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Inside the debt talks

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Jake Tapper of ABC News offers an INTERESTING ACCOUNT of the back-and-forth at yesterday’s bipartisan discussion of the debt crisis.

An excerpt:

Republicans are still insisting on no new taxes. Democrats say they need some revenues – a “balanced approach” – to get Democratic votes.  As House Minority WHIP Steny Hoyer, D-Maryland, said today, “Republicans must be prepared to make concessions of their own and not put the entire burden on seniors, the middle class and the most vulnerable among us.” Hoyer told Cantor “you won’t get one Democratic vote” for his cuts-only proposal.

Congressional leaders will need Democratic votes not only in the Senate but the House as well. “You’ve got the (Michele) Bachmann Caucus that has made it clear they won’t vote for anything,” one Democratic official said.

Boehner said at one point that “it’s clear to all of us how big this spending problem is. Congress keeps voting for programs we can’t pay for. But look, entitlement cuts aren’t easy for us to vote for either. Our guys aren’t cheerleading about cutting entitlements.”

“Your guys already voted for them,” the president said, referring to the budget offered by House Budget Committee Chairman Paul Ryan, R-Wisc.

But the best zinger in Tapper’s account was this one:

“Ronald Reagan would have accepted this plan,” one of the Democratic officials said.

Which brings to mind THIS POST from yesterday.

UPDATE: Here’s ANOTHER ACCOUNT of the talks:

Eric Cantor proposed a series of spending cuts, one of them aimed squarely at college students.

The House majority leader, who did most of the talking for the Republican side, said those taking out student loans should start paying interest right away, rather than being able to defer payments until after graduation. It is a big-ticket item that would save $40 billion over 10 years.

At one point, sources say, President Obama pushed back against the mounting menu of spending cuts while the tax column on the negotiating sheets remained blank. He asked the Republican leaders how they expected him to take their proposals seriously.

“I’m not going to do that,” Obama said. “I’m not going to take money from old people and screw students,” not without some compromise on the tax-increase side.

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17 Comments

  1. Neftali

    This hard line stance from the Republicans is really starting to tick me off. From what I can tell, Boehner has been publicly stating that he doesn’t want new tax hikes, but in his secret meetings with the President, he appears to be considering them. However, the far right crowd led by Cantor (and amazingly, Bachmann), appears to want nothing but cuts. In fact, the Bachmann crowd, being that they’re all complete idiots, don’t want to raise the ceiling at all. As in never. Period. Of course anyone with a little fiscal sanity knows that just isn’t possible. We need to raise the debt ceiling today, but we also need to appropriate cuts in place to prevent further debt ceiling increases.

    David Brooks is correct:

    “If the debt ceiling talks fail, independent voters will see that Democrats were willing to compromise but Republicans were not. If responsible Republicans don’t take control, independents will conclude that Republican fanaticism caused this default. They will conclude that Republicans are not fit to govern.

    And they will be right. ”

    http://www.nytimes.com/2011/07/05/opinion/05brooks.html?_r=1&ref=davidbrooks

    In other words, if we can get over $3 trillion in spending cuts from the Democrats for some minor ideological increases in taxes, then we should jump on it. Call it a victory and move onto the 2012 campaign. What’s the Republican base going to do if there is a few tax increases on the rich? Start voting for the liberals? No chance. Besides, if the Republicans win big in 2012 they can always roll back the tax increases.

  2. Neftali: You’ve had an epiphany of sorts.

    Congratulations!

  3. expdoc

    The Democrats led by President Obama have plenty of tax increases on the way. For what purpose, other than serving up political red meat, do they need more?

    http://online.wsj.com/article/SB10001424052702303812104576438130028027412.html?mod=WSJ_hp_mostpop_read

    We think this was the President’s spend-and-tax plan from the very first. Run up spending and debt in the name of stimulus and health-care reform, then count on Wall Street bond holders and the political establishment to browbeat Republicans into paying for it all. He apparently didn’t figure on the rise of the tea party, or 1.9% GDP growth and 9.2% unemployment two years after the recession ended.

    Last November Republicans won the House and landslide gains in many states in large part because of the deep unpopularity of the stimulus and ObamaCare. Mr. Boehner has a mandate for spending cuts and repealing the Affordable Care Act. If Republicans instead agree to raise taxes in return for future spending cuts that may or may not happen, they will simply be the tax collectors for Mr. Obama’s much expanded entitlement society.

  4. expdoc

    Here is a good analysis of Mr. Obama’s political position and how it differs from his Democratic friends in Congress.

    http://online.wsj.com/article/SB10001424052702304584404576439880232239232.html?mod=WSJ_hp_mostpop_read

    Let’s stipulate at the outset that both Messrs. Obama and Boehner have been searching for a big deficit deal for the most important reason of all: Both think one would be good for the country and its economy in the long run. Both deserve credit for that.

    Beyond that, deficit cutting is good politics for Mr. Obama right now and as he seeks re-election next year. Many Americans fear their country is out of control, which isn’t a good environment for any sitting president. To the extent rising deficits and growing debt contribute to that feeling, reversing the trend line in a dramatic way would be a good thing.

    That’s less true for congressional Democrats, who worry more about protecting entitlement programs and domestic spending beloved by their party’s base. But for a president eager to win back independent swing voters, deficit cutting is a net plus. It’s worth noting that the biggest influences on the president as he navigates this issue are Treasury Secretary Tim Geithner and White House political adviser David Plouffe, both of whom are convinced, for different reasons, of the virtues of deficit cutting.

    Mr. Obama also knows that, in any deficit-cutting deal large or small, he’s going to suffer with senior citizens, a group with which he already has problems. Even a smaller deficit deal will require some trimming in Medicare spending. Democrats will pounce, and Mr. Obama will have to absorb it.

    So from Mr. Obama’s perspective, if you’re going to take the pain for a deficit deal anyway, you might as well get real gains along the way. In a phrase Mr. Biden has been using, “There’s no point in dying on a small cross.” That explains why Mr. Obama has been prepared to discuss with Mr. Boehner significant changes in how Medicare functions, including the possibility of adjusting the age of eligibility.

    A big deficit deal also would allow Mr. Obama to say to Democratic constituencies that, even if they’re unhappy with him, he at least put their most cherished programs—Medicare and Social Security—on sounder financial footing for a generation to come.

    But perhaps most important, the big deal would clear the decks for Mr. Obama to focus on other pursuits, without having deficit problems constantly nipping at his heels. If he wins a second term, you can be sure he would rather think about alternative energy, education and immigration than be nicked and cut at every turn by deficit problems.

  5. concerned citizen

    In the past few years, debt ceiling votes have passed the House and the Senate without question by the majority party. When Republicans controlled the chambers during the Bush era, they passed debt ceiling hikes with the majority of Democrats in opposition of raising the limit. And when the Democrats regained power, they upped the debt ceiling while the Republicans opposed it. What is obvious is that both parties have at times opposed increases in the debt ceiling and even President Obama opposed it when George W. Bush was President in 2006,

    The fact that we’re here today to debate raising America’s debt limit is a sign of leadership failure. Leadership means ‘The buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.
    The economics behind raising the debt ceiling has been clouded by political bickering and blame, so it is of necessity that the public understands what the debt ceiling is.

    What is the Debt Ceiling?

    The debt ceiling is simply a limit of how much a government can borrow and owe in public debt. The current public debt of the United States government is $14.66 trillion, about 99% of the GDP of the country. As a percentage of GDP, the current public debt has never been as high as it is now with the exception of the period during the Great Depression By increasing the current debt ceiling, the President would be able to avoid spending cuts and would be able to please his constituency. At the same time, the President would be passing the onus of paying for the debt, in his own words, “onto the backs of our children and grandchildren.”

    The Fallacy of Default

    Default, by definition, occurs when debtors do not meet contractual obligations to make payments towards the debt or are unable to. Not raising the debt ceiling will not result in default as uneducated, political apparatchiks have stated that it will. A default would only occur if interest payments were not included in the budget.

    A solid limit of how much debt the nation can accrue will force the administration to work with Congress in creating a balanced budget. The US government would not have to increase the public debt if it spent only what it took in through taxes and other forms of revenue. The issue that the Obama Administration has and that the Bush Administration had with opponents of the debt ceiling hike is that their rhetoric would force spending cuts. It might mean that President Obama would have to stop spending $2 billion per day bombing Libya.

    In the end, whether the debt ceiling hike passes or not, the unelected Federal Reserve, as it has demonstrated throughout the past decade, will, without Congressional authority, simply continue to create more and more money. The debt ceiling issue is a facade veiling the real issues of the unsustainable fiat monetary system of the United States and the fact that the Federal Reserve cares not whether the debt limit is raised or not.

    Bear in mind, that the majority of the US debt isn’t owned by any foreign country, it is owned by the Federal Reserve. China may own the largest chunk of foreign debt, but it owns merely a fraction of the real debt.

    i cannot beleive ANYONE supports raising the debt ceiling….why not just tell your kids teh truth when they are born ; that they are born into a caste system of economic slavery.

  6. concerned citizen

    while You bozos argue about left/ right issues,….maybe you should read this :

    http://en.wikipedia.org/wiki/Left_right_paradigm

  7. concerned citizen: Your comment No. 5 is lifted entirely from another Web site without credit or attribution.

    Let’s not have that happen again, all right?

    Better that you would paraphrase the article at issue or provide an excerpt and than offer a link. In this case, you’ve just lifted the whole thing verbatim and passed it off as your own stuff.

  8. doc: Just like Neftali, you seem to have experienced an epiphany of sorts.

    Five days ago, you flatly declared here that Obama had “no real intention of fixing an actual fiscal crisis” in the debt negotiations.

    Now, you approvingly quote from a column that includes this paragraph:

    “Let’s stipulate at the outset that both Messrs. Obama and Boehner have been searching for a big deficit deal for the most important reason of all: Both think one would be good for the country and its economy in the long run. Both deserve credit for that.”

    That’s a big leap from accusing Obama of having no real intention of fixing the crisis to acknowledging his quest for a big deficit deal for the good of the country.

    One other thing: The piece by Gerald Seib to which you’ve linked and from which you’ve quoted fails to make any detailed mention of how Boehner’s quest for a big deficit deal is hopelessly hamstrung by the anti-tax zealots in his Republican caucus. Rather, Seib’s analysis is devoted almost entirely to Obama’s dealings with his Democratic base.

  9. expdoc

    It really comes down to what Mr. Obama learned on the golf course with Mr. Boehner doesn’t it?

    If he learned and believes that Boehner cannot approve of any plan that includes more tax increases, then Mr. Obama really doesn’t want to fix/or believe that there is a debt crisis.

    If he believes that Mr. Boehner has room to negotiate some tax or revenue increases than he is negotiating in good faith and for the political reasons mentioned above, would love to get a longer term, “big solution” to the problem.

  10. expdoc: Now you’ve experienced a relapse. Now you’re spouting your usual nonsense.

    What you’re saying here is that Obama is negotiating in good faith only if Boehner can show some flexibility on the revenue issue. If Boehner can’t show the kind of flexibility Obama has shown on the spending side, then it’s all Obama’s fault.

    Of all the stupid arguments you’ve offered here, doc, that one takes the cake.

    If Boehner’s inflexibility blocks the path to a deal, Obama is to blame. In-freaking-credible!!

    If you tried that argument in a middle-school debate, they would laugh you off the stage.

    (I’m going to take a break for a few hours. The doctors have warned me to avoid situations of extreme hilarity. I’ll be back when my sides stop splitting.)

  11. expdoc

    No, you misunderstood what I said. Boehner is representing the Republican controlled house. He may personally want to compromise but at some point he has to have the votes to get a deal to pass.

    If Boehner is telling Obama that he cannot get enough votes to pass any deal that includes a significant tax hike, and Obama is choosing to only agree to any deal that includes a trillion plus in tax hikes, then he is not negotiating, he is posturing.

  12. Give it up, doc. You’re only digging yourself into a deeper hole.

    You continue to maintain that it’s all Obama’s fault if Boehner can’t make any concessions on the revenue side. You continue to maintain that Obama is not engaging in good-faith negotiations if he doesn’t completely cave to the demands of the wingnuts. According to you, the Repubs don’t have to give an inch. The onus is entirely on Obama and the Democrats.

    I can’t believe that you’re actually that stupid. You must be pulling my leg.

    Ask yourself these questions: Which side has been willing to make concessions? Which side has been unwilling to make concesssions?

    Now tell me again that it’s Obama’s fault that no deal has been reached.

  13. expdoc

    This time it will be the fault of Obama and the Republicans in the house.

    It will also be the fault of every single elected politician who has continued to take the easy way out and vote for increases in spending at a rate faster than revenue that they could collect over the last several decades.

    It is a failure of leadership with responsibility to be shared by all.

    The inevitable pain will also be shared by all of us.

    Buckle up for a nasty ride friends.

  14. Nice try, doc, but you’re still wrong. You still want to blame Obama at least partly for the lack of a deal on the debt. That’s absolutely ridiculous.

    None of the blame is Obama’s. He’s made great concessions and has proposed a deal that even Ronald Reagan would have accepted, as one of the participants has noted. He’s risked the wrath of his own political base. He’s called for bipartisan compromise at every turn.

    The Republicans, on the other hand, have offered no concesssions whatever. None. Zip. Zilch, Nada. They’ve scoffed at the notion of compromise. The only bipartisanship they’ll accept is a total capitulation by the other side. They are extremists who reject the time-honored American principle that politics is the art of compromise.

    You are such a pathological Obama hater that you can’t even recognize the overwhelming evidence that the Republican zealots are entirely and completely to blame for the stalemate in the debt negotiations.

    Obama has gone way out of his way to strike a compromise, but your extremist friends have only spit on his offers.

  15. expdoc

    Once again, you don’t read so well. I suspect you spent the afternoon in the sun at the AFSCME protest.

    As they say, it takes 2 to tango, and the only reason their is a stalemate is because both sides can’t yet agree.

    Could the Republicans cave on more tax increases and end the stalemate? ISure, but so could Obama agree to address what is really a spending problem )to no small extent caused by spending he has approved in his short time in office) and deal with new taxes later on.

    Now lay down and put a cool cloth on your forehead until your heart rate returns to normal.

  16. doc: That is one incredibly lame argument. None of the facts are on your side, as I’ve made amply clear in my foregoing comments, so you resort to this little pile of unintelligible crapola.

    You say “the only reason their [sic] is a stalemate is because both sides can’t yet agree.” That’s insane. One side, the Dems, are willing to make massive concessions on spending. The other side, the Repubs, are unwilling to make any concesssion whatever on revenues.

    Hence, responsibility for the stalemate is entirely on the Republicans. It’s not that “both sides can’t yet agree,” as you put it. It’s that one side — and one side only — can’t accept a deal of historic proportions. And they can’t accept it because they are soiling themselves in fear that the Tea Party loonies will wreak revenge on them in Republican primary elections. It’s that simple — even if you can’t understand.

  17. expdoc

    It’s a spending problem, not a taxing problem.

    As has been demonstrated before, federal tax revenue as a percentage of GDP stays at about 19%. Unless the GDP grows, the amount collected is going to be about the same irregardless of new taxes.

    The drive for tax increases from Obama and the Democrats is purely out of ideologic blindness and has nothing to do with the actual accounting involved.

    In order to fix the deficit, spending will have to be decreased by trillions of dollars. This will happen now or it will happen later no matter what happens with elections or the current negotiation. This will also necessarily involve entitlement reform.

    You act like somehow this entire situation gives me pleasure. Nothing could be farther from the truth. In fact it gives me some mild degree of anxiety and anger to realize that the fiscal irresponsibility of the politicians and leaders of the last generation will not be paid for by them, but rather by mine and my children’s generations.

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