Tag Archives: debt ceiling

Obama Tells Republicans: “I’m not paying the ransom.”

President Obama  -  http://mariopiperni.com/

The money quote from President Obama’s press conference.

To even entertain the idea of this happening, of the United States of America not paying its bills, is irresponsible. It’s absurd. As the speaker said two years ago, it would be — and I’m quoting Speaker Boehner now — “a financial disaster not only for us but for the worldwide economy.” So we got to pay our bills. And Republicans in Congress have two choices here: They can act responsibly and pay America’s bills or they can act irresponsibly and put America through another economic crisis.

But they will not collect a ransom in exchange for not crashing the American economy. The financial well-being of the American people is not leverage to be used. The full faith and credit of the United States of America is not a bargaining chip.

And they’d better choose quickly because time is running short. The last time Republicans in Congress even flirted with this idea, our triple-A credit rating was downgraded for the first time in our history, our businesses created the fewest jobs of any month in nearly the past three years, and ironically, the whole fiasco actually added to the deficit.

I’m guessing that Republicans are foolish enough to play their game of chicken all the way to the last second hoping that Obama gets weak-kneed and grants them their grab bag of cuts to screw over the middle class. So far the president has given every indication that he’s hanging tough and will not pay the ransom. Nice.

If you missed Obama’s last press conference of his first term, you can catch it here.


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Krugman – America Inching Toward Banana Republic Status

A must-read Krugman piece.

For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status.

That last line on “raw extortion” is the one which should concern people most. There is nothing now to stop Republicans from using the same technique to extort even more from this President. They’ve utilized it enough times and in every case, the President has caved in to their demands.

There might be some ingenious madness lurking behind President Obama’s methods but one would be hard-pressed at this time to guess what that might be.  Hopefully, it has nothing to do with his dream of making bipartisan politics happen anytime soon.  The blood thirsty wolves on the other side of the aisle have clearly shown they have no interest in playing that game.


Debt Ceiling Madness – The Deal

Republicans have the art of hostage politics down to a science. They had a lot of practice last year when they held the unemployed hostage by refusing to extend benefits unless the President backed away from allowing the Bush tax cuts to expire. They won that round. And now again, by threatening to blow up the economy by refusing to raise the debt limit, Republicans have pretty much gotten all that they wanted in this round of Mad Politics.

Sam Stein summarizes the deal.

A White House fact sheet distributed to reporters shortly after the president spoke laid down the specific elements of Sunday night’s deal to raise the debt ceiling:

  • The president will be authorized to increase the debt limit by at least $2.1 trillion, eliminating the need for another increase until 2013.
  • The first tranche of cuts will come in at nearly $1 trillion. That includes savings of $350 billion from the Base Defense Budget, which will be trimmed based off a review of overall U.S. national security policy.
  • A bipartisan committee with enhanced procedural authority will be responsible for pinpointing $1.5 trillion in deficit reduction from both entitlements and tax reform, as well as other spending programs.
  • The committee will have to report out legislation by November 23, 2011.
  • Congress will be required to vote on Committee recommendations by December 23, 2011.
  • The trigger mechanism — should the committee’s recommendations not be acted upon — will be mandatory spending cuts. Those cuts, which will begin in January 2013, will be split 50/50 between domestic and defense spending. Social Security and Medicare beneficiaries and “low-income programs” would be exempted from those cuts.

The fact sheet goes on to note that there is another enforcement mechanism that the president possesses.

“The Bush tax cuts expire as of 1/1/2013, the same date that the spending sequester [the trigger mechanism] would go into effect,” the fact sheet reads. “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.”

The deal hasn’t passed through Congress but at this point it appears that the votes are there…maybe. It should sail through the Senate but there are still questions as to whether the House’s Tea Party Caucus will continue their game of madness and refuse to join Boehner in supporting the deal. And you can add to their discontent, the anger and frustration emanating from the Progressive wing of the House who will be asked to vote for a bill which contains zero gains on the revenue side. Rep. Emanuel Cleaver referred to the deal as “a sugar-coated Satan sandwich.” And Rep. Raúl Grijalva didn’t hold back in expressing his disappointment at the final outcome of months of negotiations.

“This deal trades people’s livelihoods for the votes of a few unappeasable right-wing radicals, and I will not support it. The lesson today is that Republicans can hold their breath long enough to get what they want.”

As for President Obama, it’s never an easy task to negotiate with people who are willing to give it all up for the sake of victory. Andrew Sullivan:

All in all, Obama played this terribly, in my opinion. Leading from behind can be a strategy when all the actors are responsible. When one isn’t – and has no problem destroying the economy in order to save it – you have to get out in front. Obama didn’t have the courage to do that in January. He has paid the price.

And just when you thought politics could not get uglier, Republicans have shown us all it can. One can only hope that David Axelrod is reading it right.

“In the short term, everyone suffers politically. 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.”

The question is whether voters will care or even remember fifteen months down the road how badly Republicans damaged their brand when the economy is still languishing in the pits. The focus in this last year and a half of Obama’s term should have been on job creation yet somehow he allowed Republicans to make the debt the showstopper. With this deal, the President has limited his options in what can be done to stimulate the economy. You can now eliminate new spending of any kind thereby making economic recovery in the near future less likely.

If unemployment is hovering around 10% come election day next year, does anyone seriously think that the blame will go to Republicans and their teabagging cohorts who held the economy hostage these many months and forced upon this administration a budget deal which contained no new revenue stream? I doubt it.

Bill Maher had it just about right when he said that the real problem here is that the U.S. is ruled by two parties of which one has no brains and the other has no balls.


Crazy Teahadist Republicans

The plot thickens.

Bill Kristol:

If the Republican bill loses today on the floor, or Boehner pulls it down, then Reid will take the lead, McConnell will cut a deal, and a Reid-McConnell bill will pass the Senate easily and then the House, with most House Democrats and lots of House Republicans voting yes. This won’t be an outcome that will destroy America, or end GOP hopes for 2012—but it’s not a good one either. The question is this: Will President Obama invite the House Republican defectors to the White House signing ceremony on Monday? They would deserve such recognition in honor of their role in weakening the Republican party in the House and the conservative movement in the country, increasing the chances of Obama securing a terrible Grand Bargain in several months when the Reid bill’s supercommittee reports, and making it harder to defeat Obama in 2012.

Again, for conservatives it all boils down to doing whatever it takes to defeat Obama in 2012. Nothing else really matters, certainly not the U.S. defaulting on its obligations and further destruction of the economy. But if there is a bright side to the ongoing crisis, it’s that a number of Republicans (and hopefully, voters) are realizing what happens when a party takes on a shitload of misguided, ideological nutjobs and gives them a say in Congress. You end up with mickey mouse politicians who are clueless to the fact that there is a time to play politics and a time to govern.

Teabagging politicians and the simple-minded folk who support them fail to understand that compromise is an integral part of the governing process. Remove that component and you are left with a legislative body unable to function, much like we now see in Congress. To hear Republicans in the House pounding their chests in glee over their refusal to compromise is to make a mockery of 235 years of democratic rule. Yet these people call themselves patriots. What a joke.

They fail to understand that they’ve already won this foolish battle. The White House and Democrats have conceded all to them. There will be no increase in taxes in whatever bill finally passes through Congress.  The only thing the President now asks is that the debt ceiling increase run through 2013 so that this economy-damaging circus does not replay in six months time.  As of this writing, the teahadists have refused that single concession.

One can only hope that Americans are paying attention.