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It was John Boehner who invoked the spectre of the “Asian markets” by saying that he would deliver a framework deal on how to increase the debt limit by Sunday night. Once you do that, there’s nowhere else to go. If no announcement is made, the Asian markets will most certainly react negatively. If the announcement is seen as unworkable or inadequate, they’ll drop too. This creates rather than arrests a crisis.
And it appears that Boehner’s gambit is to call President Obama’s bluff on a short-term debt limit increase. This was really the only option available to Republicans to avoid the entire blame for default.
House Speaker John Boehner (R-Ohio) is set to call the Democratic Party’s bluff on the debt ceiling. The Ohio Republican, in a briefing with his conference on Saturday, announced that he would press for a short-term deal, with major spending cuts paired with longer-term deficit-reduction strategies, as a way around the current impasse.
That strategy puts the speaker directly at odds with the White House and allied Democrats, who have insisted for weeks that they would not support a short-term extension of the debt ceiling. The president went so far as to dare House Majority Leader Eric Cantor (R-Va.) to test his opposition to a temporary deal during a tense meeting more than a week ago.
Whether that rigidity will fade as the Aug. 2 deadline to raise the debt ceiling nears is a big gamble on Boehner’s part.
Apparently this short-term increase came up in the White House meeting yesterday, and the President said he wouldn’t sign it because it would lead to a debt downgrade. The shadow of Standard and Poor’s is looming over this entire deal now.
The idea Boehner has is essentially that two-tiered process we’ve been hearing about. In the first tier, the $1.5 trillion in agreed spending cuts would be executed, along with a $1.5 trillion increase in the debt limit. In the second tier, there would be a “Super Congress” created, essentially a Catfood Commission II, whose recommendations on entitlements and taxes would be fast-tracked to the floor of each chamber for an up-or-down vote. The debt limit would be raised after those recommendations were delivered to Congress and voted upon.
I think the only change that Obama and the Democrats want to this setup, which is essentially McConnell-Reid, is that the debt limit increase is guaranteed up front. So the first-tier vote would extend the debt limit through the 2012 elections, and execute the spending cuts. The Catfood Commission II – the Recattening – would still come into being, and their recommendations would still be fast-tracked. But the debt limit wouldn’t be tied to that vote.
Obviously, decoupling the debt limit increase from the Catfood Commission II would make it easier to vote it down. But if the President wanted the debt limit separate from deficit reduction, they should have thought of that weeks ago. Clearly the President wanted to use this leverage for the last several weeks to get a grand bargain.
And Boehner’s gambit would put the President in the tough position politically of having to veto a solution to the debt limit crisis. I don’t know that it would get there, since Harry Reid seems aligned with the President on this point. Reid said in a statement last night after talks broke off, “(Republican) unwillingness to compromise is pushing us to the brink of a default on the full faith and credit of the United States. We have run out of time for politics. Now is the time for cooperation.”
Boehner does appear to be more concerned with getting his party out of their political box, and shifting blame. The deal he has on the table would probably be amenable and passable if the debt limit were dealt with up-front. It’s a pretty raw deal for Americans, as it shifts accountability for cuts to the social safety net to a small group of 12 legislators instead of the Congress as a whole. Not to mention the fact that it achieves austerity in the face of a jobs crisis. But it does look like a political ploy on the part of Boehner. And by invoking the Asian markets, he’s using the threat of a financial shock to do it.
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From Washington Post:
“Then Congress would go to work to produce as much as $3 trillion in additional savings through an overhaul of the tax code and major changes to Social Security and Medicare, the biggest drivers of federal spending.”
Is Boehner still responsible for $800 billion (using static analysis?).
Even with $800 billion in NEW revenue that would leave all the rest of the $2200 billion coming from Medicare and Social Security???? WTF!
Social Security savings if any shouldn’t even be counted for current deficit reduction. How can any Democrat vote for this?
O/T.
McCain was roundly criticized for not being able to give a straightforward answer to the question “how many houses do you own?”.
Now, suppose someone came up to you and asked “how many wars is your country currently fighting?”. I’m not sure I have a straightforward answer for that one.
Is there really still any convincing reason that Republicans won’t be forced back to the table to sign off on the $4 trillion big deal? I think it’s going to happen.
That information is classified, and the NSA is taking count of all who guess.
If the Dems support any part of this plan, not only Obama, but they too should be targeted for replacement. Creation of a super congress would give total control of this country to big business. Instead of buying 535 people, they would only have to bribe twelve. Can anyone name twelve honest politicians for this congress? Besides we all know who would be running this farce, none I would trust around my billfold while I was sleeping.
I’m pretty sure I’m on all their lists already. A 12-year-old could figure out my real information in 20 minutes, so the NSA could easily do it in six months.
What is better?
1) Congress locked in debt limit hike debate a year from now, kept in session by Harry Reid (who isn’t running) and Washington locked in debate over cuts while Democrats seeking a first term are attacking on the lack of jobs, and Obama dominating the news cycle with Republicans in the final race to the convention trying to position between slashing and jobs
2) Democrats forced to cut now to get the debt limit increased and beginning immediately to attack Republicans for killing jobs and throwing the poor, la dee da under the bus for tax cuts for the people who have lots of wealth and high paying jobs while doing nothing to fix the broken roads and jobs and water systems and jobs and levies and job and climate change and jobs and green energy and jobs.
Nothing that Congress passes today binds the future Congress when it comes to cuts in spending. Hikes to entitlements bind the Congress once they go into effect and benefit millions broadly. NO ONE NOT EVEN TEA PARTY IS CALLING FOR REPEAL OF MEDICARE DRUG BENEFITS!
uh, the Asian markets have tanked before and the world kept on keeping on so what’s the worry? I am SOOOOOO tired of the concern for ‘markets’ and people being given short shrift.
At this point, I’m for a so called ‘default’ as that will certainly wake up many U.S. citizens from their comfortably numb status. Especially in view of the alternatives available besides Congressional action. And when Obama says his lawyers don’t think they would prevail in a court case, he’s really saying Timmy doesn’t like the idea. If Bush can find lawyers who provide ‘cover’ for torture, why can’t Obama find lawyers to provide him cover for the 14th amendment?
Besides, once it’s done, it’s done and all a defeat in court would do is restrict a Presidency AFTER the fact of the debt ceiling being raised. AND ,in fighting the court case, the constitutionality of the debt ceiling legislation could be called into question.
Does Obama have the balls to go all 14rh Amendment on Boehner’s ass?
Do his Big Money Masters have to balls to tell him to do so?
Obama’s the one who decided to tie the debt limit vote to his “Grand Bargain”, and now that it’s all gone horribly wrong he has the nerve to accuse to the Republicans of “playing politics” with the debt limit? I wonder if the establishment media will ever figure out what a monumentally bad calculation Obama made.
Obama has been calling for “fixes” and cuts to SocSec and Medicare since he began his run for the presidency.
He is the main mover in this right now, what with Pete Peterson not saying too much about this mess (which I find interesting in itself).
Hhhmmm. I do wonder how Obama would answer “How many wars do you have going on right now.”
He’d hem and haw, filibuster, and name the bigger ones. He’d deny Libya is anything more than a “kinetic action.” And so forth.
I hope some of our legal eagles are checking the constitutionality of the Gang of 12 idea. I don’t know where the authority comes from to create something like a conference committee without instruments (bills) before the committee. That’s just one of the problems. Never mind that it’s simply a chickenshit idea designed to disenfranchise the entire nation while protecting the selfish chumps out to protect their incumbency at the cost of the republic.
BTW, how does the $16.1 Trillion the Fed loaned to the Too Big To Fail banksters fit in to any debt or deficit figures?
GAO Audit report is out.
If the Fed can do something like this, why doesn’t it take on this situation, which may be as serious –or not–or more so– as the bank failures?
It took about 3 years after the crash in 1929 for the stock market to hit it’s real lows, and the American economy really come to a grinding halt. Since Obama and the Congress are basically repeating what Hoover and the Congress did back between 1929 and 1932, why would any sane person think the outcome will be different this time.
It seems the new bogeymen who showed up Friday are the rating agencies and the Asian markets. Can anyone point to any country that prints it’s own currency seeing interest rates skyrocket up because what the rating agencies say? Japan doesn’t have a AAA rating, yet can borrow at ultra low long term rates around 1.5%, and with a debt around 200% of GDP. Greece got screwed because they turned their currency over to Europe. Same goes for Ireland and Portugal.
As to the Asian markets, the Nikkei futures just opened a whole 10 points down.
Don’t get me wrong, it’s important to raise the debt ceiling, but if raising the debt ceiling comes with big austerity plans, a group of 12 Congressmen running the show, and having the rating agencies (aka banksters) telling us what is enough “austerity”, I’m pretty sure thats not a good deal.
It’s time for voters to take iron-clad pledges, such as to never vote for any pols, especially Dems, who mess with SocSec and Medicare/Medicaid.
It might be helpful to list the corp donors and lobbies the 12 receive $$ from in terms of how much they are bought and sold to parties that will totally benefit from their Super status.
Boehner’s super congress is discriminatory. There are three parties in congress, not two. Allowance has to be made for seats at the table for ALL parties. Go Bernie, give’em hell!
Constitutional scholars, is this “Super Congress” constitutional?
We need to tell our Congress Critters that SocSec and Medicare are very, very different from base closings.
But oligarchs and aristocracies do like secret, closed door decision taking. With rushed, muscled up or down votes. If there are any votes.
It seems the ratings agencies take their cues from them’s as pays ‘em; same with Obama.
So, are the same Powers That Be telling Obama what to do as are telling the ratings agencies what to do? How coordinated is this oligarchic command and control?
h/t evernewecon:
http://krunchd.com/beersmightharm
A great read.
It is evident that Boehner and every other Republican in Congress is intent upon deliberately forcing a default. They are doing everything in their power to collapse the economy, throw us into a depression, and bring about the end of the United States of America. That is Treason. Will 0bama continue to play patty-cake as our country is destroyed by traitors? If he does, then he is a traitor, too. It’s time to break out the guillotines.
It’s like they are going out of their way to find new ways to make our heads explode.
This Super Congress is dangerous and unconsitutional. AND it codifies the two-party system. I can see why elected officials love the idea, but why on earth would Americans accept it? We may be too stupid as country to survive.
You don’t need twelve – just one Republican, and you can be sure Obama will name C-nt Kondrad or Dickless Durbin.
I guess I’ll be the contrarian about this “Super Congress” thing, because I don’t see what the big deal is.
Whether it was 12 “Super Congressperson” or 10 Corporate CEO’s or 5 down and out poor folks coming up with the legislation, the fact is it still has to be voted on by our Reps and Senators and signed into law by the President.
As far as rules regarding amendments and such are concerned, hey, both Houses already get to set the rules up the way they want to anyway, that’s specifically said in the Constitution. So if they set up rules that says these 12 guys/girls will come up with proposed legislation and there will be no amendments to allowed, so what??? There are times now when they use rules to not allow amendments.
At the end of the day, each Congress person and Senator has to vote on it. That’s where the accountability is. Or would be, if we had an actual democracy. I guess I think there’s bigger problems with our democracy than some rules they come up with on how proposed legislation is handled.
Or tolerate for one minute this Central Committee scam.
victoria
Every representative is supposed to have equal input or people represented by those who don’t are disenfranchised. Gang of 6 bills and think tank bills were bad enough because the overall framework was laid as a practical matter. But at least other reps not in the discussions could amend them.
I’m a Ron Paul supporter, and we need to coordinate on this. This is unacceptable.
So Bill Clinton looks at the “debt limit crisis” and looks at the 14th Amendment, and says he would unilaterally invoke it “without hesitation” to raise the debt ceiling “and force the courts to stop me”.
http://www.nationalmemo.com/article/exclusive-former-president-bill-clinton-says-he-would-use-constitutional-option-raise-debt
But Obama on Friday rejected the idea, saying “I have talked to my lawyers …They are not persuaded that that is a winning argument.” – Thank God Hillary is not running things, because she might not respect the need for bi-partisan certainty so as to avoid possible court battles and the displeasure of some on Wall Street – heck some on Wall Street might not buy US bonds if the 14th Amendment was used, or so they say.
But the 14th Amendment (“The validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion shall not be questioned”) has been tested in the Supreme Court and appears to be strongly on point and in favor of Obama using it to declare the debt limite void. http://supreme.justia.com/us/294/330/case.html Chief Justice Charles Evans Hughes wrote for the court in 1935, saying: “While this provision was undoubtedly inspired by the desire to put beyond question the obligations of the government issued during the Civil War …its language indicates a broader connotation.” Yale Law professor Jack M. Balkin said “You’re not supposed to hold the validity of the public debt hostage to achieve political ends….Section 4 is a fail-safe that only comes into operation when everything else is exhausted.”
But the White House that while Former Law Professor Clinton (he taught Admiralty, International Trade Law as Hillary taught Criminal Law, Criminal Procedure and the “prisons project at The University of Arkansas Law School in the 70′s), the University of Chicago lecturer hears other saying it might only apply to Congress (seems passing an unconstitutional debt limit fits) and only to outright default on existing debts. Of course Obams “war” actions and non-prosecution of Bush folks means he understands that the president may do what he wants in an emergency – doesn’t need no 14th Amendment. http://www.nytimes.com/2011/07/22/opinion/22posner.html?src=ISMR_HP_LO_MST_FB But perhaps this does not apply to Wall Street. While Obama worries about Court review, Harvard Law Professor Larry Tribe, in agreement with Professor Balkin, says: “This is not a circumstance in which the courts have any plausible point of entry.” Seems courts do not like political questions.
Of course if you show a backbone, you may not be bi-partisan.
So, how soon can we have that $6 trillion dollar coin minted and sold to the Fed – a course about which we all agree there are no legal problems?
Or must the dance to justify screwing the aged and sick go on?
OK, but what’s stopping Senators and Reps not in the “Super Congress” from proposing their own bills on the subject at hand??? If they can’t offer amendments, they can offer alternative bills can’t they??? I don’t see anything, other than politics, stopping them from doing that?
I dunno, I guess I’m missing something here. My bad.
I’ve a feeling rp12, that we, the people, are going to need to cooperate on many things in the coming days, months, and years, and that labels are essentially meaningless when the actual survival of human beings AND of democracy is at desperate stake.
DW
Boehner wants a short term solution? Get the backing of all your cohorts to a defunding resolution for the middle eastern occupation and combat experience. A minimum saved in 2012 of a $100 billion. While you’re at it, demonstrate you’re willing to take the heat for some of this.
There are too many false equivelencies in the conservative arguements. No one calls them on it. Run the government like your own budget? They do. Mortgages are an example. 7 year car purchases are an example. Of course, if I suggested that I’d trim my work hours to make it so my income would go up and I would have more to pay my bills, the local white coat squad would be coming to my door.
“If they can’t offer amendments, they can offer alternative bills can’t they??? “; no they can’t, that’s what the ‘fast track ‘authority” is all about.
Option one is closest to no change – so I choose #1.
Of course you may be into #2.
Post the disaster, complain – the voters will reward you for screwing them because you were forced to do so. And no one blames the incumbent when the economy sucks and does not appear to be coming back quickly as in 1984. And Austerity will only kill job growth for a little while – it should come back under the new GOP President, and GOP House, and GOP Senate.
the repubs will not allow Obama to exit this episode unscathed. Any deal with Obama was always off the table with these morons. Obama has no clue who he is dealing with. Repub House actually wants to crash the economy, that’s their goal, and Obama gets the blame in ’12. Obama’s involvement as the GREAT CENTRIST COMPROMISER was not even politically advantageous. The country is solid majority behind tax increase for rich, corps and pentagon cuts, hands off social programs. All the knucklehead had to do was read the polls, structure his offer on voters’ preferences, then threaten the 14th if obstructed. He would have walked away a hero and insured his reelection. This white house cannot even interpret polling data to use to their advantage. They deserve to be defeated, and tea party America with their fat brokerage accounts also deserve a major haircut. Crash the markets, the rich hold 80% of the stocks.
All political theater. A big charade. Take back Bush/Obama tax cuts for billionaires and millionaires and the problem is largely solved.
Probably not… but neither is torture, or the war in Libya etc etc etc. What Constitution?
Keep in mind that all solutions proposed are “short-term” – it’s just a question of how short-term. If there’s some “grand bargain” now cutting Social Security and Medicare while engaging in regressive tax increases, it doesn’t stop it from this happening all over again in 2012 or 2013 where we get ourselves on a death spiral of more and more Social Security and Medicare cuts every year or so…there’s no permanent solution on the table by either Democrats or Republicans.
.
Ahh, and now it starts.
I predicted this yesterday.
You can see how they are framing the issue with false choices. Oh, and the spectacle of “fixing it later” too. Remember that folks???
It’s starting…
The DEMOCRATS and OBAMA are going to cut your EARNED BENEFITS, which DO NOT AFFECT THE DEFICIT by a penny. Now, what are you going to do about it??? Reward them with your vote next November????
If so, then you DO DESERVE (sorry Kelly) to lose those benefits.
“Repub House actually wants to crash the economy, that’s their goal, and Obama gets the blame in ’12″
Obama and the Democrats could have taken care of this after 2008, but instead they wanted to spend their time making backroom deals with corporate lobbyists since paydays for corporate lobbyists was a more important issue than this to them.
The Constitution of the United States of America, was effectively scuttled by Bush v. Gore, in the year 2000.
DW
Ugh. I was having such a nice day until I read this. Anything but a clean debt ceiling increase in unacceptable. Come on Teabaggers, only you can stop this. Smother any Boehner deal with your angry sweaty ball sacks.
Right. That is what blew up the deficit. That and the two wars. All of the things that are NOT on the table.
Hey, Kilgour, you’re right about the republicans and Obama. Sorry arses the lot of them. Obama is so wrapped up in himself that he doesn’t get it that the opposition has been hellbent on taking him, and everything around him, down since day one.
Saw you took a beating being honest over at HP with your new sock there. The Obama cheerleading section doesn’t tolerate tough love being advocated. Didn’t you have a sock there before?
I believe Shock Doctrine comes to mind.
Everyone who hasn’t already really needs to read that book and Confession of an Economic Hitman It will give you a play-by-play of exactly how this has and will play out.
You make a valid and probably a good, poit. I don’t know where I come down on this but in the end don’t see it as THAT big a deal compared to what the policy decisions will be. There aren’t 635 people going to thje white house to negotiate right now. a group froim the leadertship is, brings it back and there will be a vote if the deal gets by the respective caucuses. how would it be different with Catfood II. If the rank and file can’t stomach it, their recommendations won’t pass an up/down vote. so it isw now. If reid and Boner can’t sell a deal, it doesn’t pass. Am I (and OFG) wrong??
I could care the f*ck less about boner but appreciate that wiser folks here predicted where boner would go and hell if he didn’t, congrats on that.
Obama calls social security, medicare and medicaid “sacred cows”. Why the f*ck does even one single intelligent free thinking person give him the benefit of any doubt?
Zinn said Obama would not only be mediocre but dangerous. I think that criticism should apply to both Parties who are not hiding their betrayals, not just this malpractic-ing President.
“Smother any deal.. with your…” My brain recoils.
Much as we might fervently wish to think otherwise (and I do, oh believe me I do) it is beginning to appear that Baghdad has already been bombed; we just haven’t seen the depleted uranium sparking in the horrid explosions as yet.
How could not CinC’s devastating proposal to trade with the opposition by means of programs which have nothing to do with the scenario at hand, and his refusal to guarantee the continuation of sustaining good faith and credit with respect to senior retirees and the disabled have any other result than to undermine the stability of this nation?
This and this alone is going to have huge repercussions no matter whether we nab the terrorists or not.
I have been contemplating the sufficiency of something stronger than just pledging not to vote in 2012 – who knows where we’ll be in 2012? I suggest a combined citizen’s arrest of this man and his immediate impeachment on the grounds that he has gone against his oath of office (admittedly delivered behind closed doors but still applicable) to uphold the Constitution. Other posters have questioned the Constitutionality of not sending out Social Security checks in August. I think there is a sound argument to be made, and you can bet this issue is going to strike home forcibly in a matter of days. Then it won’t matter who voted for what or who vetoes what.
In fact, impeach the lot of them!
No kidding, take back the tax cuts for billionaires, get out of all the losing wars, raise the salary cap on SS, and give everybody access to Medicare (and then fix Medicare) and debt problems go away.
And what does any of this have to do with a voice vote to raise the debt limit? Nothing.
http://www.ritholtz.com/blog/2011/07/national-debt-ceiling-explained-in-one-graphic/
This is nothing but kabuki TARP 2.0 to screw the American people AGAIN:
Ronald Reagan, Sept. 1987
O/T, did you see the Comments section to the blog you linked too???
That was too funny!!!!
Here’s how it introduces the comments section:
That’s just funny stuff…
By the way, Barry Ritholtz (runs The Big Picture blog) is a conservative, and runs an investment fund. His views of what’s being done to the American public in the name of protecting Wall St have more in common with the ideas of the DFHs than the Republican or Democratic party.
Sorry but both your option 2 is self-contridictory nonsense -
You cannot vote for something and then run against the thing you voted for. Reps sometimes get aways with this but Dems never do -
and re: your option #1:
Besides the fact that there are presious few first term House Dems we have to care about the nuts and bolts of this thing have got to be handled soon. If the loons in the Rep Party continue to say no the shit will hit the fan in the next 3 to 4 weeks. By next year’s election if this hasn’t been dealt we we will probably be in a full scale depression.
There’s a reason they call him Boner.
Well, I said I guess I must be missing something…
Still unsure of whether this is some big Constitutional problem or not though.
Certainly assassinating US citizens without due process and ending habeas corpus are IMO. As is the President declaring war on Libya (by attacking Libya) unconstitutional.
This one doesn’t seem as cut and dried as those IMO. Maybe I’m still missing something though.
Sadly I think I know how it will play out. But time will tell.
They can’t show that cutting Social Security benefits or raising retirement age will actually cut the deficit or pay down the debt. So, there’s no reason to discuss it at all.
No, the debt grew when Bush doubled ‘defense’ and did Medicare Part D and cut taxes and then blew up the economy which killed a lot of business and tax revenues from everyone.
Obama & Dems have done a lot to fix the economy and pay for Medicare Part D (see PPACA health care reform). Now we need to selectively raise taxes (or revenues) on the wealthy & corporations by ending tax loopholes and equalizing tax rates & such and working like crazy to end our wars.
Republicans are against those goals.
“Obama & Dems have done a lot to fix the economy…”
Sure they have. I can almost feel it.
I just had to add my two cents worth. So now we’re to be governed by two houses of Congress, both House of Representatives and the Senate being elected representatives of the People. Now, in addition, we’ll have, let’s just call it what it is, a Central Committee. What else can we adopt from the failed Soviet Union as this ship sinks?