Make or break week on debt limit

Senate Minority Leader Mitch McConnell (R-KY) makes a point about his meeting with President Barack Obama regarding the country's debt ceiling, during a news conference at the Capitol in Washington May 12, 2011. REUTERS/Jonathan Ernst

U.S. lawmakers working to rein in the country’s rising debt said on Monday they will have to make substantial progress this week to ensure the country retains its top-notch credit rating.

Democrats and Republicans said they face a crucial series of talks as they try to find the trillions of dollars in budget savings that will allow Congress to cover the country’s borrowing needs through the November 2012 election.

“I’d say if we haven’t made enough progress by the end of this week we’re really going to have to reassess the situation,” Republican Senator Jon Kyl told reporters.

Other Republicans have suggested Congress might have to opt for a short-term fix if the group can’t reach a deal soon — a scenario that recalls the protracted brinkmanship of a budget battle that took the government to the edge of a shutdown earlier this year.

Vice President Joe Biden is set to lead talks on Tuesday, Wednesday, Thursday and possibly Friday. Democratic Representative Chris Van Hollen said the group aimed to get a rough deal in place by the end of the week.

“We’ve also held open Friday for a number of hours of meetings if we’re not able to get some kind of agreement in principle by the end of the week, certainly by the end of this month,” Van Hollen said on the MSNBC news network.

The Treasury Department has warned the country could default on its debt if Congress doesn’t raise the $14.3 trillion debt limit by August 2, a scenario that could push the country back into recession and upend financial markets.

President Barack Obama and House Speaker John Boehner, the top Republican in Washington, are expected to hammer out the final terms of the deal once the group wraps up its work. The two played golf together on Saturday.

Republicans have said that any debt-limit increase must be paired with a deficit-reduction package of equal size — at least $2 trillion to ensure Congress does not have to touch the politically toxic issue again before the elections.

STARK DIVIDE ON TAXES

Though the two sides have agreed in principle on a number of spending cuts, they still must overcome a stark divide over some of the biggest-ticket items on the ledger. Republicans have said they will not support any tax increases, while Democrats have resisted cuts to popular health programs.

Kyl outlined other elements Republicans want to see in the deal: a reduction in annual spending programs; slowed growth in healthcare and other benefit costs; and mechanisms to ensure Washington’s resolve does not weaken in coming years.

“Unless we do those things I don’t think many people on my side of the aisle are going to have an appetite for increasing the debt ceiling,” he said in a speech on the Senate floor.

If the Biden group does not reach a deal soon, Congress could opt to pass a smaller package that would cover the country’s borrowing needs for a month or two, requiring another painful vote. That’s a prospect neither party says it wants.

“I hope we don’t have to,” Democratic Senator Max Baucus, a participant in the talks, told reporters. “It’s far preferable if it’s increased to a date past the end of 2012.”

The White House is “very focused on the need to move with speed” on raising the debt ceiling, spokesman Jay Carney said.

U.S. budget deficits in recent years have hovered at their highest levels relative to the economy since World War Two. The deficit for the current fiscal year, which ends September 30, is projected to hit $1.4 trillion.

Deficit-reduction efforts have been complicated in recent weeks by signs that economic recovery may be weakening. The White House has floated a payroll tax cut to spur growth, but Republicans have not been enthusiastic about the idea.

Carney said Washington will have to balance stimulus efforts with the need to set the nation’s finances on a sustainable course.

“This is about achieving the right mix of decisions within a broader package, both within the deficit reduction talks and broadly going forward from there, that allow for the economy to continue to grow and create jobs,” Carney said.

Copyright © 2011 Reuters

23 Responses to "Make or break week on debt limit"

  1. John  June 21, 2011 at 1:23 pm

    Hey, what happened to griff and almandine? They used to be regulars here.

    • griff  June 21, 2011 at 5:56 pm

      Doug was having a bad day and booted me for making a simple comment on a story about six weeks ago, even though I wasn’t violating any rules. Again

      • Doug Thompson  June 21, 2011 at 9:46 pm

        Sorry Griff but that’s a lie. I never booted you.

        After John commented on your absence, I checked the Akismet spam filter and found both you and Almandine flagged over links. It’s something the filter does automatically without my involvement. I sent you this email at 2:47 p.m. telling you this and apologizing for not catching it earlier:

        Michael:

        My apologies. I was cleaning out the spam filter today and found that you had got caught up in it with a post a while back that had more than two links in it. Apparently that threw a block into things. I’ve been tied up with a sick mother and haven’t spent as much time on CHB as needed. I’m sorry. It was an automatic thing and I was unaware of it until I was checking today.

        Doug

        Instead of even acknowledging the email you chose to come on here more than two hours later and make a claim that is untrue. Why do you do that?

        And just what comment do you claim I booted your for? The last exchange that you and I had was on April 29 in the comments section of this article:

        http://www.capitolhillblue.com/node/40647

        I did not accuse you of breaking any rules nor did I “boot” you. I simply suggested that you might need a break because of your penchant for wanting to pick a fight and overlooking the facts. For example, you accused CHB of ignoring Ben Bernanke’s historic press conference when we had — in fact — run a 923-word article on the press conference a week before. When I pointed that out you chose to ignore it.

        You were never “booted” or “banned” or punished in any way by me. You were flagged by the automatic spam filter and the server log shows the flag came from a post with more than two links. I’ve been pre-occupied with a dying mother the last two months and had not checked the spam filter to clear any flags the needed attention. When I found it I cleared it.

        You always seem to come in here with a chip on your shoulder and spoiling for a fight. What I can’t figure out is why.

        • griff  June 22, 2011 at 7:24 am

          Sorry Doug but I don’t check my email very often these days, working two jobs and all.

          Was it I that was spoiling for a fight that day? I made a comment on the article, which happened to be the story of the day. Maybe I ignored the Bernanke story because it didn’t catch my eye. Or maybe I ignored it because I didn’t want to seem like I was “dominating” the discussion.

          Or maybe I just don’t give a damn. Either way, I didn’t start that fight. I made a comment, which is what you welcome here.

          I’m sorry about your mother.

          • Doug Thompson  June 22, 2011 at 7:34 am

            Thanks for the consolation about my mother. Whatever sparked the discussion that day is past and I suggest we move on. The bottom line is that you were never “booted.” I very, very seldom boot anyone and usually do it only as a last resort.

            Yes, I welcome comment. Yes, I love debate. I don’t like it when the debate gets personal. Sometimes, I lose my temper. It happens less now than it used to and it takes a lot to rile me these days. Life is too short and I’ve come to peace with myself.

            Let’s chalk it up to lessons learned on both sides.

            • griff  June 22, 2011 at 5:55 pm

              Some days life seems a little too long. See ya on the front page.

    • Almandine  June 21, 2011 at 11:44 pm

      Well, hey John… have tried to post a few times lately, but to no avail. Guess I’ll try again.

      • Almandine  June 21, 2011 at 11:44 pm

        Hot damn!

        • Doug Thompson  June 22, 2011 at 12:08 am

          As I told you in an email this afternoon, I discovered you and some other had run afoul of Akismet, our spam filtering service. I’ve been distracted by family issues and haven’t checked it as often as I should. My apologies.

          • Sailcat  June 22, 2011 at 10:24 am

            No problemo. To quote Doug Thompson – Life is too short…

  2. Doug Thompson  June 21, 2011 at 1:26 pm

    Beats the heck out of me. Both just stopped coming around or commenting.

  3. Rick  June 21, 2011 at 4:48 pm

    Funny how they both vanished when the FBI upped the pace on trying to find Whitey Bulger and his girlfriend.

    • Doug Thompson  June 21, 2011 at 9:38 pm

      Actually, I found both flagged by the spam filter. They had submitted comments with more than two links and the automatic filter kicked in.

    • b mcclellan  June 21, 2011 at 11:41 pm

      Whitey has a girl ?

  4. b mcclellan  June 21, 2011 at 10:47 pm

    Lack of content ?

    • Almandine  June 21, 2011 at 11:47 pm

      Too much, Bryan…

  5. b mcclellan  June 21, 2011 at 11:26 pm

    Thanks Doug, I’ll be good.

    The right mix of decisions with K street packaging and they selectively fall down in the up position..
    Stage props, all are lips of little verifiable expertise.
    Sing little song bird’s, you’re in the real movies now, don’t forget your tee time.

    Or do they marshal in line for their version of food stamps deluxe, leaving their brethren nary a scrap at the back door of their conscience ?

  6. Carl Nemo  June 22, 2011 at 4:42 am

    I’ve learned from my past mistakes that posting two links will get one blocked by Akismet or at least put the content into moderation. I was once blocked for several weeks by the filter. It takes time on Doug’s part to get one released.

    Glad to see you folks rising above the waves to make some comments. I became concerned that illness or an accident had occurred. Welcome back to the fray of shared opinions. : )

    Carl Nemo **==

  7. Carl Nemo  June 22, 2011 at 5:14 am

    “Republicans have said they will not support any tax increases, while Democrats have resisted cuts to popular health programs.” …extract from article

    Seemingly these representative ‘boneheads’ are spring-loaded in the stupid position.

    Has it occurred to them we need both serious cuts “and” taxes raised to get out of our financial fix? If any tax is implmented, the proceeds from such can only be dedicated to reducing our soaring debt plus interest with such tax revenues applied to reducing principle on an annual basis. We’ll call it a ‘surplus’ as a function of this special taxation. Canada has done so; ie., applying surpluses to reduce their national debt and so can we as a nation. It will also make us feel well about ourselves that we doing something constructive to pay our national ‘bills’.

    A VAT tax along with an imbedded ‘sin’ tax on lottery games, casinos and other such frivolous endeavors could slowly but surely dig our way out of insolvency, but it must be linked to only to debt reduction along with massive, serious spending cuts now and into the future.

    Will they do this? Not only no, but hell no! Their collective attitude is “I’ve got mine”…relative to their pay, percs and connections; ie., an assured place in the ‘bunker’ post holocaust or mass civil unrest post a finanicial collapse. For the rest of us it’s “screw you”…no?

    Carl Nemo **==

    • logtroll  June 22, 2011 at 7:07 pm

      “A VAT tax along with an imbedded ‘sin’ tax on lottery games, casinos and other such frivolous endeavors could slowly but surely dig our way out of insolvency.”

      10-4, Cap’n Nemo, especially a tax on the leetle gaming operation called Wall Street! It’d be a sin not to!

      • Carl Nemo  June 22, 2011 at 8:05 pm

        Agreed…!

        How about 10% on every stock transaction fee and 1% on every institutional level transaction where millions of shares are bought and sold in the blink of an eye. When market makers move shares, it’s in the millions at a time either a buy or sell order, so this would be a surcharge on their crooked, but ‘legal’ casino activities, the same would for commodity trades too. In fact America has become one big ‘gaming op’ for the deep pocket money guys that have managed to turn this nation into such for their pirate capitalist ends.

        America’s manufacturing infrastructure has been intentionally ‘murdered’ turning into simply a “FIRE economy” ; one based on flaming ‘hot’ paper assets; I.E. , Finance, Insurance and Real Estate.

        It will also be the undoing of this nation. : |

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

        Carl Nemo **==

  8. rick  June 22, 2011 at 9:30 am

    I use to post under Bogofree and now Rick since at the same time that the others vanished so did my ability to sign on as Bogo. It also happened at the same time I posted two links that were both innocuous so I didn’t think it was that and maybe a filter. Also were a mod dumps someone (I have a Red Sox site with a few others) we block the address so no matter what they sign up as it won’t fly. That didn’t happen so my assumption was some tech mess up.

  9. woody188  June 22, 2011 at 11:40 pm

    It’s hump day. So I guess it’s break and not make it?

    Was the Obama troop withdrawal announcement supposed to distract from this?

Comments are closed.