John Boehner is a child and he's taking his ball home

[Landslide Lyndon]

Speaker Boehner and his cacus have done their job, they passed their plan.  The Senate killed it.  The onus is now on the Democratic Senate (and to a lesser extent, the President) to create a viable alternative.  Instead, Reid and Obama and resorted to name calling and class warfare.  Shame...

Even though, I do hope somethings comes out of the "11 o'clock meetings" tomorrow...

Why the hell is the onus only on the Democrats to create a viable alternative? The Republicans haven't presented anything viable either.

Because nobody expects anything serious from Republicans, especially the current crop of tea party fools.

[Peeperkorn]

This is like a national suicide in slow motion.

[anvi]

The idea here is simple. Pass what folks agree on (and even the Dems agree on at least 500 billion, and many of them, as to cuts), and where you don't agree, have the election decide it.  In the meantime, maybe something will congeal to do more - to wit tax reform which lowers rates while raising revenue.

The GOP would have to throw some agreed-upon tax hikes into that deal for it to have any hope of clearing the Senate.

[anvi]

BigSky,

I fault Obama greatly for not coming to the table, many months ago, with his own plan.  Simpson-Bowles handed it to him, he didn't embrace it, and now, as always, he looks like nothing more than a legislative broker, and hardly a president who leads.  This has been a mark of his lack of leadership since assuming office, and it's continuing now.

But, when you get your tale going, it's hard to know where to begin.  By law, raising the debt ceiling is the responsibility of Congress, not the president.  It was the House's decision to tie the debt ceiling to a long-term, huge budget deal in the first place.  Now that the parties can't agree on a long-term budget deal, it's the Republicans, and not Obama, who are pushing for a short-term patch until the next election.  I would add that Republicans are playing more political games with this than Obama is, even though Obama has been badly deficient in the way I've mentioned above.  By not agreeing to tax increases in any form, the Republicans are satisfying their base, while Obama, by agreeing in principle to massive changes in entitlement spending and structure, is defying his base; Obama is risking a hell of a lot more with his party in a possible deal than Republicans are risking with theirs.

Secondly, if the debt-ceiling is not raised, Obama and Congress are going to have to decide together, according to the provisions of the 1974 Impoundment and Control Act, which spending that is mandated by law, both the paying off of bonds and their interest rates and the budget priorities for this fiscal year, will be honored.  Obama did not "threaten" to unilaterally withhold Social Security checks, he said he could not "guarantee" that they would go out in August, and, as a matter of fact, he can't give such a guarantee by himself.  That's because the laws he is bound to follow in the case of a default require him to request Congressional approval for certain government bills that are due to be paid, and others to be deferred or rescinded.  And, if we do default, if we choose to pay off short-term bonds and their interest rates as they become due, so domestic and foreign investors don't immediately lose confidence in buying these instruments in the future, then we will have to cut some 40 cents on the dollar in spending for this year's budget, and cuts that deep are bound to effect everything, including Social Security payments.

If you still maintain, as you have in other threads, that the debt ceiling and default problems are "fake hysterias" being cooked up by the "political class," that's simply false.  We can't just "restructure debt" or "swap cash" on our bonds or securities through Treasury at a wash, because the cashing in of old bonds and the selling of new ones would require transactions, and the part of the transaction involving the sale of new bonds and securities could only be negotiated at much higher interest rates than the old bonds for which they were "swapped," and that would only dramatically deepen the debt crisis, not solve it.  And, if we take money out of Social Security or the Department of Education if we don't raise the debt ceiling, as you've also suggested elsewhere, that means that student loans and Social Security checks won't be sent out.  And if we just monetize the amount of the debt, as you've also suggested, as has been proven in country after country that financed their debt through printing more currency, we'll end up with hyper-inflation, which will not only be bad for the economy overall, but will make future government transactions more expensive and once again only aggravate the debt problem.

The debt-ceiling crisis is real, and it has been brought on by a reckless and inflexible House of Representatives and a pass-the-buck, legislatively inert president.  And worse, both sides have been encouraged by a dumb public.  And that's the modern situation of American democracy for you--it's proving itself to be a colossal failure right before our eyes.

[Landslide Lyndon]

Yep, it's all Obama's fault.

http://tpmdc.talkingpointsmemo.com/2011/07/white-house-we-thought-we-were-down-to-the-details.php?ref=fpblg

President Obama and White House officials earnestly believed they were closing in on a deficit-reduction deal with only three remaining sticking points until Speaker John Boehner (R-OH) pulled the rug out from under them and walked away from the negotiating table late Friday afternoon, White House officials said Friday night.

As of Thursday, Obama and Boehner had been working on a grand bargain that would produce roughly $3 trillion in savings over 10 years, the officials confirmed. But talks broke down along three major differences: the two sides were $400 billion apart on taxes, Obama rejected a last minute demand from the GOP that the deal include a repeal of the individual mandate in healthcare reform, and the two sides were still haggling over a difference of $40 billion in cuts to Medicaid, according to the White House.

Obama and Boehner had a lengthy discussion Thursday afternoon, and Obama called him back Thursday night. But the Speaker waited until 4 p.m. Friday to return the phone call with the disappointing news that he was once again walking away from the talks.

[anvi]

So, in the end, Obama asked for the Senate's package of revenue enhancements instead of what Boehner had offered on the Bush tax cuts, and Beohner asked for the repeal of the mandate and the IPAB?  God, what a train wreck.

[Torie]

Obama should not have added the 400 billion in revenues, and of course adding the repeal of the mandate is ludicrous. Heck the Pubbies have a reasonable shot that SCOTUS will do the latter for them.  The Dems on the mandate thing were dumb to not do the Torie finesse on that, which would have had better "optics" (that is the word of the week in the media so I might as well join in) to boot. Yes, it's pathetic.

[Landslide Lyndon]

It's a bit long but very enlightening.

http://www.tnr.com/blog/jonathan-cohn/92539/obama-boehner-debt-ceiling-press-conference-concessions-revenue

Nobody disputes that, except for the revenue part, the administration and Boehner had agreement over virtually everything else. And it was a deal that, like Obama’s previous offers, was strikingly tilted towards Republican priorities. Among the provisions Obama to which Obama had said yes, according to a senior administration official, were the following:

Medicare: Raising the eligibility age, imposing higher premiums for upper income beneficiaries, changing the cost-sharing structure, and shifting Medigap insurance in ways that would likely reduce first-dollar coverage. This was to generate about $250 billion in ten-year savings. This was virtually identical to what Boehner offered.

Medicaid: Significant reductions in the federal contribution along with changes in taxes on providers, resulting in lower spending that would likely curb eligibility or benefits. This was to yield about $110 billion in savings. Boehner had sought more: About $140 billion. But that’s the kind of gap ongoing negotiation could close.

Social Security: Changing the formula for calculating cost-of-living increases in order to reduce future payouts. The idea was to close the long-term solvency gap by one-third, although it likely would have taken more than just this one reform to produce enough savings for that.

Discretionary spending: A cut in discretionary spending equal to $1.2 trillion over ten years, some of them coming in fiscal year 2012. The remaining differences here, over the timing of such cuts, were tiny.

...

The main difference, as both sides acknowledge, was over the size of the new revenue. They’d basically settled the basic principles of how to get the money: By closing loopholes, broadening the base, and lowering rates overall. Boehner had offered $800 billion, or roughly the equivalent of letting the upper income tax cuts expire. Obama had counter-offered $1.2 trillion. But even the $1.2 trillion Obama was seeking – and remember, this was a proposal over which the White House says it expected to keep negotiating – was still far less than the revenue either the Bowles-Simpson chairmen or the Senate’s Gang of Six, two bipartisan groups, had recommended.

Or, to put it more simply, both proposals were far more tilted towards the Republican position, of seeking to balance the budget primarily if not wholly through spending cuts. When this debate started, liberals like me were advocating a balance of spending reductions to new revenue of roughly one-to-one, which is what the Bipartisan Policy Center’s report by Pete Domenici and Alice Rivlin had recommended. But the president had been offering, right up through the end of these negotiations, plans that had ratios of roughly three-to-one or maybe worse.

The other key difference in the plans was over the specifics of that failsafe trigger: Boehner had asked it include repeal of two controversial elements of the Affordable Care Act, the requirement that everybody get insurance and the creation of the new board for adjusting Medicare payments. White House negotiators said they were taken aback, as it had never come up (at least at the staff level) before Thursday. They didn’t include that in their counter-proposal but, they said, they were willing to discuss other mechanisms.

Overall, the contents of this deal aren’t radically different from the one Obama and Boehner were discussing two weeks ago, the one that had conservatives like David Brooks understandably thrilled and liberals like Paul Krugman just as understandably aghast (In a sense, it was "starving the beast" in the way conservatives have long imagined.) Now Republicans have walked away from that deal, twice. And keep in mind that even if Boehner had presented this deal, there's a very good chance he couldn't round up enough Republican votes to pass it.

It’s a striking contrast to the behavior of the Democrats, as Obama pointed out:
And I think that one of the questions that the Republican Party is going to have to ask itself is can they say yes to anything? Can they say yes to anything? I mean, keep in mind it’s the Republican Party that has said that the single most important thing facing our country is deficits and debts. We’ve now put forward a package that would significantly cut deficits and debt. It would be the biggest debt reduction package that we’ve seen in a very long time. ...

    And to their credit, Nancy Pelosi, Harry Reid, the Democratic leadership, they sure did not like the plan that we are proposing to Boehner, but they were at least willing to engage in a conversation because they understood how important it is for us to actually solve this problem. And so far I have not seen the capacity of the House Republicans in particular to make those tough decisions.

It was a bit later he described himself as a “Democratic president,” as part of an aside to reporters:
I mean, I’ve gone out of my way to say that both parties have to make compromises. I think this whole episode has indicated the degree to which at least a Democratic President has been willing to make some tough compromises. So when you guys go out there and write your stories, this is not a situation where somehow this was the usual food fight between Democrats and Republicans. A lot of Democrats stepped up in ways that were not advantageous politically. So we’ve shown ourselves willing to do the tough stuff on an issue that Republicans ran on.

[BigSkyBob]

BigSky,

I fault Obama greatly for not coming to the table, many months ago, with his own plan.  Simpson-Bowles handed it to him, he didn't embrace it, and now, as always, he looks like nothing more than a legislative broker, and hardly a president who leads.  This has been a mark of his lack of leadership since assuming office, and it's continuing now.

But, when you get your tale going, it's hard to know where to begin.

How, about by saying, "The Constitution grants the power of the purse to the Congress, not the President." If you stated that obvious fact then we could start by having Obama acknowledge that his place is to request, not demand.

There is a genunie disagreement between the sides of Obama and those whom want real reform [a group that just might not include Boehner] about the wisdom of  tax increases. There is, allegedly, a broad agreement on certain cuts. A deal could be struck today if Obama didn't insist on inserting a poisoned pill.


Personally, I reject as false the premise the political class must be bribed with a tax increase to cut spending.


Your analysis about interest rates and selling social security trust fund public debt is simply false. If we blithefully raise the debt ceiling,  the debt owed the public will rise another trillion plus dollars over the next year. If we don't raise the debt ceiling, and we sell social security trust fund bonds to stay within the debt ceiling, the total debt owed the public will rise exactly same amount, having exactly the same upward pressure on interest rates. [The swaps of low-yield treasuries for smaller treasuries    at a higher rate will have absolutely no effect on interest rates precisely because such swaps would be exactly a wash.]

Again, just switching from treasuries to other investment classes in the social security trust fund could put the day of reckoning off by years.

Again, you have equated failing to raise the debt ceiling with "default." No one has spoken of "default." The real option is an emergency balanced budget. Talk of "default" is highly irresponsible, and an example of the false hysteria I rail against.


I am glad to read you realize that monetizing the debt is playing with fire. Well, we are already down that road, read "QE1" and "QE2."   If you don't think the political class will resort to QE3 rather  than cutting back, I think you are bit naive.


Again, I must repeat, while the debt ceiling needs to either be raised someday, else very large cuts, that day isn't August 2nd. There is enough maunevering room within the current ceiling to continue business as usual for a year, or two, more before any real "crisis." The talk about  August 2nd being doomsday is precisely false hysteria.

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[Brittain33]

The problem with Simpson-Bowles is that, whether or not it was a good proposal, it didn't even get the support of its own panel. Simpson and Bowles simply announced their plan because it wasn't going to pass a vote. Paul Ryan votes against it in the panel.

We all know from copious experience that if Obama had "embraced" a plan that Republican support among current legislators (nor retired grandees like Simpson) would immediately have gone to zero. I think it strains the limits of equivalence to hold Obama at fault here. He wants a big compromise and will propose the cuts to make it happen. His problem is that too many Republicans refuse and he can't get enough Democrats to support a plan that is 80% of what Republicans want.

Republicans need to be honest in where they ascribe blame for the impasse. The independent voters have certainly reached the correct conclusion based on the polls.

[Torie]

A clear majority of the deficit reduction panel agreed upon a plan, including Crapo and Coburn.  The minority that would not sign off were the most ideologically extreme of both parties - yes both parties. I might add that it is the House in particular that has the power of the purse.  And the House will not fund the size and scope of government that most Democrats want. So it's a standoff.  That is why it would be wise to enact the cuts that a majority in Congress agree are sensible. Unless of course most Dems oppose any cuts absent getting more revenues - except of course for defense - and would prefer the status quo to that option. I would like to think that is not the case.

It can be tested by the debt ceiling being raised to the point where all but what the Dems said they would cut right now.  Then the Dems can decide whether to live with that until the election, or until a tax reform bill is passed, or in lieu thereof, manage an immediate 30% cut in revenues. I cannot imagine that they would prefer the latter. We shall see if the Pubbies go the route that I suggest.

[Landslide Lyndon]

A clear majority of the deficit reduction panel agreed upon a plan, including Crapo and Coburn.  The minority that would not sign off were the most ideologically extreme of both parties - yes both parties. I might add that it is the House in particular that has the power of the purse.  And the House will not fund the size and scope of government that most Democrats want. So it's a standoff.  That is why it would be wise to enact the cuts that a majority in Congress agree are sensible. Unless of course most Dems oppose any cuts absent getting more revenues - except of course for defense - and would prefer the status quo to that option. I would like to think that is not the case.

It can be tested by the debt ceiling being raised to the point where all but what the Dems said they would cut right now.  Then the Dems can decide whether to live with that until the election, or until a tax reform bill is passed, or in lieu thereof, manage an immediate 30% cut in revenues. I cannot imagine that they would prefer the latter. We shall see if the Pubbies go the route that I suggest.

Have you read the article I posted?
Obama could embrace the Ryan budget for all we know and the Republicans would suddenly present new demands. These people aren't interested in finding a solution, they are interested only in scoring points and providing Rush Limbaugh with an audience.

[Torie]

Yes, I read it.  I don't agree with its spin.  It dodges the fact that Obama suddenly demanded 400 billion more in revenue, which is something that would have caused the Pubbies in the House given the "optics" to just say no. Obama is just a trapped by his base and Boehner is with his, and has acted like it. That is the way I see it anyway.  So we need to ratchet up the crisis a bit, and see if the parties can do what they both agree needs to be done (yes, as part of bigger plans as to which there is no agreement, but nevertheless agree is sensible standing on its own), and leave the balance for another shoot out in the public square, as it were.  

In the end if voters keep electing enough Pubbies to the House that just won't fund the kind of Leviathan that the Dems want, then it just won't be. That is the way our government is supposed to work. So the Dems need to take back the House, or scale their dreams back - way back.

[Landslide Lyndon]

Yes, I read it.  I don't agree with its spin.  It dodges the fact that Obama suddenly demanded 400 billion more in revenue, which is something that would have caused the Pubbies in the House given the "optics" to just say no. Obama is just a trapped by his base and Boehner is with his, and has acted like it. That is the way I see it anyway.  So we need to ratchet up the crisis a bit, and see if the parties can do what they both agree needs to be done (yes, as part of bigger plans as to which there is no agreement, but nevertheless agree is sensible standing on its own), and leave the balance for another shoot out in the public square, as it were.  

In the end if voters keep electing enough Pubbies to the House that just won't fund the kind of Leviathan that the Dems want, then it just won't be. That is the way our government is supposed to work. So the Dems need to take back the House, or scale their dreams back - way back.

Sorry Torie, but you sound like Bob. Obama made concessions unheard of for a Democrat and he managed once again to soothe his caucuses. It's Bhoener who failed to do the same.
Like the article says, when Brooks and Frum are thrilled and Krugman aghast, you can't say with a straight face that it was an unsatisfying deal for Republicans.

[Torie]

We will just have to agree to disagree on this one. One thing I do know. Team Obama will not be getting that extra 400 billion in revenue!  

You know, as an aside, maybe someday, the US parties will get the memo that one of the major components of getting out of the box is means testing entitlements. They need to hire the Tories as consultants, because that is what David Cameron's government is doing and did.  He is making his voters in the Tory Highlands of Kent and Sussex counties get less in entitlements.  What a concept!

[tpfkaw]

Where would we be without CONSERVATIVES LIKE DAVID BROOKS?

I suppose we'd be blissfully ignorant of Obama's pant-crease.

[Grumpier Than Uncle Joe]

Yes, I read it.  I don't agree with its spin.  

Then px will discard whatever you said after this sentence.  You must agree with every article he posts, period.

[BigSkyBob]

Where would we be without CONSERVATIVES LIKE DAVID BROOKS?

We would be in a world in which "conservatives" were conservative.

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[Brittain33]

Ok, since the house has the "power of the purse", they get to decide what is done, by which you mean the republican caucus, by which you mean the marginal votes past 218 needed to pass something, I.e. The 219th least conservative Republican, which is something like the 40th most conservative Republican in the most conservative Congress since the 1940s, and if Obama and the Dems don't go along with it, "a pox on both their house." No.

[Torie]

Ok, since the house has the "power of the purse", they get to decide what is done, by which you mean the republican caucus, by which you mean the marginal votes past 218 needed to pass something, I.e. The 219th least conservative Republican, which is something like the 40th most conservative Republican in the most conservative Congress since the 1940s, and if Obama and the Dems don't go along with it, "a pox on both their house." No.

That is how the system works Brittain33.  Yes, it would be better to have a parliamentary system. But we don't and never will, and such is life. If you don't like it, work to make the 218th vote in the House moving from right to left much more over there to the left. Work towards making it happen for the House members elected in 2022, after the 2021 redistricting perhaps. 

[Brittain33]

No, that is not how the system works. It only works that way if you think Dems want to raise the debt ceiling and Republicans don't. That is how many Republicans feel right now. But what we are going to see is either a panic in the Republican caucus or, a few days later, a panic on wall street that forces them to bend, because your Pubbies have drawn a line in the sand against any deal. If you want more evidence to test your theory, here is a lagniappe: consider the influence of the 30th most liberal Dem in the house in 2007.

[BigSkyBob]

Yes, I read it.  I don't agree with its spin.  It dodges the fact that Obama suddenly demanded 400 billion more in revenue, which is something that would have caused the Pubbies in the House given the "optics" to just say no. Obama is just a trapped by his base and Boehner is with his, and has acted like it. That is the way I see it anyway.  So we need to ratchet up the crisis a bit, and see if the parties can do what they both agree needs to be done (yes, as part of bigger plans as to which there is no agreement, but nevertheless agree is sensible standing on its own), and leave the balance for another shoot out in the public square, as it were.  

In the end if voters keep electing enough Pubbies to the House that just won't fund the kind of Leviathan that the Dems want, then it just won't be. That is the way our government is supposed to work. So the Dems need to take back the House, or scale their dreams back - way back.

Sorry Torie, but you sound like Bob. Obama made concessions unheard of for a Democrat

The Democratic conception of "concessions" are:


1) In order to "cut" spending in the short run they must be bribed with permanent tax increases that are vastly larger in the short run than the agreed spending cuts are in the short run; and


2) The spending "cuts" agreed to in the long run are not binding.


The Democratic position is to posture about cutting spending rather than doing it.

Of course, there is no negotiating with such a position.  It isn't serious about cutting spending. The Democratic postion is about tax and spend. They are merely exploiting this opportunity to try to ram yet another tax increase through Congress without any real spending cuts.

One Republican negotiator asked what were the spending cuts proposed for the new fiscal year in the Biden plan. The answer was less than two billion dollars. And, that wasn't an actual cut, merely an offset to much larger increases in spending elsewhere.

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[Torie]

No, that is not how the system works. It only works that way if you think Dems want to raise the debt ceiling and Republicans don't. That is how many Republicans feel right now. But what we are going to see is either a panic in the Republican caucus or, a few days later, a panic on wall street that forces them to bend, because your Pubbies have drawn a line in the sand against any deal. If you want more evidence to test your theory, here is a lagniappe: consider the influence of the 30th most liberal Dem in the house in 2007.

Let us get off the debt ceiling and focus a moment on just taxing and spending. The House needs to agree on that. It has the right not to.  The dice are loaded in our system against taxing and spending, because the entire troika needs to agree on that. And the Pubbies should make that point a bit more I think.

 I am not sure why the debt limit thing rather than the budget was used to force this confrontation, and just why it was thought to be a better vehicle. Maybe the budgeting and appropriations process is just too F'ed up to be worth much anymore. I don't know.

[BigSkyBob]

No, that is not how the system works. It only works that way if you think Dems want to raise the debt ceiling and Republicans don't. That is how many Republicans feel right now. But what we are going to see is either a panic in the Republican caucus or, a few days later, a panic on wall street that forces them to bend, because your Pubbies have drawn a line in the sand against any deal. If you want more evidence to test your theory, here is a lagniappe: consider the influence of the 30th most liberal Dem in the house in 2007.

Again, this is highly irresponsible rhetoric. Wall Street is populated with people on the sunnyside of the Bell Curve. They are fully aware that no default is imminent. Falsely raising the specter of "default" only jeopardizes the credit rating of this county.

The reality is that if a debt ceiling increase was packaged with clean spending cuts agreeable to the House, Senate, and President, our credit outlook would be improved over merely just raising the debt ceiling.

As I said before, Obama is merely deliberately playing brinksmanship in order to raise taxes with the political benefit of having the Republicans in Congress play the role of GWHB breaking a solemn vow to the American people.

[Sbane]

Yep, it's all Obama's fault.

http://tpmdc.talkingpointsmemo.com/2011/07/white-house-we-thought-we-were-down-to-the-details.php?ref=fpblg

President Obama and White House officials earnestly believed they were closing in on a deficit-reduction deal with only three remaining sticking points until Speaker John Boehner (R-OH) pulled the rug out from under them and walked away from the negotiating table late Friday afternoon, White House officials said Friday night.

As of Thursday, Obama and Boehner had been working on a grand bargain that would produce roughly $3 trillion in savings over 10 years, the officials confirmed. But talks broke down along three major differences: the two sides were $400 billion apart on taxes, Obama rejected a last minute demand from the GOP that the deal include a repeal of the individual mandate in healthcare reform, and the two sides were still haggling over a difference of $40 billion in cuts to Medicaid, according to the White House.

Obama and Boehner had a lengthy discussion Thursday afternoon, and Obama called him back Thursday night. But the Speaker waited until 4 p.m. Friday to return the phone call with the disappointing news that he was once again walking away from the talks.

Getting rid of the individual mandate? How is that negotiating in good faith?