that some balance was needed in government so that this mystical Kenyan ;) and his progressive leadership couldn't fuck things up even more.
 

MayrMeninoCrash

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#18
More like, voters in 2008 were sold on the idea that this mystical Kenyan ;) was going to solve the country's problems, that were mostly created by the administration of the previous 8 years and typical Washington politics. Voters in 2010 were sold on the idea that some balance was needed in government so that this mystical Kenyan ;) and his progressive leadership couldn't fuck things up even more.
Go back to 2004 when the mystical Texan was going to solve all of our problems with control of the House and Senate and 2006 when voters also agreed some balance was needed. Still follows my theory of voters buying the better story.
 

VMS

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I wouldn't automatically be against higher taxes to reduce the deficit, but spending cuts have to come first and in a big way. The federal government needs to prove they are serious about cutting spending and managing their finances before I'm alright with them having any more of our money. If tax raises come first, then you're just throwing slightly more money at the same bloated, wasteful, inefficient, and in some cases unconstitutional programs.
Yup. Personally, I believe that cuts can take care of the problem by themselves, but I'm not against raising taxes/cutting loopholes, as long as it's done as part of an overall package that includes a lot more reduction of spending.

The truth is this: business does not do well when you keep changing tax rules, because when you change the rules businesses spend a period adjusting to the new rules and that time is better spent doing their real jobs and making money. Even cutting taxes, to a certain degree, slows down businesses for a little while because businesses will take the time to figure out how to take advantage of any new loopholes. Raise taxes, and they'll spend a LOT of time (often more time/money than they actually save...) trying to figure out how to avoid the new taxes, or at least alleviate them.

Figure out a smart business-friendly tax system, and then leave it the fuck alone unless you really need to change it.

Historically (WWII-current recession), the US gov't collects ~17% of the US GDP. That was true when the tax rate was high, that was true when the tax rate was lowered, that was true when times were good, that was true when times were bad, and every combination possible between those factors.

The US gov't needs to figure out how to work within that income bracket.
 

VMS

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Oh, and this: about 9 months ago, many of us were guessing that President Obama would be taking a page from President Clinton. Take a hammering at your first midterm Congressional elections, so go the other way while pretending not to go the other way and curry favor with the American public that way.

"I heard the American people's message" was the refrain after the midterm elections, and many of us were expecting him to tack the other way, at least publicly.

Ummmm... anyone, even Mayr, willing to say that's what he's done since November?
 

Party Rooster

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#22
Social Security (and to an extent medicare) isn't an "entitlement" program in the same sense as welfare, food stamps, and subsidized housing are.
Then tell that to the pundits that keep lumping them together. True welfare only accounts for 5-6% of our budget.

People were sold on social security by being told it was their own personal "bank account" and the government was just going to hold on to their money for them. Funding for it came directly from their own paychecks. Of course this was bullshit and the program is so fucking flawed and such a huge mistake something drastic needs to be done
Social Security was pretty self-sustaining but it's been pillaged for decades.

Ummmm... anyone, even Mayr, willing to say that's what he's done since November?
Bush tax cuts
 

whiskeyguy

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#23
Then tell that to the pundits that keep lumping them together. True welfare only accounts for 5-6% of our budget.

Social Security was pretty self-sustaining but it's been pillaged for decades.
Agreed. It doesn't matter how good of a concept in theory Social Security was, the federal government fucked it up like it does pretty much everything else, which is why they need to display some responsibility before getting a raise in their allowance.

The problem is we're really, really fucked. An increase in taxes may be necessary, but without vast spending cuts we will be (if we're lucky) delaying the inevitable crash when the entire system collapses.
 

VMS

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I hate to sound like some old man here, but the fucking old saws hold true: if you make a million, but spend a million and one, you're in trouble. If you make a thousand, but spend 999, you'll be okay.

It's not about how much you make. It's about how much you spend. It's why Anthony is quite likely going to be a broke old man some day, while Opie is going to be fine.

The US gov't has not proven it can spend within its means. The LAST thing you give to someone like that is a fucking raise.

Are any of you parents? Do you have a kid who gets an allowance on Sunday, but always comes to you on Thursday asking for more cash? That kid should never get more money until he figures out how to make the money he's already getting last at least until the next time he's supposed to get more.

Now, on the default issue, I think we're seeing a lot of brinksmanship. I really do think we're in deep shit, as is the rest of the fucking planet, if the US defaults. I predict (I hope) they figure out a good way to make shit work before it becomes an issue.

I'm just glad that I'm clear of debt, because I'm getting the feeling that things are going to get even more fucked up on that front if they screw this up.