Boehner & Obama Negotiate Ending FAA Impasse: Should Obama Trust Him?

Obama, Boehner discuss ways to break FAA funding stalemate

President Barack Obama called House Speaker John Boehner to discuss ways to break the current political stalemate over funding for the Federal Aviation Administration, White House Press Secretary Jay Carney said Thursday.

"Conversations continue as we look for ways to resolve this," Carney told reporters. "We hope a solution can be found." The president's call to the speaker occurred Wednesday, he said.

The impasse has resulted in the furlough of roughly 4,000 aviation workers, as well as tens of thousands of additional layoffs in the construction industry and elsewhere.

The FAA has also been unable to collect federal taxes on airline tickets -- leading to a revenue loss of approximately $30 million a day. If the dispute continues until Congress returns from its summer recess in September, the federal government will be out more than $1 billion in revenue.

Transportation Secretary Ray LaHood has been urging members of Congress to return to Washington from their summer break and, at a minimum, pass a temporary funding measure allowing the FAA and other workers to return to their jobs.

"They talk a lot about jobs. They give good speeches about it. I want them to walk the walk," LaHood told CNN Thursday.

"Put hard-working Americans to work so they can get a paycheck just like Congress is receiving on their vacations."

The Democratic-led Senate went on its summer recess Tuesday without approving what would have been the 21st short-term funding extension for the FAA. The Republican-led House previously passed a short-term extension, but included some changes opposed by Democrats.

The dispute over the extension involves language in the House proposal that would reduce or kill subsidies to rural airports, specifically targeting some in Nevada, Montana and New Mexico -- three states with influential Democratic senators.

A larger dispute behind the scenes also is a cause for the inaction. Republicans oppose a recent National Mediation Board decision backed by Democrats that makes it easier for airline employees to unionize.

The board's ruling made passage of a vote to unionize dependent on getting more than 50% support of those voting. For example, if a company has 1,000 workers but only 200 take part in the vote to unionize, the rule change would require 101 "yes" votes for it to pass.

Under old rules, more than 50 percent of all workers eligible to vote -- or 501 "yes" votes -- would have been required for it to pass. Workers who didn't cast ballots were counted as having voted "no," making it more difficult for supporters to succeed.

Sen. Orrin Hatch, R-Utah, told CNN Wednesday he blocked a short-term compromise bid proposed by Democratic and Republican colleagues because of the organized labor issue.

At a news conference Wednesday, top Senate Democrats blamed Republicans for the work stoppage.

"This issue has nothing to do with essential air services (at rural airports) and everything to do with a labor dispute between airlines and the American worker," said Senate Majority Leader Harry Reid, D-Nevada.

In response, Rep. John Mica, the Florida Republican who chairs the House Transportation Committee, said Senate Democrats have only themselves to blame.

"Senate Democrats had a House-passed FAA extension before them for two weeks but chose to do nothing," Mica said.

But LaHood said controversial items didn't stop lawmakers from passing extensions on other occasions.

"If you've got issues with labor, if you've got issues with money going to small airports to help airlines fly in and out, work that out," he said. "Don't hold the American jobs and American people hostage over controversial issues that were not a problem on 20 other times when Congress passed an extension."

As the dispute drags on, numerous FAA employees are being forced to dig into personal savings, prioritize their bills, and cut back on expenses in order to avoid financial devastation.

"We're pretty much going to burn through all of our savings within a month and ... now we're working on programs out there to give us no-interest loans," said Mark DePlasco, one of the furloughed employees.

"I don't think any of us can even fathom going without a paycheck for another month and a half or even longer."


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Sources: CNN, Wikipedia, Google Maps

Obama Negotiated W/ Terrorists (Tea Party); Made Them More Radical!

Tea Party’s War on America

You know what they say: Never negotiate with terrorists. It only encourages them.

These last few months, much of the country has watched in horror as the Tea Party Republicans have waged jihad on the American people. Their intransigent demands for deep spending cuts, coupled with their almost gleeful willingness to destroy one of America’s most invaluable assets, its full faith and credit, were incredibly irresponsible. But they didn’t care. Their goal, they believed, was worth blowing up the country for, if that’s what it took.

Like ideologues everywhere, they scorned compromise. When John Boehner, the House speaker, tried to cut a deal with President Obama that included some modest revenue increases, they humiliated him. After this latest agreement was finally struck on Sunday night — amounting to a near-complete capitulation by Obama — Tea Party members went on Fox News to complain that it only called for $2.4 trillion in cuts, instead of $4 trillion. It was head-spinning.

All day Monday, the blogosphere and the talk shows mused about which party would come out ahead politically. Honestly, who cares? What ought to matter is not how these spending cuts will affect our politicians, but how they’ll affect the country. And I’m not even talking about the terrible toll $2.4 trillion in cuts will take on the poor and the middle class. I am talking about their effect on America’s still-ailing economy.

America’s real crisis is not a debt crisis. It’s an unemployment crisis. Yet this agreement not only doesn’t address unemployment, it’s guaranteed to make it worse. (Incredibly, the Democrats even abandoned their demand for extended unemployment benefits as part of the deal.) As Mohamed El-Erian, the chief executive of the bond investment firm Pimco, told me, fiscal policy includes both a numerator and a denominator. “The numerator is debt,” he said. “But the denominator is growth.” He added, “What we have done is accelerate forward, in a self-inflicted manner, the numerator. And, in the process, we have undermined the denominator.” Economic growth could have gone a long way toward shrinking the deficit, while helping put people to work. The spending cuts will shrink growth and raise the likelihood of pushing the country back into recession.

Inflicting more pain on their countrymen doesn’t much bother the Tea Party Republicans, as they’ve repeatedly proved. What is astonishing is that both the president and House speaker are claiming that the deal will help the economy. Do they really expect us to buy that? We’ve all heard what happened in 1937 when Franklin Roosevelt, believing the Depression was over, tried to rein in federal spending. Cutting spending spiraled the country right back into the Great Depression, where it stayed until the arrival of the stimulus package known as World War II. That’s the path we’re now on. Our enemies could not have designed a better plan to weaken the American economy than this debt-ceiling deal.

One thing Roosevelt did right during the Depression was legislate into being a social safety net to soften the blows that a free-market economy can mete out in tough times. During this recession, it’s as if the government is going out of its way to make sure the blows are even more severe than they have to be. The debt-ceiling debate reflects a harsher, less empathetic America. It’s sad to see.

My own view is that Obama should have played the 14th Amendment card, using its language about “the validity of the public debt” to unilaterally raise the debt ceiling. Yes, he would have infuriated the Republicans, but so what? They already view him as the Antichrist. Legal scholars believe that Congress would not have been able to sue to overturn his decision. Inexplicably, he chose instead a course of action that maximized the leverage of the Republican extremists.

Assuming the Senate passes the bill on Tuesday, the debt ceiling will be a nonissue until after the next election. But the debilitating deficit battles are by no means over. Thanks to this deal, a newly formed supercommittee of Congress is supposed to target another $1.2 trillion to $1.5 trillion in cuts by late November. If those cuts don’t become law by Dec. 23, automatic across-the-board cuts will be imposed, including deep reductions in defense spending.

As has been explained ad nauseam, the threat of defense cuts is supposed to give the Republicans an incentive to play fair with the Democrats in the negotiations. But with our soldiers still fighting in Afghanistan, which side is going to blink if the proposed cuts threaten to damage national security? Just as they did with the much-loathed bank bailout, which most Republicans spurned even though financial calamity loomed, the Democrats will do the responsible thing. Apparently, that’s their problem.

For now, the Tea Party Republicans can put aside their suicide vests. But rest assured: They’ll have them on again soon enough. After all, they’ve gotten so much encouragement.


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Sources: Fox News, Move On.org, NY Times, Youtube, Google Maps

McConnell Declares War On Obama Again! Defense & Taxes (Tea Party Terrorism)

Mitch McConnell Vows To Hold Debt Ceiling Hostage In The Future: ‘We’ll Be Doing It All Over’

While a deal has been struck to raise the debt ceiling for now, many progressives have worried that the damaged has been already been done in that Republicans learned that “raw extortion works and carries no political cost,” as the New York Times’ Paul Krugman wrote today. “Irresponsible brinksmanship” is now “a proven effective negotiating tactic,” ThinkProgress’s Matt Yglesias noted.

This afternoon, Senate Majority Leader Mitch McConnell (R-KY) confirmed this fear when he told Fox News’ Neil Cavuto that Republicans will hold the debt ceiling hostage in the future, saying this debate “set the template for the future”:

MCCONNELL: It set the template for the future. In the future, Neil, no president — in the near future, maybe in the distant future — is going to be able to get the debt ceiling increased without a re-ignition of the same discussion of how do we cut spending and get America headed in the right direction. I expect the next president, whoever that is, is going to be asking us to raise the debt ceiling again in 2013, so we’ll be doing it all over.

The debt ceiling has been raised dozens of times in the past without controversy, including 19 times under President Bush alone. President Reagan increasing the debt ceiling by 199.5 percent during his eight years in office — more than any executive to date — while Presidents Bush, Jr. raised it 90.2 percent and Bush Sr. increased it by 48.0 percent.

Progressives should instead push to repeal it. The debt ceiling was intended to check the growth of federal debt, but it has clearly failed in that endeavor.

All spending must already be approved by Congress in the budgeting and appropriations processes, so the debt ceiling serves as nothing more than a redundant yet dangerous roadblock that can be taken hostage by a minority party in Congress.

The Congressional Budget Office and the Government Accountability Office have both doubted the value of a statutory debt limit, and even former Fed Chairman Alan Greenspan called for its repeal in 2003, saying, “The debt ceiling is either redundant or inconsistent with the paths of revenues and outlays you specify when you legislate a budget.”


Sources: Fox News, Think Progress, Youtube

What's In Obama's Debt Ceiling Agreement? Fact Sheet (Highlights)

Fact Sheet: Bipartisan Debt Deal: A Win for the Economy and Budget Discipline


Bi-partisan Debt Deal: A Win for the Economy and Budget Discipline

* Removes the cloud of uncertainty over our economy at this critical time, by ensuring that no one will be able to use the threat of the nation’s first default now, or in only a few months, for political gain;

* Locks in a down payment on significant deficit reduction, with savings from both domestic and Pentagon spending, and is designed to protect crucial investments like aid for college students;

* Establishes a bi-partisan process to seek a balanced approach to larger deficit reduction through entitlement and tax reform;

* Deploys an enforcement mechanism that gives all sides an incentive to reach bipartisan compromise on historic deficit reduction, while protecting Social Security, Medicare beneficiaries and low-income programs;

* Stays true to the President’s commitment to shared sacrifice by preventing the middle class, seniors and those who are most vulnerable from shouldering the burden of deficit reduction. The President did not agree to any entitlement reforms outside of the context of a bipartisan committee process where tax reform will be on the table and the President will insist on shared sacrifice from the most well-off and those with the most indefensible tax breaks.

Mechanics of the Debt Deal

* Immediately enacted 10-year discretionary spending caps generating nearly $1 trillion in deficit reduction; balanced between defense and non-defense spending.
* President authorized to increase the debt limit by at least $2.1 trillion, eliminating the need for further increases until 2013.

* Bipartisan committee process tasked with identifying an additional $1.5 trillion in deficit reduction, including from entitlement and tax reform. Committee is required to report legislation by November 23, 2011, which receives fast-track protections. Congress is required to vote on Committee recommendations by December 23, 2011.

* Enforcement mechanism established to force all parties – Republican and Democrat – to agree to balanced deficit reduction. If Committee fails, enforcement mechanism will trigger spending reductions beginning in 2013 – split 50/50 between domestic and defense spending. Enforcement protects Social Security, Medicare beneficiaries, and low-income programs from any cuts.

1.) REMOVING UNCERTAINTY TO SUPPORT THE AMERICAN ECONOMY

* Deal Removes Cloud of Uncertainty Until 2013, Eliminating Key Headwind on the Economy: Independent analysts, economists, and ratings agencies have all made clear that a short-term debt limit increase would create unacceptable economic uncertainty by risking default again within only a matter of months and as S&P stated, increase the chance of a downgrade. By ensuring a debt limit increase of at least $2.1 trillion, this deal removes the specter of default, providing important certainty to our economy at a fragile moment.

* Mechanism to Ensure Further Deficit Reduction is Designed to Phase-In Beginning in 2013 to Avoid Harming the Recovery: The deal includes a mechanism to ensure additional deficit reduction, consistent with the economic recovery. The enforcement mechanism would not be made effective until 2013, avoiding any immediate contraction that could harm the recovery. And savings from the down payment will be enacted over 10 years, consistent with supporting the economic recovery.

2.) A DOWNPAYMENT ON DEFICIT REDUCTION BY LOCKING IN HISTORIC SPENDING DISCIPLINE – BALANCED BETWEEN DOMESTIC AND PENTAGON SPENDING

* More than $900 Billion in Savings over 10 Years By Capping Discretionary Spending: The deal includes caps on discretionary spending that will produce more than $900 billion in savings over the next 10 years compared to the CBO March baseline, even as it protects core investments from deep and economically damaging cuts.
* Includes Savings of $350 Billion from the Base Defense Budget – the First Defense Cut Since the 1990s: The deal puts us on track to cut $350 billion from the defense budget over 10 years. These reductions will be implemented based on the outcome of a review of our missions, roles, and capabilities that will reflect the President’s commitment to protecting our national security.

* Reduces Domestic Discretionary Spending to the Lowest Level Since Eisenhower: These discretionary caps will put us on track to reduce non-defense discretionary spending to its lowest level since Dwight Eisenhower was President.

* Includes Funding to Protect the President’s Historic Investment in Pell Grants: Since taking office, the President has increased the maximum Pell award by $819 to a maximum award $5,550, helping over 9 million students pay for college tuition bills. The deal provides specific protection in the discretionary budget to ensure that the there will be sufficient funding for the President’s historic investment in Pell Grants without undermining other critical investments.

3.) ESTABLISHING A BIPARTISAN PROCESS TO ACHIEVE $1.5 TRILLION IN ADDITIONAL BALANCED DEFICIT REDUCTION BY THE END OF 2011

* The Deal Locks in a Process to Enact $1.5 Trillion in Additional Deficit Reduction Through a Bipartisan, Bicameral Congressional Committee: The deal creates a bipartisan, bicameral Congressional Committee that is charged with enacting $1.5 trillion in additional deficit reduction by the end of the year. This Committee will work without the looming specter of default, ensuring time to carefully consider essential reforms without the disruption and brinksmanship of the past few months.

* This Committee is Empowered Beyond Previous Bipartisan Attempts at Deficit Reduction: Any recommendation of the Committee would be given fast-track privilege in the House and Senate, assuring it of an up or down vote and preventing some from using procedural gimmicks to block action.

* To Meet This Target, the Committee Will Consider Responsible Entitlement and Tax Reform. This means putting all the priorities of both parties on the table – including both entitlement reform and revenue-raising tax reform.

4.) A STRONG ENFORCEMENT MECHANISM TO MAKE ALL SIDES COME TOGETHER

* The Deal Includes An Automatic Sequester to Ensure That At Least $1.2 Trillion in Deficit Reduction Is Achieved By 2013 Beyond the Discretionary Caps: The deal includes an automatic sequester on certain spending programs to ensure that—between the Committee and the trigger—we at least put in place an additional $1.2 trillion in deficit reduction by 2013.

* Consistent With Past Practice, Sequester Would Be Divided Equally Between Defense and Non-Defense Programs and Exempt Social Security, Medicaid, and Low-Income Programs: Consistent with the bipartisan precedents established in the 1980s and 1990s, the sequester would be divided equally between defense and non-defense program, and it would exempt Social Security, Medicaid, unemployment insurance, programs for low-income families, and civilian and military retirement. Likewise, any cuts to Medicare would be capped and limited to the provider side.

* Sequester Would Provide a Strong Incentive for Both Sides to Come to the Table: If the fiscal committee took no action, the deal would automatically add nearly $500 billion in defense cuts on top of cuts already made, and, at the same time, it would cut critical programs like infrastructure or education. That outcome would be unacceptable to many Republicans and Democrats alike – creating pressure for a bipartisan agreement without requiring the threat of a default with unthinkable consequences for our economy.


5.) A BALANCED DEAL CONSISTENT WITH THE PRESIDENT’S COMMITMENT TO SHARED SACRIFICE

* The Deal Sets the Stage for Balanced Deficit Reduction, Consistent with the President’s Values: The deal is designed to achieve balanced deficit reduction, consistent with the values the President articulated in his April Fiscal Framework. The discretionary savings are spread between both domestic and defense spending. And the President will demand that the Committee pursue a balanced deficit reduction package, where any entitlement reforms are coupled with revenue-raising tax reform that asks for the most fortunate Americans to sacrifice.

* The Enforcement Mechanism Complements the Forcing Event Already In Law – the Expiration of the Bush Tax Cuts – To Create Pressure for a Balanced Deal: The Bush tax cuts expire as of 1/1/2013, the same date that the spending sequester would go into effect. These two events together will force balanced deficit reduction. Absent a balanced deal, it would enable the President to use his veto pen to ensure nearly $1 trillion in additional deficit reduction by not extending the high-income tax cuts.

* In Securing this Bipartisan Deal, the President Rejected Proposals that Would Have Placed the Sole Burden of Deficit Reduction on Low-Income or Middle-Class Families: The President stood firmly against proposals that would have placed the sole burden of deficit reduction on lower-income and middle-class families.

This includes not only proposals in the House Republican Budget that would have undermined the core commitments of Medicare to our seniors and forced tens of millions of low-income Americans to go without health insurance, but also enforcement mechanisms that would have forced automatic cuts to low-income programs. The enforcement mechanism in the deal exempts Social Security, Medicaid, Medicare benefits, unemployment insurance, programs for low-income families, and civilian and military retirement.





President Obama speaks in support of the bipartisan deal to reduce the deficit and raise the debt limit

Tonight, President Obama spoke in support of a bipartisan deal to reduce the nation's deficit and avoid default. It extends the debt limit to 2013, removing the cloud of uncertainty over our economy and ensuring that no one will be able to use the threat of default now or in only a few months for political gain. The bipartisan compromise assures that the United States meets its obligations – including monthly Social Security checks, veterans’ benefits, and the government contracts we’ve signed with thousands of businesses.

In order to receive the support from both parties -- as the President has consistently stressed -- the agreement has a few important elements:

*
A down payment on deficit reduction with historic long-term spending restraint: Nearly $1 trillion in spending cuts -- done in a way to not harm the economic recovery, are balanced between domestic and pentagon spending, and protects critical initiatives like aid for college students;
*
Expedited process for balanced deficit reduction: Puts in place a longer term process for additional $1.5 trillion in deficit reduction through a committee structure that will put everything on the table, including tax and entitlement reform. To prevent either side from using procedural tricks to prevent Congress from acting, the committee’s recommendations will receive fast track authority, which means they can’t be amended or filibustered.
*
Sets the stage for a balanced package, including revenues: The American people and a growing number of Republicans agree that any deficit reduction package must be balanced and included revenue.
o
If the Committee does not succeed in meaningful balanced deficit reduction with revenue-raising tax reform on the most well-off by the end of 2012, the President can use his veto pen to raise nearly $1 trillion from the most well-off by vetoing any extension of the Bush high income tax cuts.
*
A proven enforcement mechanism: An enforcement mechanism that will compel painful enough cuts to both sides that it will force congress to act. Enforcement mechanisms by their very nature should include measures that neither side supports so as to ensure action.
o
If Congress fails to act, beginning in 2013 there will be $1.2 trillion in spending cuts through 2021 – 50 percent from domestic spending and 50 percent from defense spending. Low income programs, including Medicaid, and Social Security and Medicare benefits would be exempted. Medicare cuts would be capped, limited to the provider side.
* Does not accept entitlement reforms without equal consideration of revenue raising tax reform, and ensures that low-income and middle class families are not forced to bear a disproportionate share of the burden from deficit reduction.

This fact sheet provides and even more comprehensive overview of the deal.
Here are President Obama's full remarks:


"Good evening.

There are still some very important votes to be taken by members of Congress, but I want to announce that the leaders of both parties, in both chambers, have reached an agreement that will reduce the deficit and avoid default -- a default that would have had a devastating effect on our economy.

The first part of this agreement will cut about $1 trillion in spending over the next 10 years -- cuts that both parties had agreed to early on in this process. The result would be the lowest level of annual domestic spending since Dwight Eisenhower was President -- but at a level that still allows us to make job-creating investments in things like education and research. We also made sure that these cuts wouldn’t happen so abruptly that they’d be a drag on a fragile economy.

Now, I've said from the beginning that the ultimate solution to our deficit problem must be balanced. Despite what some Republicans have argued, I believe that we have to ask the wealthiest Americans and biggest corporations to pay their fair share by giving up tax breaks and special deductions. Despite what some in my own party have argued, I believe that we need to make some modest adjustments to programs like Medicare to ensure that they’re still around for future generations.

That's why the second part of this agreement is so important. It establishes a bipartisan committee of Congress to report back by November with a proposal to further reduce the deficit, which will then be put before the entire Congress for an up or down vote. In this stage, everything will be on the table. To hold us all accountable for making these reforms, tough cuts that both parties would find objectionable would automatically go into effect if we don’t act. And over the next few months, I’ll continue to make a detailed case to these lawmakers about why I believe a balanced approach is necessary to finish the job.

Now, is this the deal I would have preferred? No. I believe that we could have made the tough choices required -- on entitlement reform and tax reform -- right now, rather than through a special congressional committee process. But this compromise does make a serious down payment on the deficit reduction we need, and gives each party a strong incentive to get a balanced plan done before the end of the year.

Most importantly, it will allow us to avoid default and end the crisis that Washington imposed on the rest of America. It ensures also that we will not face this same kind of crisis again in six months, or eight months, or 12 months. And it will begin to lift the cloud of debt and the cloud of uncertainty that hangs over our economy.

Now, this process has been messy; it’s taken far too long. I've been concerned about the impact that it has had on business confidence and consumer confidence and the economy as a whole over the last month. Nevertheless, ultimately, the leaders of both parties have found their way toward compromise. And I want to thank them for that.

Most of all, I want to thank the American people. It’s been your voices -- your letters, your emails, your tweets, your phone calls -- that have compelled Washington to act in the final days. And the American people's voice is a very, very powerful thing.

We’re not done yet.

I want to urge members of both parties to do the right thing and support this deal with your votes over the next few days. It will allow us to avoid default. It will allow us to pay our bills. It will allow us to start reducing our deficit in a responsible way. And it will allow us to turn to the very important business of doing everything we can to create jobs, boost wages, and grow this economy faster than it's currently growing.

That’s what the American people sent us here to do, and that’s what we should be devoting all of our time to accomplishing in the months ahead.

Thank you very much, everybody."

Sources: CNN, Huffington Post, MSNBC, White House.gov, Youtube

"Sugar-Coated Satan Sandwich!" Emanuel Cleaver On Debt Ceiling Deal (Videos)

Cleaver: 'If I Were A Republican, I Would Be Dancing In The Streets'

Rep. Emanuel Cleaver (D-Mo.), the leader of the Congressional Black Caucus, who earlier in the day called the emerging debt ceiling deal a "sugar-coated Satan sandwich," stood by his criticism in an interview with MSNBC following Obama's announcement of the deal.

"We lost this early on," Cleaver said. "I came back to Washington at the beginning of the year thinking we were going to create jobs, and we allowed the national discourse to change from jobs to the debt, and so right now there's very little we can do."

"If I were a Republican, I would be dancing in the streets," he said. "I don't have any idea what the Republicans wanted that they didn't get. And I can't tell you anything that Democrats got out of this deal, except that we're probably going to prevent the nation from crashing."


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Sources: Huffington Post, MSNBC, Youtube, Google Maps

Obama's Debt Ceiling Compromise Wise Move? GOP Brand Damaged FOREVER!!

Did Obama capitulate — or is this a cagey move?

It was President Obama’s bottom line, a position he repeated in every recent public utterance on his debt-ceiling talks with Congress: Any deal must be “balanced” with spending cuts and tax increases.

But in his eleventh-hour stare-down with tea party-infused Republicans, with a possible government default on the line, Obama blinked.

The deal to trim the federal deficit by more than $2 trillion and increase the government’s borrowing limit contains no guarantee that tax increases will be part of the equation.

After weeks of presidential demands for sacrifice by corporate jet owners and hedge-fund managers, those taxpayers and others can rest easy — at least for now.

Liberals were furious as the terms of the agreement came into focus Sunday, and yet another capitulation by Obama on economic policy threatened to further dampen enthusiasm among the core Democratic voters he will need to win reelection next year.

But for a White House eager to improve its standing with centrist independents who have been fleeing Obama, even a losing deal can be a winning strategy.

Most important for the president, the agreement struck Sunday averted a government default — an outcome that probably would have hurt the U.S. economy and added to voters’ frustrations with Obama’s leadership.

The deal also allows the president to avoid another politically painful fight over lifting the debt ceiling before the 2012 election, with Republicans giving up their insistence on a second vote before then.

And Obama, branded a socialist by many Republicans for his big-spending stimulus program and his health-care overhaul, can declare himself a deficit hawk as he courts the political middle.

As he put it in remarks late Sunday praising the agreement, the result of his negotiations would be “the lowest level of annual domestic spending since Dwight Eisenhower was president.”

An administration official told reporters later that “it’s important to show the American people we are serious about deficit reduction.”

Even an apparent capitulation by Obama helps present him to voters as a reasonable compromiser doing battle against rigid ideologues, his aides say.

“In the short term, everyone suffers politically,” Obama campaign strategist David Axelrod said in a recent interview. “In the long term, I think the Republicans have done terrible damage to their brand. Because now they’re thoroughly defined by their most strident voices.”

Obama and his aides insisted Sunday that the president has not given up his fight on taxes.

The creation in the agreement of a bipartisan committee that will recommend the bulk of the deficit reduction later this year gives the president more chances to apply public pressure for tax increases on the wealthy.

Obama will take his case to the public, perhaps even harnessing his reelection campaign apparatus to target lawmakers, as he began doing this past week via Twitter. A July Washington Post-ABC News poll found that most Americans, including most Republicans, support some tax increases to reduce the deficit and oppose cutting programs such as Medicaid and Medicare.

“Over the next few months, I’ll continue to make a detailed case to these lawmakers about why I believe a balanced approach is necessary to finish the job,” the president said Sunday.

Obama’s big compromise on the debt-ceiling deal was agreeing to a “trigger” forcing across-the-board spending cuts — including to Medicare and defense — should the committee process not work.

Many Democrats will be relieved to learn that the automatic cuts would not apply to Medicaid, Social Security and certain programs for low-income families. But liberals had hoped the trigger would include taxes. Instead, by late Sunday, House Speaker John A. Boehner (R-Ohio) declared a total victory on that front — telling his colleagues, “The White House bid to raise taxes has been shut down.”

A White House official argued Sunday that the president had another trump card to play: the scheduled expiration of the George W. Bush tax cuts at the end of 2012.

Obama would block extension of the reductions, either as a final act in office after losing the November 2012 election or after winning a second term. At a minimum, the issue gives him leverage for this year’s deficit battle.

The trouble for Obama is that presidents generally do not want to turn their reelection campaigns into crusades for higher taxes. Polling data may show voters siding with Obama on the details, but in general Democrats lose when Republicans paint them as tax-and-spend liberals — which explains why the White House was so eager to avoid another debt-ceiling vote.

Democratic pollster Mark Mellman said the ongoing debate over taxes and spending would take Democrats, and the president, away from addressing voters’ larger concerns about how to create jobs and stimulate the economy.

“Everyday Democrats aren’t talking jobs is a less-than-optimal day for us,” Mellman said.

Grover Norquist, president of Americans for Tax Reform and the creator of the no-new-taxes pledge signed by most Republicans, was ebullient Sunday at the substance and political implications for the deal.

Obama may declare victory, he said, but after relenting on taxes, “he’s playing hurt.” Norquist said Republicans next year can make a case that the 2011 deal would have been far bigger had the GOP controlled the Senate and the White House. And they will argue that when it came to spending cuts, “Obama fought us every step of the way.”

Norquist added that he was “pleasantly shocked” that Obama had not sought a debt-ceiling increase last year, when the president struck another deal with the GOP extending the Bush tax cuts — given that the president had far more leverage at that point.

Some Democrats, too, turned Sunday to questioning Obama’s negotiating skills — asking if he could have avoided the current crisis altogether and maintained a stronger political position.

Obama, after all, could have accepted earlier GOP plans that included additional tax revenue — including one that he was negotiating with Boehner. The speaker, who seemed willing to allow $800 billion in additional revenue, walked out of the talks when Obama asked for more.

Now, according to Democratic critics, the poor and the middle class are at greater risk from cuts.

One senior Senate Democratic aide said that averting a default was a victory of sorts for Obama, “but when you look at the emerging details, spending cuts and triggers with no revenue, the president got rolled.”

Asked if the deal was balanced, as the president had required, former Obama White House economic adviser Jared Bernstein said, “Not by any stretch of the imagination.”

Sources: C-Span, Washington Post, White House, Youtube

Tea Party Won Debt Ceiling Fight? Perhaps Yes For Now (Decision 2012)

How the Tea Party ‘hobbits’ won the debt fight


The Tea Party came under fire from all sides Friday after House conservatives nearly brought down Speaker John Boehner’s debt-limit bill. John McCain went to the Senate floor to mock Tea Partyers as “hobbits,” and Democratic Rep. Chris Van Hollen said Tea Party Republicans “are unfit for governing.”

What a difference a weekend makes. The reported debt-limit deal appears to be a victory for the Tea Party. It includes around $1 trillion in spending cuts and creates a special committee of Congress to recommend cuts of $1.2 trillion more. If Congress does not approve those additional cuts by year’s end, automatic spending cuts go into effect. The package sets an important new precedent that debt-limit increases must be “paid for” with commensurate cuts in spending. According to Sen. Rob Portman, a former White House budget director, if we cut a dollar of spending for every dollar we raise the debt limit, we will balance the budget in 10 years — something that even the Paul Ryan budget would not achieve. And all this is accomplished with no tax increases.

The devil is in the details, of course. There are troubling reports that the agreement may disproportionately cut defense spending. Conservatives should ensure that the final deal, which is still being hammered out at the time of this writing, does not gut defense. They should scour the legislation to make certain it lives up to its billing. If it does, the Tea Party has won.

To appreciate the scope of the Tea Party’s victory, consider: When Barack Obama came into office, he went on a bender of government spending. He signed an unprecedented $821 billion stimulus spending bill. His first budget increased federal spending to 27 percent of gross domestic product — the highest level as a share of the economy since World War II. He then proceeded to ram through Congress Obamacare, a massive government intervention that adds $1.4 trillion in new spending over the next decade alone. Democrats openly talked about passing a “second stimulus.” And five months ago Obama submitted a budget to Congress that tripled the national debt, raising it by $10 trillion over the next 10 years.

Today, no one is talking about tripling the national debt or passing a “second stimulus.” Congress is about to cut spending by about $2 trillion and put us on a trajectory to balance the budget within a decade. Senate Majority Leader Harry Reid complained Saturday evening that Congress has raised the debt limit 74 times since 1962 without conditions. He is right. This is happening for the first time in history, thanks to the Tea Party.

Consider that less than a week ago, President Obama addressed the nation, demanding that Congress include higher taxes in any debt-limit deal. According to Senate Republican leader Mitch McConnell, the proposed deal has no tax increases. The Tea Party took tax hikes off the table and held the line — another major victory.

The Tea Party is also winning the battle of ideas. Last week, Obama campaign strategist David Axelrod crowed that the debt-limit battle was shaping up as a “definitional fight” in which voters would see Obama as defending the reasonable center against Republicans who are “pandering to the extremes.” Well, if Axelrod is so confident that Obama is winning this “definitional fight,” why was the White House so adamant about ducking a second round next year? The president said that “the only bottom line that I have is that we extend this debt ceiling through the next election.” If he were winning the argument, he would have been eager to have this fight again just before the next election.

Instead of winning over independents with his calls for a “balanced” approach, the president’s support among independents has collapsed. A Pew poll released last week found that a majority of independents now disapprove of Obama’s job performance for the first time in his presidency. Two months ago, Obama held an 11-point lead over a generic Republican. Today, that lead has vanished. Whatever the president’s strategy was, it failed.

Now comes that hard part: accepting an incomplete victory. Some Tea Party Republicans will be unhappy with the deal because it does not include a balanced budget amendment to the Constitution. The fight for a balanced budget amendment must go on. But Tea Partyers should recognize just how much Obama and the Democrats caved: $2 trillion in spending cuts. No tax increases. A new precedent that debt-limit hikes must be accompanied by equal or greater cuts in spending. And the potential for a balanced budget in 10 years. That the Tea Party accomplished all this in just six months — at a time when the GOP controls one-half of one-third of the federal government — is remarkable.

The “hobbits” won.


Sources: C-Span, Washington Post, Youtube

Debt Ceiling Deal Includes Deep Cuts & GOP Triggers (Creates More Poverty)

McConnell Sees Deal “Very Close”; Focus Is on Triggers for Cuts


Senator Mitch McConnell of Kentucky, the Republican leader, said Sunday morning that he was “very close” to recommending to his members that they sign on to a debt deal with President Obama and the Democrats.

Speaking on the CNN program “State of the Union,” Mr. McConnell said the emerging deal included as much as $3 trillion in cuts over the next 10 years, with much of that decided later this year by a joint congressional committee.

“What conservatives want to do is cut spending,” he said. “We’ve come a long way. This agreement is likely to encompass up to $3 trillion is spending cuts.”

In addition, Mr. McConnell said the agreement would allow votes in Congress on a balanced budget amendment.

Mr. McConnell indicated that proposals to force action by the joint committee had been among the most contentious of the last week. He declined to be specific about so-called “triggers” of across-the-board cuts that would go into effect if the committee could not agree on a plan — a measure meant to put pressure on the committee to finish its work.

But he said the committee — made up of six Democrats and six Republicans — would be under tremendous pressure by the American people and the markets to implement the further spending cuts.

“That’s been an item of outstanding discussion for over a week,” Mr. McConnell said. “We’ll let you know what we’ve done on the trigger issues when we make the announcement.”

Congress and the White House are racing to strike a deal to raise the federal government’s borrowing cap before Tuesday, the day that the Treasury Department has said it would no longer be able to pay for all of its commitments. Congressional Republicans have demanded spending cuts in exchange for approval to raise the federal borrowing limit.

Late on Saturday night, the Senate delayed until 1 p.m. Sunday a crucial vote on a debt ceiling bill put forward by the Democrats, amid growing indications that a compromise was in the works.

Appearing after Mr. McConnell on the same program, Senator Charles E. Schumer of New York, a Democrat, Mr. Schumer agreed that the question of a trigger was “one of the key issues that’s still being debated.”

Mr. Schumer echoed Mr. McConnell’s optimism but had a different assessment of the tone. The debate, he said, has “an enmity that in my 37 years as a legislator I have never seen.’’

But, he said, “I feel a lot better today about the ability to avoid default than I did even yesterday morning.’’

“And default would have such disastrous consequences for our nation for decades to come,’’ he said, adding, “The fact that our leaders are talking, though hardly any one agrees with everything that’s come up, is a good thing,’’ he said.

But Mr. Schumer sketched out a key area of disagreement, the components of a trigger for what would happen if Congress does not follow up with a second round late this year, based on recommendations by the commission. That is still under negotiation, he said.

“The key to the trigger is one word, equality,’’ he said. “It should be equally tough on Democrats and Republicans.’’ He proposed a series of policy defaults that would take effect if Congress could not agree, to encourage such agreement.

For example, he said, it might include steps anathema to Democrats, like cutting college scholarships for middle-class children or prescription drug benefits. And for Republicans, he said, “They would have to do things they hate, like close loopholes for oil companies, and corporate jets.’’

But at the moment, he said, “We don’t even know what all the details are, so we’re not yet ready to urge anybody to be for it.

On the ABC program “This Week,” David Plouffe, senior adviser to Mr. Obama, was asked if there was a deal. “No, there’s not,” he replied. But he laid out the outlines of an emerging agreement: a package that includes $1 trillion in cuts, and a Congressional commission that would report to Congress in the fall with a plan for additional changes amounting to $1 trillion or more.

Mr. Obama and the Democrats are still pushing for revenue increases, he said, though the Republicans remain opposed. “I think the American people have spoken out that they want a balanced approach,’’ he said.

He said twice that it was “inconceivable” that there would not be a deal, and said the American people were “furious” that no agreement had been reached.

Mr. Plouffe was followed by Senator Lindsey Graham of South Carolina, a Republican who has sometimes shown tendencies toward bipartisanship. He said that the emerging deal represented progress.

“It’s a $3 trillion package that will allow $7 trillion to be added to the deficit over the next decade,” he said. Without the agreement, $10 trillion would have been added, he said.

“We’re no longer running toward oblivion, we’re walking toward it,” he said.

But he has not decided whether to vote for it, he said.


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Sources: CNN, NY Times, Google Maps

Harry Reid Vs. GOP's Debt Ceiling Filibuster: Obama Urges Compromise

It’s Up to the Senate

It was hard to imagine that the House bill to raise the debt limit, and slash and burn the economy, could get any worse. But on Friday it did.

The bill, which narrowly passed the House with 218 Republican votes and none from Democrats, would allow the government to keep borrowing only until November or December and then require both the Senate and the House to pass a balanced budget amendment to the Constitution before the limit could be raised again.

That’s right, in a bid to win over his recalcitrant caucus, Speaker John Boehner agreed to go through all of this again in just a few months — and then hold the country hostage to passing an amendment that will never get the two-thirds of each chamber that it would need. The bill was, as it should have been, promptly dismissed by the Senate.

Now the only hope left for avoiding default on Tuesday is for the Senate to piece together a compromise that can pass with bipartisan majorities in both chambers. It will undoubtedly cut far too much, at a time when the economy can’t afford it. It will contain no needed revenue increases and could still trigger a downgrade. But it would eliminate the imminent threat of financial chaos.

For six months, House leaders catered to their Tea Party members, perhaps hoping that they could turn them to a reasonable path, or at least count on their votes in a clinch. That wish crumbled on Thursday night. At least two dozen Republicans, mostly freshmen, adamantly refused Mr. Boehner’s pleas to support his bill — his last shot at keeping the House’s positions relevant.

Instead of worsening the bill, Mr. Boehner could have negotiated with Democrats to construct one with a chance of resolving the standoff and passing in the Senate. But concerned largely with preserving his position, he gave in to the very lawmakers who have been insisting for weeks that the Obama administration is lying about the coming default. That argument alone should have given him pause about giving in to their demands.

The Senate quickly tabled the revised House bill. The legislation being prepared by Harry Reid, the majority leader, would raise the debt ceiling through March 2013. That avoids another showdown, and potential meltdown, in the middle of the crucial retail shopping period and at the start of the presidential campaign cycle, when Washington will be even less open to rational compromise.

The bill would cut the deficit by about $2.4 trillion over the next decade. Unlike the House bill, it spares Medicare, Medicaid and Social Security from benefit cuts, and counts the drawdown of troops from Iraq and Afghanistan as part of its savings, easing the burden on domestic programs. Unfortunately, it surrenders to the unrealistic Republican demand of no new revenues, cutting too much spending at a time when the economy is still in serious need of government help.

Mr. Reid is negotiating with Republicans on their demands for an enforcement mechanism to make sure the deficit cuts take place in the later years of the deal. Both parties envision a bipartisan panel that could recommend cuts; if those are not adopted, some kind of automatic cuts would go into effect. This automatic knife can be dangerous, arbitrarily cutting without regard to economic circumstances. Democrats should insist that taxes and revenues are not ruled out as a way to lower the deficit.

The House planned a deliberately obstructionist vote on Saturday against the Reid bill, but some Senate Republicans are signaling they are willing to agree to this more reasonable framework. If enough of them can join the Democrats and ignore the bleats of the Tea Party, it may still be possible to avert calamity.


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Sources: Boston.com, Huffington Post, NY Times, Youtube, Google Maps