July 27th, 2011
Posted by Speaker Boehner's Press Office on July 27, 2011
The Congressional Budget Office (CBO) has released its analysis of the revised Budget Control Act of 2011 today, and CBO’s analysis confirms that the spending cuts are greater than the debt hike – affirming that the House GOP bill meets the critical test House Republicans have said they will insist upon for any bill to raise the nation’s debt ceiling. Specifically, the CBO analysis confirms the Republican plan will:
- Cut and cap spending by $917 billion over 10 years – that’s more than the $900 billion debt hike;
- Cut $22 billion in spending for FY2012 and hold spending below FY2010 levels until FY2016;
- Continue reducing discretionary spending each year compared to President Obama’s budget (by $96 billion in 2012, $118 billion in 2013, $115 billion in 2014, $117 billion in 2015, and so on); and
- Require Congress to draft proposals that produce reductions of at least $1.8 trillion that help protect programs like Medicare and Social Security from bankruptcy.
Republicans adjusted their spending cut bill after a lower-than-expected score from CBO. This updated analysis confirms what others are saying: the Republican plan “changes the trajectory of spending” and “would keep the debt cutting process going.” Unlike Senator Reid’s gimmick-filled plan, the Republican proposal includes real spending cuts and reforms that will restrain future spending – and the spending cuts are larger than the debt limit increase.
This bill is far from perfect, but it’s a positive step forward that denies President the $2.4 trillion blank check that lets him continue his spending binge through the next election. Learn more about it here.
*Thanks to CR Contributor Paul Johnson for this.
July 27th, 2011
Cr Editorial note: The facts in all of this have been lost in total. The media has been arguably successful in misleading the entire nation, along with both Obama and the Democrats. It is blatantly obvious that Boehner's plan does nothing to come even close to the problem of extreme debt, as it appears that the triple A bond rating will be lost as the hands of Obama and the democratic spendocrats efforts.
Few if any legislators seems to care to try to correct that outcome.
Now more than ever, I am increasingly convinced that Obama and the Dems. are aiming for a Cloward-Piven makover of America. It's the only plausible explanation that works. Don't doubt me on this one, All of the supposed "other" answers are no better than dust in the wind, no one wants to truly reign in spending and most of the establishment is buying the leftist excuses.
The Republicans either refuse or are simply to obtuse to see it.
This is not good people.
Washington (CNN) -- Competing Democratic and Republican plans to reduce federal deficits and raise the debt ceiling were subjected to a fresh round of criticism Wednesday, as signs of disarray emerged in a House Republican caucus split between unhappy conservatives and a leadership struggling to maintain party unity.
"Get your ass in line," House Speaker John Boehner told his fellow Republicans in the face of divisive infighting over his latest proposal, two GOP sources who attended a Wednesday morning meeting told CNN on condition of not being identified.
The House scheduled a vote on the plan for Thursday in what will be a major test for whether the GOP caucus can push through the Boehner measure in the face of an expected unified Democratic opposition. Republicans hold 240 of the 433 votes to be cast and need 217 of their members to support the plan for it to pass. Two House seats are currently vacant.
Meanwhile, the nonpartisan Congressional Budget Office said that revisions to Boehner's plan would bring a total of $915 billion in savings over 10 years, an increase of about $65 billion over the initial version. With the revisions, Boehner's proposal -- which calls for an immediate $900 billion increase in the debt ceiling -- now meets his pledge to match any debt ceiling hike with dollar-for-dollar spending cuts.
However, a letter Wednesday from Senate Democrats said the Republican plan has no chance of passing the Senate. For their part, top Republicans called the Democratic plan a nonstarter.
As the politicians bickered, the clock continued to tick down. If Congress fails to raise the current $14.3 trillion debt limit by August 2, Americans could face rising interest rates and a declining dollar, among other problems.
As the cost of borrowing rises, individual mortgages, car loans and student loans could become significantly more expensive. Some financial analysts have warned of a potential stock market crash and a downgrade of America's triple-A credit rating.
Without an increase in the debt limit, the federal government will not be able to pay all of its bills next month. President Barack Obama recently indicated he can't guarantee Social Security checks will be mailed out on time.
With no deal in sight and six days before potential default, the Dow Jones Industrial average fell 198 points on Wednesday.
A CBO analysis released Wednesday morning concluded that the Democratic plan put forward by Senate Majority Leader Harry Reid would reduce deficits over the next decade by $2.2 trillion -- $500 billion short of promised savings of $2.7 trillion. Democrats have been claiming their plan would meet the GOP demand that total savings should at least match the debt ceiling increase sought by the government to last through 2012.
On Tuesday, the CBO reported that the most recent proposal from Boehner, R-Ohio, would cut spending by $850 billion rather than the $1.2 trillion proponents claimed it would save, and below the $900 billion increase in the debt ceiling included in the measure. The revised version analyzed Wednesday by the CBO solved that problem.
Boehner's plan also calls for at least another $1.6 trillion in deficit reduction partly through tax and entitlement reforms to be proposed by a congressional commission, and would authorize a further extension of the debt ceiling at that point.
Lawmakers in both parties seized on the CBO reports to attack the other side.
Michael Steel, spokesman for Boehner, said Wednesday that the analysis of Reid's proposal "shows the Senate plan for what it is: a grab-bag of gimmicks that gives the president a blank check."
Democrats responded by arguing that Reid's plan has more guaranteed savings than Boehner's. They also promised that the final version of Reid's bill will include more savings.
Beneath the harsh partisan rhetoric, there have been signs of a growing recognition of a need for further compromise. Senate Minority Leader Mitch McConnell, R-Kentucky, called Tuesday for renewed negotiations with Obama, and indicated that his party must be willing to move away from some of its demands.
"We are going to have to get back together and get a solution here," McConnell said. "We cannot get a perfect solution, from my point of view, controlling only the House of Representatives. So I am prepared to accept something less than perfect because perfect is not achievable."
Sources close to the negotiations told CNN that Vice President Joe Biden is very much in the mix of the back-channel conversations that were occurring on a possible fallback position.
"There is no secret deal waiting in the wings," one of the sources said Wednesday night. "But there are talks with everyone at the moment."
As for McConnell, he, too is engaged in trying to figure out a way forward if neither of the current bills being considered can get enough support to get through both chambers. McConnell has said he supports the bill pushed by Boehner, but some sources have said if that plan cannot get through the Senate, McConnell will be a key person in trying to forge a compromise plan.
A source close to McConnell said he is talking with Biden "from time to time," but cautioned that "they're not negotiating or working on a deal."
In other words, the source said, "they communicate," but "they're not in talks."
Obama made a nationally televised plea for compromise Monday night but also ripped the GOP for failing to agree to tax hikes on the wealthy.
"This is no way to run the greatest country on Earth," the president said. "The American people may have voted for divided government, but they didn't vote for a dysfunctional government."
As for Boehner's plan, it appeared to be in danger of failing to win approval from the GOP-controlled House -- a development that would weaken the party's negotiating leverage on a final deal -- before the revisions analyzed Wednesday by the CBO. By the end of the day, some House Republicans indicated they might change their mind and support the measure to increase its chances for passing.
Nevertheless, the letter to Boehner signed by all 53 member of the Senate Democratic caucus made clear that they will reject the plan if it gets to the Senate.
"Your approach would force us once again to face the threat of default in five or six short months," the letter said, arguing that would bring a downgrade in the U.S. credit rating that would "cost us billions of dollars more in interest payments on our existing debt and drive up our deficit."
The Democratic senators also warned that the Boehner plan would enable House Republicans to next year "once again hold the economy captive and refuse to avoid another default unless we accept unbalanced, deep cuts to programs like Medicare and Social Security, without asking anything of the wealthiest Americans."
"We must work together to avoid a default the responsible way -- not in a way that will do America more harm than good," the letter concluded.
At their caucus meeting earlier Wednesday, House Republicans argued over a full-blown revolt among rank-and-file conservatives who believe the speaker's plan doesn't do nearly enough to slow the growth of government.
Several members were furious when they learned that staff members for the Republican Study Committee -- a group of fiscally conservative legislators -- had sent e-mails to outside groups encouraging them to put pressure on fellow Republicans to oppose Boehner's plan.
Ohio Republican Jim Jordan, who heads the committee, apologized at the start of the meeting, indicating his staff sent the e-mails without his knowledge, according to GOP sources. After Jordan spoke, several members shouted out that Jordan's top aide, Paul Teller, should be fired.
House GOP sources told CNN that one of the e-mails, sent by a junior study committee staffer, included a target list of 30 committee members and urged the outside groups to lobby against those Republicans back in their districts. In addition, Teller e-mailed these groups after a GOP meeting Tuesday to alert them that the House GOP plan, which Jordan had already publicly opposed, was gaining support.
One of the targeted committee members, Indiana Rep. Todd Young, asked why he was paying dues to a group that was now attacking him. Oregon Rep. Greg Walden read Teller's e-mail out loud and asked him to explain, but according to Republicans in the meeting, Teller declined.
Brian Straessle, spokesman for the Republican Study Committee, apologized in a statement, saying the e-mail campaign was not authorized by Jordan or members of the committee staff.
Jordan told CNN on Tuesday that he opposed Boehner's plan because it was weaker than an earlier "cut, cap and balance" measure that was passed by the House but dismissed by the Democratic-controlled Senate.
"I'm not voting against the speaker, but I'm voting against this plan," Jordan said. Asked if Boehner had the votes to pass the measure in the House, Jordan said: "I don't think so now."
A group of conservative senators released a letter Tuesday calling the Boehner plan insufficient, and arguing that Republicans should reject it in favor of the "cut, cap and balance" plan previously passed by the House and dismissed by the Senate.
"For many reasons, we cannot support this bill and urge you to protect the American taxpayers by strongly opposing this bill," said the letter from Republican Sens. Jim DeMint of South Carolina, Rand Paul of Kentucky, Mike Lee of Utah and David Vitter of Louisiana.
The White House, meanwhile, released a statement noting that Obama's senior advisers will recommend a veto if Boehner's bill reaches the president's desk. Obama has endorsed Reid's plan, but has also acknowledged it has little chance of getting passed in the GOP-led House.
Both the Reid and Boehner plans provide a path to raise the debt ceiling through the end of 2012, but differ in terms of scope and requirements for future congressional action.
Reid's blueprint calls for roughly $2.7 trillion in savings over the next decade -- the assertion now called into question by the Congressional Budget Office -- while also raising the debt limit by $2.7 trillion, an amount sufficient to fund the government through the next election.
Democrats insist it would be economically dangerous to force a repeat of the current debt ceiling debate in the middle of a presidential campaign; Republicans accuse the Democrats of putting Obama's electoral considerations before the national welfare.
Reid's plan would cut spending by $1.8 trillion as part of the total $2.2 trillion in savings, according to the CBO. Roughly $1 trillion in the savings are based on the planned U.S. withdrawals from military engagements in Afghanistan and Iraq. Limiting future discretionary spending would save another $751 billion, and an estimated $375 billion would be saved in interest payments due to reduced borrowing because of the spending cuts.
Reid's plan also would establish a congressional committee made up of 12 House and Senate members to consider additional options for debt reduction. The committee's proposals would be guaranteed by a Senate vote with no amendments by the end of the year.
Reid has insisted his plan meets key GOP demands such as no increased taxes. Boehner, however, argued this week that Reid's "doesn't deal with the biggest drivers of our deficits and debt" -- popular entitlement programs such as Medicare.
Boehner's plan, on the other hand, would require two separate votes by Congress to increase the debt ceiling in a package that was intended to include approximately $1.2 trillion in spending cuts over the next decade while setting up a special congressional committee to recommend additional savings of $1.6 trillion or more.
Any failure on the part of Congress to enact the mandated spending reductions would trigger automatic across-the-board budget cuts.
The plan also calls for a congressional vote on a balanced budget amendment to the Constitution by the end of the year. It would allow for combined debt ceiling increases of up to $2.5 trillion.
A CNN/ORC International Poll reveals a growing public exasperation and demand for compromise. Sixty-four percent of respondents to a July 18-20 survey preferred a deal with a mix of spending cuts and tax increases. Only 34% preferred a debt reduction plan based solely on spending reductions.
According to the poll, the public is sharply divided along partisan lines; Democrats and independents are open to a number of different approaches because they think a failure to raise the debt ceiling would cause a major crisis for the country. Republicans, however, draw the line at tax increases, and a narrow majority of them oppose raising the debt ceiling under any circumstances.
CNN's Ted Barrett, Kate Bolduan, Keating Holland, Brianna Keilar, Gloria Borger, Jeanne Sahadi, Xuan Thai and Deirdre Walsh contributed to this report.
July 27th, 2011
ABC News' Sunlen Miller (@sunlenmiller) reports:
As Speaker of the House John Boehner is looking for votes on his House debt bill, one Senate Republican sent a strong message to the Tea Party block in the House and Senate that are still withholding their support: get on board.
Senator John McCain’s, R-AZ., message was in particular aimed at those who are withholding their support for any debt ceiling bill – Republican or Democratic – holding the Balanced Budget Amendment passage as a precondition to the debt limit increase.
“To hold out and say we won't agree to raising the debt limit until we pass a Balanced Budget Amendment to the constitution. It’s unfair, it's bizarre,” McCain railed on the Senate floor, “And maybe some people have only been in this body for six or seven months or so really believe that. Others know better."
Many of the most conservative members of the House have said they will not vote for any debt ceiling increase that does not include a Balanced Budget Amendment and deeper spending cuts. Similarly, some conservatives Republicans in the Senate have said the same.
McCain called this “amazing,” foolish” and “deceiving” that some members believe that this can happen, now with only 6 days left until the nation defaults on its debts with the August 2 deadline for action looming.
“To somehow think or tell our citizens that if we have enough debate and amendment here in the Senate in the short term in the next six days that we will pass a balanced budget amendment to the constitution is unfair to our constituents,” McCain said.
McCain is a supporter of a Balanced Budget Amendment but does not believe that the station now, just six days away from the August 2 deadline for action, is the correct time to be pushing for this when it does not stand a chance when connected to the debt ceiling increase.
And then there was a little mocking from the Senator – who has held elected office in the Congress since 1982– for his young counterparts who say that if this plays out like they’d like it to the blame would be put squarely on President Obama and the Democrats, insinuating their theory would not work out as planned.
McCain said that the Reid plan is “full of smoke and mirrors” and chastised President Obama for leading “from behind.”
McCain would vote for the Boehner plan if it passed in the House and was sent to the Senate. Many of McCain’s Republican colleagues in the Senate would not – Senators Jim DeMint, Mike Lee, Lindsey Graham, and Rand Paul – have all come out against the Boehner plan, saying they will vote no if the bill comes to the Senate.
July 27th, 2011
Posted on YouTube by McMorrisRodgers
July 27th, 2011
Stocks plunged Wednesday as the U.S. edged closer to defaulting on its debt and the economy showed more signs of deteriorating. Major indexes gave up all of their gains for the month.
The Dow Jones industrial average fell 198.75 points, or 1.7 percent, to 12,302.55, its biggest one-day drop since early June. It has fallen for four days straight.
The S&P 500 fell 27.05 points, or 2 percent, to 1,304.89. The technology-focused Nasdaq composite index fell 75.17 points, or 2.7 percent, to 2,764.79, its worst day in five months.
The Dow is headed for its worst weekly decline in nearly a year and is now 4 percent below the 2011 high it reached on April 29. The S&P, which serves as a benchmark for most mutual funds, is also down 4 percent from its recent peak.
"As hours pass and the uncertainty builds, I think the market is starting to price in the potential that we might not have a solution by August 2," the deadline for raising the U.S. debt limit, said Channing Smith, managing director of Capital Advisors Inc. "Confidence in our political system is beginning to fade."
Nearly half of the Dow's losses came in the last two hours of trading, after the Federal Reserve released a survey showing that the economy deteriorated in much of the country this summer. The economy slowed in seven of the Fed's 12 regions because of weak home sales and a slowdown in manufacturing.
The declines were broad. More than 10 stocks fell for every one that rose on the New York Stock Exchange, and all but two of the 30 stocks in the Dow average fell.
With no sign of a compromise in Washington, investors are becoming more fearful that the U.S. rating could be lowered. That would raise interest rates and slow down the already weak economy.
Small-company stocks fell more than the rest of the market. Small companies are more vulnerable to economic downturns since they make fewer products and usually have less cash on hand than large companies.
With the deadline for a debt deal just six days away, investors are selling the stocks they consider to be the riskiest. The Russell 2000 index, which tracks smaller U.S. companies, fell 3 percent, almost twice as much as the Dow.
Stocks have been falling overall since last Friday as an Aug. 2 deadline for raising the U.S. borrowing limit approaches. With no sign of a compromise between Republicans and Democrats in Washington, investors are becoming more fearful that the U.S.'s triple-A credit rating could be lowered or that the country might default on its debt. Either event would raise interest rates across the board and slow down the already weak U.S. economy.
The Dow is down 3 percent this week. It is headed for its biggest weekly decline since August 2010. The S&P 500 is also down 3 percent, and the Russell 2000 is down 4.9 percent. The Dow and the S&P 500 are down about 1 percent for the month.
Some analysts fear that if the debt issue is not resolved stocks could fall as much as they did in the fall of 2008, when the House of Representatives voted down a bill to create the Troubled Asset Relief Program. The Dow plunged 778 points on Sept. 29 after the bill failed. Four days later, Congress passed the TARP bill and President George W. Bush quickly signed it into law. The Dow then jumped as much as 946 points in a week.
A decline in orders for manufactured goods also pushed stocks lower. The government said orders for durable goods fell 2.1 percent in June because of a drop in demand for commercial aircraft, automobiles and heavy machinery. Manufacturing has been disrupted this year by parts shortages from Japan and higher energy prices.
Earnings reports were mixed. Amazon.com Inc. rose 3.9 percent after the online retailer reported that its earnings and revenue were far higher than analysts were expecting.
Juniper Networks Inc. plunged 20.9 percent, the most of any company in the S&P 500, after the computer networking equipment maker issued an earnings forecast that was lower than many analysts expected.
Dunkin' Brands Group Inc. shot up 46.6 percent to $27.85 on the company's first day on the Nasdaq market. The parent of Dunkin' Donuts and the Baskin-Robbins ice cream chain went public to help pay down its debt.