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Obama Summons Lawmakers to White House to Revive Debt Talks

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Panhead

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Obama Summons Lawmakers to White House to Revive Debt Talks
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By Mike Dorning and Kate Andersen Brower - Jul 23, 2011 9:14 AM PT



House Speaker John Boehner (R-OH), right, speaks while flanked by House Majority Leader Eric Cantor (R-VA) during a news conference about the ongoing debt ceiling negotiations, July 22, 2011, in Washington, DC. Photographer: Mark Wilson/Getty Images

President Barack Obama met today with Republican and Democratic congressional leaders on how to avert a U.S. default after House Speaker John Boehner broke off negotiations on a broader deal to cut the federal deficit.

With the Aug. 2 deadline to raise the debt ceiling approaching, Obama said at the White House last night that “at minimum” Congress must act to avoid a U.S. default that would roil financial markets and damage the economy. He said he was consulting with Treasury Department officials about a default’s potential consequences.

“It’s very important that the leadership understands that Wall Street will be opening on Monday, and we’d better have some answers during the course of the next several days,” Obama said.

Obama made his remarks shortly after hearing from Boehner yesterday that the Ohio Republican was withdrawing from the efforts the two have pursued to revamp the government’s finances over the next decade.

The president and Vice President Joe Biden met for just under an hour today with Boehner, House Minority Leader Nancy Pelosi, a California Democrat, Senate Majority Leader Harry Reid, a Nevada Democrat, and Senate Minority Leader Mitch McConnell, a Republican from Kentucky.

Treasuries fell for the first time in three weeks as the Obama-Boehner talks collapsed. Yields on two-year Treasury notes touched the highest in almost two weeks on July 21 as Standard & Poor’s reiterated it saw a 50 percent chance of cutting the U.S. credit rating within three months.
2012 Election

Boehner spokesman Michael Steel said in an e-mail today that Obama is insisting on raising the debt limit to a level that would last through the 2012 election.

“It would be terribly unfortunate if the president was willing to veto a debt-limit increase simply because its timing would not be ideal for his re-election campaign,” Steel said. Boehner planned to reiterate today that spending cuts must exceed an increase in the debt limit, his spokesman said.

The president didn’t hide his frustration with the turn of events yesterday, saying Boehner didn’t return his phone calls during the day, observing it wasn’t the first time during the debt-limit talks he had been “left at the altar,” and declaring the Republicans had walked away from “an extraordinarily fair deal.”
‘Can They Say Yes’

“Can they say yes to anything?” Obama said to reporters. “It’s the Republican Party that has said that the single most important thing facing our country is deficits and debts. We’ve now put forward a package that would significantly cut deficits and debt.”

Boehner disputed Obama’s version of the impasse at a press conference shortly after the president’s, saying he exited the talks because the White House “moved the goal posts” on the tax revenue that would be included in a deal. He said the Obama administration wanted “more money at the last minute.”

“It’s not in the best interest of our country to raise taxes during this difficult economy,” Boehner said.

He also expressed his own frustration with the bargaining, saying that dealing with the White House was like negotiating with a “bowl of Jell-O.”

Obama said in the bid for a deficit reduction agreement that Republicans have made a prerequisite for raising the debt limit, he was willing to cut $1 trillion from discretionary spending and another $650 billion in entitlement programs, such as Medicare. The president said tax increases of $1.2 trillion he sought were less than what a bipartisan group of senators had proposed this week.
‘Hard to Understand’

“It is hard to understand why Speaker Boehner would walk away from this kind of deal,” Obama said.

The president made his remarks moments after Boehner released a letter announcing his withdrawal from talks on a comprehensive package. The speaker called Obama to inform him of his decision.

“A deal was never reached, and was never really close,” Boehner said in the letter. “In the end, we couldn’t connect.”

Boehner said he will focus instead on reaching an accord with Senate leaders on a way to raise the federal debt ceiling to avoid a default on U.S. obligations.

In a statement released by his office, he said his focus now will be on getting “an agreement that will allow the country to avoid default and meets the principles that we’ve outlined: spending cuts that must be greater than the increase in the debt limit and no tax increases.”
Dispute Over Taxes

House Republican leadership aides said the key stumbling block to a deficit-reduction agreement was the dispute over taxes, with the president pressing for more revenue to be raised through a tax code rewrite than Republicans were willing to accept.

The aides said a breaking point in the talks came after a bipartisan group of senators known as the Gang of Six unveiled its plan on July 19 to slash $3.7 trillion from the debt through spending cuts and a tax overhaul that would produce $1 trillion more in tax revenue. The bipartisan group used a different baseline to compare revenue than congressional leaders used in the White House negotiations.

The Republican aides said the revenue increase in the bipartisan plan was larger than one Boehner and Obama had tentatively agreed to. An administration official said the plan changed the political dynamics in the push for a deal.
Smaller Revenue Increase

The official said release of the bipartisan plan would have made it harder to attract Democratic support for a proposal with a smaller revenue increase. The White House proposed several options, including a lower revenue figure with smaller cuts to entitlement programs, said the official, who provided the details on the condition of anonymity.

Rather than offering any counterproposals, Boehner’s team broke off communication, the official said.

Boehner didn’t return a call from Obama two nights ago, said another administration official. The speaker’s office notified Obama at 3:30 p.m. Washington time yesterday that Boehner would call him in two hours, and when Obama tried to reach him earlier, Boehner declined, the official said.

Boehner called the president about 5:30 p.m. yesterday to say he was withdrawing from the negotiations, said Republican and Democratic officials.
Withdrawal From Talks

The collapse in the talks was the second time Boehner has broken off the negotiations. The speaker withdrew on July 9 from earlier rounds of private discussions after word leaked to the media about the potential deal and fiscally conservative members of his party balked.

Obama and Boehner frequently have confronted strife within their ranks as time has dwindled to avert a default and they pressed for a plan to boost the nation’s $14.3 trillion debt limit.

The entrenched partisan positions were on display after yesterday’s dueling news conferences.

Reid chastised Republicans, saying they had “once again proven unable to overcome their ideological opposition to ending taxpayer-funded giveaways for millionaires, corporate jet owners and oil companies.”

Former Republican vice presidential nominee Sarah Palin applauded Boehner for standing firm. “Thank you, GOP House leaders. Please don’t get wobbly on us now,” she said in a posting on her Facebook page.
Blame for Impasse

Obama at his news conference sought to put the blame for the latest impasse squarely on House Republicans, who took control of the chamber in last November’s elections and whose ranks include scores of Tea Party-backed freshman. Obama said Democrats were willing to make “tough compromises,” while among the Republicans, “there doesn’t seem to be a capacity for them to say yes.”

Entitlement cuts Obama tentatively accepted included a change in the way the cost-of-living adjustment is computed for Social Security recipients that would lower annual benefit increases, administration officials said.

David Beers, Standard & Poor’s global head of sovereign and international public finance, said it’s possible the leaders may still be able to agree to a broad deficit deal.

“I’m reluctant to conclude that this is the end of the story,” Beers said in a telephone interview from Washington after Boehner announced his withdrawal. “There was always the possibility that it might not be possible for the parties to find some common ground, but let’s wait and see what the weekend brings.”
Avoiding Default

Obama stressed that at today’s session he would push the congressional leaders for ideas on how to keep the government from failing to meet its financial obligations. “I want them here at 11 a.m.,” he said. “Tomorrow, they are going to have to explain to me how it is that we are going to avoid a default.”

In his weekly radio and Internet address, Obama again called on lawmakers in both parties to agree to a “balanced approach” that would include ending tax breaks for “oil companies and corporate jet owners.” Obama said, “Before we ask seniors to pay more for Medicare, we should ask the wealthiest taxpayers to give up tax breaks we simply cannot afford.”

Representative Jeb Hensarling of Texas, in the Republicans’ weekly address, urged approval of his party’s proposal to raise the debt ceiling tied to a balanced-budget amendment to the Constitution. The legislation, which passed the House and failed in the Senate, would help the nation “cut up the credit cards once and for all,” Hensarling said.
Standard & Poor’s

Standard & Poor’s warned there is a 50 percent chance it will lower the U.S. government’s AAA credit rating by one or more levels within three months. S&P said yesterday that, even if Congress raises the debt limit in time to avert a default, it might lower the U.S. sovereign rating to AA+ with a negative outlook if it isn’t accompanied by a “credible solution” on the debt level.

Such a ratings change, which could come as soon as early August, would “modestly raise” the federal government’s borrowing costs, S&P said. If the U.S. defaults on some obligations after Aug. 2, even if it pays bondholders, S&P forecasts short-term interest rates would rise by 0.50 percentage points and long-term interest rates by 1 percentage point.
Tax Receipts

Greater-than-expected tax receipts might give the U.S. Treasury an extra week -- until Aug. 10 -- before exhausting its borrowing authority, analysts with New York-based Barclays Capital said yesterday. The government has collected about $14 billion more in tax revenue since July 14 “than we were expecting,” the analysts wrote.

Yields on benchmark 10-year Treasury notes rose six basis points, or 0.06 percentage point, to 2.96 percent yesterday in New York, from 2.91 percent on July 15, according to Bloomberg Bond Trader prices.

In U.S. markets that closed before the Obama-Boehner talks collapsed, the S&P 500 rose 0.1 percent to 1,345.02 at 4 p.m. in New York and gained 2.2 percent this week. The Dow Jones Industrial Average dropped 43.25 points, or 0.3 percent, to 12,681.16. Gains in technology stocks pushed the Nasdaq-100 Index up 1.1 percent to the highest level since February 2001.

To contact the reporter on this story: Kate Andersen Brower in Washington at kandersen7@bloomberg.net

windreader1



Here are a couple of quotes from O's press conference yesterday. What is interesting is that O says there will be 800 billion available. It sounds as if that money is already there. So does the 1.2 trillion include that 800 billion or is the 1.2 trillion over and above the 800 billion. If you add the 800 billion to 1.2 trillion I believe you would get 2 trillion. Anyone else getting fuzzy trying to stay up with the numbers, LOL.


"In addition, what we sought was revenues that were actually less than what the Gang of Six signed off on.  So you had a bipartisan group of senators, including Republicans who are in leadership in the Senate, calling for what effectively was about $2 trillion above the Republican baseline that they’ve been working off of.  What we said was give us $1.2 trillion in additional revenues, which could be accomplished without hiking taxes -- tax rates, but could simply be accomplished by eliminating loopholes, eliminating some deductions and engaging in a tax reform process that could have lowered rates generally while broadening the base.

Q    But they were willing to move on some revenues, apparently.

THE PRESIDENT:  Absolutely.  But what you saw -- and, again, you’ll see this from the description of the deal -- essentially what they had agreed to give on is to get back to a baseline -- this starts getting technical, but there were about $800 billion in revenue that were going to be available.  And what we said was when you’ve got a ratio of $4 in cuts for every $1 of revenue, that’s pretty hard to stomach.  And we think it’s important to make sure that whatever additional revenue is in there covers the amount of money that’s being taken out of entitlement programs.  That’s only fair."

Panhead

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just seen on FoxNews they didn't get anything worked out.....surprise surprise

windreader1


unbelievable, absolutely unbelievable

Panhead

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Obama Calls Emergency Parley As Debt Talks Derail

By Greg Robb

Published July 22, 2011

| MarketWatch Pulse

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WASHINGTON - President Barack Obama called congressional leaders to an emergency Saturday morning meeting to plan for a narrow debt-ceiling increase as talks for a comprehensive deficit-cutting plan broke down Friday. In a hastily scheduled press conference, a clearly frustrated Obama said that House Speaker John Boehner walked away from debt talks. In a letter to his colleagues, Boehner, R-Ohio, said the talks failed because of "different visions for our country." Obama portrayed his offer to Boehner as offering very small revenue increases that could be accomplished without any tax hikes. He said the question remains whether Republicans will agree to any deal.

Copyright © 2011 MarketWatch, Inc.

Read more: http://www.foxbusiness.com/2011/07/22/obama-calls-emergency-parley-as-debt-talks-derail/#ixzz1Sx1T0cwI

MrsCK


OK I was wondering what the "money handlers" are in all this:

JULY 23, 2011

Bracing for Fallout if Debt Talks Fail

By DAMIAN PALETTA

Top government officials intensified discussions about how they would handle the chaos in financial markets that could ensue if the debt ceiling weren't raised by Aug. 2, evidence the Obama administration is weighing scenarios it swore for months would never occur.

Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke, and Federal Reserve Bank of New York President William Dudley met Friday to talk about challenges they likely will face if no deal is struck in time. They discussed a number of issues that officials hope never materialize, including what would happen if the government's debt were downgraded by ratings firms.

"While we remain confident that Congress will raise the debt ceiling soon, officials from the Treasury, Federal Reserve Board and the New York Fed met today to discuss the implications for the U.S. economy if Congress fails to act," the three said in a joint written statement after the 90-minute meeting.

President Barack Obama said Friday evening he had held talks with Mr. Geithner about what "adjustments" might have to be made if the country defaults on its debt.

Administration officials have determined they don't have the power to raise the debt ceiling without Congress, and likely have no power to avoid an eventual default on government debt. That has put their focus on trying to determine what financial turmoil might unfold if the debt ceiling isn't raised, and what powers they might have to try and blunt any fallout.

A key concern for regulators is Treasury's expected move to replace $87 billion in maturing debt on Aug. 4. Investors are still expected to line up for an auction, but the government might have to pay more if the debt ceiling isn't raised, given the higher risk the government could someday default. If the auction "fails" because investors don't show up, it could trigger a financial crisis. The Federal Reserve would likely play a central role in managing any such crisis, by lending to banks or money market mutual funds if they faced cash shortages. (OK FINALLY someone says WHY the Aug 2 is the deadline is so important...BUT WHAT ABOUT the 500 BILLION THAT MATURED YESTERDAY, FRIDAY!!!)

But the central bank wouldn't have the ability to lend the government money. It is permitted to buy U.S. Treasury securities, and has purchased $900 billion in recent years as part of its efforts to support the broader economy. But by law it can buy Treasurys only "on the open market," meaning from investors and not directly from the U.S. Treasury. That means the Treasury can't turn to the Fed for cash if it is restricted from issuing new securities to the public by the debt limit.
(THIS PARAGRAPH IS F-UP!!! Our tax dollar taken by the IRS goes to the FEDS which in turn gets sent to the UN like the last 203 BILLION!!! ASK the UN to give it back and spend 87 BILLION of it on Aug 4th! ALSO CONGRESS HANDED 750 BILLION to the FEDS!! in Oct. 2008 at the beginning of this stupid kooked up housing crisis that money didn't say in the USA!!! What happened to the 700 billion bailout in January 2009???)

"I want to eliminate any expectation that the Fed through any mechanism could offset the impact of a default on the government debt," Mr. Bernanke told Congress last week. (SHUT UP beenie!!! you caused this problem!!!)

If Treasury runs short of cash and must decide whether to pay some people (such as overseas bondholders) and not others (such as Social Security recipients), it would need to manage that through the Fed's payment systems. That would be a Herculean task. (PARDON MY FRENCH HERE BUT FUCK OVERSEAS BONDHOLDERS!!! Our USA Elderly had SOCIAL SECURITY FROM THEIR CHECKS ALL THEIR LIFE!!!)

Fed and Treasury officials studied whether they could shut off some payments but not others during the debt-limit debates in the mid-1990s and concluded that the government's systems weren't up to the complexity of the task, said Donald Kohn, the Fed's former vice chairman and currently a Brookings Institution scholar. Given the lengthy process of changing the computer coding in Fed and Treasury systems that would have been required, "it was just impossible to cut off some payments and not others," Mr. Kohn said, but noted he didn't know if the current situation was more flexible.

The Treasury Department's Financial Management Service office processes about a billion payments annually, which works out to more than 2.7 million payments a day and more than 114,000 payments per hour, not including payments made by the military, which are handled on a different system.

President Obama said Friday that he had spoken with his lawyers about whether he could invoke the 14th amendment to avoid having the government default on its debt if the debt ceiling isn't raised. The amendment, among other things, says the validity of the U.S. debt "shall not be questioned."

"They are not persuaded that that is a winning argument," Mr. Obama told a crowd in Maryland.


—Jon Hilsenrath contributed to this article.

Write to Damian Paletta at damian.paletta@wsj.com

Panhead

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dang woman.....I thought I got upset about this stuff....lol....the blue pill sweetie....the blue pill.

MrsCK


Panhead wrote:dang woman.....I thought I got upset about this stuff....lol....the blue pill sweetie....the blue pill.

Blue pill was Krackers problem solve deal....

I only do........

CHOCOLATE!!!!!!!!!!!!!


Told ya when ya read it you could tell I got pissed the more I read it!!

Panhead

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my bad.....I'll get ya a left over chocolate bunny from last Easter......

Panhead

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good article here....read the comments, several are bringing up dinar!!!!!!

http://blogs.abcnews.com/thenote/2011/07/rep-steve-king-no-default-unless-obama-wants-to-punish-america.html

Panhead

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Boehner announced no plan to be released today, hopefully tomorrow...on Foxnews

Panhead

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Obama to meet Democratic leaders at 6 p.m. on debt
Sun Jul 24, 2011 4:57pm EDT

WASHINGTON, July 24 (Reuters) - President Barack Obama will meet the top two Democrats in the U.S. Congress on Sunday on the negotiations on raising the U.S. debt ceiling, the White House said.

Obama set a 6 p.m. EDT (2200 GMT) meeting with Senate Majority Leader Harry Reid and the leader of the Democratic minority in the House of Representatives, Nancy Pelosi. (Reporting by Steve Holland, Editing by Sandra Maler)

http://mobile.reuters.com/article/idUSWNA453120110724?irpc=932

Panhead

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Debt Limit Talks: No Deal Today
July 24, 2011 4:33 PM- ABC News' Jonathan Karl reports:

Negotiations on a bi-partisan compromise to raise the debt limit have reached an impasse, with the two sides deadlocked over whether there would be another vote next year to raise the debt ceiling.

Now both sides are developing their own alternatives and a deal looks highly unlikely until Monday at the earliest.

Later tonight Senate Majority Leader Harry Reid will begin briefing Senate Democrats on a plan that would raise the debt ceiling through the start of 2013, cut $2.4 trillion in spending and include no new taxes. It is designed to be a deal that Republicans would have a hard time turning down, but the cuts will include things Republicans don't like either because they aren't "real" (interest savings, future war savings, etc) or they come out of the defense budget.

As for Republicans, I am told Boehner will present two options: 1) accepting a deal that cuts $1.2 trillion now and leaves the other cuts up to a debt commission but gives the president the full debt ceiling increase now (this will be seen as caving in to the White House); or, 2) trying to pass a Republican plan to that would require two debt limit votes -- one now and one after the commission passes the additional cuts next year.

There are two problems with that second Republican option: They may not have 218 votes to pass it in the House and even if they do, the President has threatened to veto it.


windreader1


Like I said, how bad is bad.

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