President Obama to Address Nation on Debt Ceiling

From C-SPAN:

President Obama will address the nation at 9 pm ET tonight. His address comes as the Senate and the House progress on different plans on lifting the debt ceiling.

Senate Majority Leader Harry Reid (D-NV) introduced a proposal to lift the $14.3 trillion dollar debt ceiling through 2012. It includes $2.7 trillion in budget cuts.  Reid’s proposal does not include increases in revenue or cuts to entitlement programs. It “meets both sides bottom lines,” Senator Reid said.  The savings include $1.2 trillion in discretionary spending and takes into account $1 trillion is savings by ending the wars in Iraq and Afghanistan. It would also create a committee to recommend additional spending cuts in the future.

House Speaker John Boehner (R-OH) said Senator Reid’s proposal was “full of gimmicks.” He announced his two-step plan, which would raise the debt ceiling two different times and would cut spending by as much as the debt ceiling is lifted. Speaker Boehner said the plan was not “Cut, Cap and Balance” — the deficit reduction plan passed in the House on Tuesday and killed in the Senate on Friday, but “built on the principles” of the failed legislation.

The President has been winning the battle with the public so far, and seizing the bully pulpit this close to the August 2nd deadline probably won’t bode well for the GOP.  

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  1. MADCO says:

    Not like Greece. Not like Ireland or Argentina or hot money runs in SE Asia a while back. Not like LTCM or the Russian default a bit before that.

    More like …

  2. botw says:

    You say it doesn’t bode well for R’s.

    The President — who I have strongly supported — has adopted the Republican view that deficits must be dealt with right now, even though we have 9% unemployment.  That’s bad economics.

    The President has accepted the Republican notion that there must be a dollar-for-dollar cut in spending for every dollar increase in the debt ceiling.  No President has ever done that and no Congress has ever held the country hostage to that notion.

    It’s true that the President has the bully pulpit and that he is a very effective communicator.  But what exactly is he communicating and what effect will it have on the millions of families suffering from unemployment that will not be helped by slashing spending?

    Instead, how about communicating the fact that Republicans are peddling complete myths — myths such as Obama created the deficit, tax rates are historically high, the stimulus killed jobs, and public unions caused our fiscal problems.

    It’s a bully pulpit, indeed.  And you might only get it for four years.  I’d like to see it used for more than giving in to unreasonable demands, accepting the other side’s premises, and punting on first down.

    • Gilpin Guy says:

      Now instead of putting 10 million unemployed at risk, he is putting the entire planet economic well being at risk.

      It appears that the minority party is calling the shots and all he can do is be humiliated at the constant rejection and abuse being heaped on him.  Oh if he had only allowed the Bush tax cuts to expire, we would be having a different conversation.  He appeased them then and he’s going to have to appease them now.  I don’t see how that translates into great leadership.

  3. JeffcoBlueJeffcoBlue says:

    Is trying to find a way to protect Social Security and Medicare. Everything is crazy, but I support that.

    Beyond that, I’m waiting to hear from the Prez. What I want to hear is that Social Security and Medicare are off the table and we’re working from Harry Reid’s bill now. And the only thing we’re gonna do is pile on revenue!

    C’mon, Barry, channel your inner Franklin Delano. They’re full of shit. You can do this.

  4. Boehner appears to have lost control of his caucus in the House, as far as I can tell.

    Republicans won’t even talk through Reid’s proposal, which is picked and chosen 100% from previous Republican plans.

    Republicans won’t even accept real cuts to SSI, Medicare and Medicaid benefits in exchange for the closing of a bunch of tax loopholes.

    In short, they want it all, and a magical pony to boot.

    This is, by far, the most immature majority we have elected in recent history to any portion of the Federal government.

  5. botw says:

    Both speeches appear to have been written before today.

    The President talked about revenue increases even though he endorsed Reid’s plan today, which included no tax increases.

    Boehner talked about more significant cuts, though his plan announced today cuts less than today’s plan from Reid.

    • reubenesp says:

      http://www.washingtonpost.com/

      The loser, of course, is the American people.  The president says what the rank and file want him to say, but neither side has any intention of raising revenue, as you noted.

      Obama is speaking out of both sides of his mouth.  I feel deceived by my president and by Democratic members of Congress (with the exception of members of the Progressive Caucus).

      Once the deal is actually penned, and after our debt is downgraded, the public will see Washington for what it is: beholden to big moneyed special interests.  Perhaps even rank and file teapartiers will see the light.

      I suspect rank and file Democrats will be so incensed that we could see lots of primary challengers in 2012.  I would hope Obama will do the honorable thing and announce that he will not seek reelection in 2012, thus giving real Democrats the opportunity to run for the White House in 2012.

      I agree with a previous post that Congressional Democrats had an opportunity early on to do the responsible thing and let the Bush tax cuts expire accross the board.

  6. susanalt1 says:

    The Republican are dying to know what will happen if they allow the country to default on its current debts.  Not future debts, mind you, but current ones.  And they may be dumb enough to allow default to occur in order to further their agenda to a put the country in such turmoil that  Obama will not win reelection.  Think about it.    They created this massive overrun of debt under the Bush administration through bad economics, corporate and Wall Street deregulation  and 2 unnecessary wars all to make it “necessary” to do away with social security, Medicare and Medicaid and public workers. They did this deliberately, running up the debt so that when they regained control of the House and Senate they could  do away with social programs that help the poor and middle classes.  “Too expensive” they say. “Now we have to cut Medicare and all the other social programs” they say.  Not to mention the need to roll back clean air and water initiatives.  (What, don’t Republicans need clean air to breathe, too? )

    A stimulus package for the middle class would go a long way to putting Americans back to work on things that need to be worked on in this country , such as infrastructure, roads, schools, and parks.   These are essential components to our country’s survival (as is the middle class) and these projects are long overdue for spending capital.  Call it part of the Defense budget; after all, the interstate highways were built as the result of the Defense department’s goal to be able to defend the country in every state.   But get it funded.  Put America back to work. And raise taxes on the corporations and wealthiest Americans who have long held that it is not their responsibity to pay their fair share.

    • reubenesp says:

      Obama had the opportunity with his stimulus (jobs) bill to do just what you are suggesting. But he didn’t do it.

      I’m sorry, but this guy needs to announce he’s not running in 2012 to give other Democrats a chance to do a better job.

      • ellbee says:

        Want to see the economy take off?  Have him do just that.

        • Diogenesdemar says:

          All those Bush tax cuts have already rocketed our economy to prosperity, right?

          • ellbee says:

            …it’s the spending.

            • Diogenesdemar says:

              After all the deficit spending on top of the tax cuts of the Bush administration?  (I know you saw the comparison graph yesterday.)

              So, I guess, you’re argument is that Obama fucked the country by spending a few nickels after Bush & Co. emptied the entire cookie jar?

              • ellbee says:

                I’m never going to regard tax breaks as an expenditure.  The government did not earn that money.

                Obama blew it by creating an unholy mess of a “stimulus” package, and jamming his horrible ACA down the throats of a majority of the public who doesn’t want it.

                Since when does he give a crap about the deficit?  If the R’s hadn’t taken the House we wouldn’t have heard a single word about deficit reduction.  

                • Diogenesdemar says:

                  one-third the tax cuts you don’t count as an expenditure (except like now, when you do).  The ACA you incessantly rail against hasn’t begun.

                  On pure deficit spending alone Bush was the country’s all time biggest winner, but you know that too.

                  And you’re right, the only time we ever hear about a deficit is when Republicans want to use it to weigh down and obstruct any accomplishments by a Democratic President.  Because, when a Republican is President, the word “deficit” never crosses the lips of anyone in your party except in the sentence “deficits don’t matter.”

                  • ellbee says:

                    I don’t count tax cuts in the stimulus.  I count the paybacks to public unions, and the 9.2% (actual probably  17%?) unemployment after it’s been spent.

                    Why does the ACA take ten years to pay for 6 years of services?  Why don’t most of the main features of the bill kick in until 2014?

            • Diogenesdemar says:

              if those tax cuts had produced the PROMISED effect of more generated revenues (isn’t that a LAW of supply-side economics?), we’d certainly be able to afford some more spending and still reduce the debt.  What went wrong, gravity somehow failed us the last decade?  

          • reubenesp says:

            http://www.washingtonpost.com/

            I was hell bent on calling for accross-the-board expiration of the Bush tax cuts to jack up revenue.  But Larry Summers thinks otherwise:

            ” It is fortunate that the President was able last fall to lead an effort to pair extended tax cuts with payroll tax reductions – without that stimulus we might be looking at a double dip today.”

            He’s a lot smarter than I am.

            • Diogenesdemar says:

              as arguing that the Bush tax cuts shouldn’t have been expired.  Rather that it was somewhat sensible for the President to get some concessions (payroll tax reductions) as an offset for extending those cuts.  But this was not the optimal, nor likely even the best possible, option achievable at that time.

              For me, this is the money quote (pun intended):


              EK: How about the other side of countercyclical policy? It seems to me that one reason that the politics of deficit-spending are tough in recessions is that we don’t always make a show of fiscal discipline during expansions, so it’s not necessarily credible to go to the people and say we need to just binge for a little while. They think we’re bingeing all the time.

              LS: Every time I talked about this in the 1990s, I used the phrase “reload the fiscal cannon.” That’s my version of fix the roof while the sun is shining. You need to get yourself into a position where there’s room for a countercyclical response to economic downturn.  That was the tragedy of the 2001-2008 period.  Having put the Federal government in a strong position, we dissipated that position even in years when the economy was growing reasonably.  

              So I think more prudence in the good times, more automatic stabilizers, more contingent capacity to spend or cut taxes quickly. Another whole

              I’m still of the opinion that we would be in much better shape, and certainly wouldn’t be having the debt-limit standoff today, if the President had stuck to his guns and let those Bush tax cuts deficit generators expire as scheduled, number one.  And then, number two, come back with his own program of fiscally responsible, stimulative and focused tax cuts aimed at the spending  (middle- and lower-) classes.  In doing so, in effect, daring the Republicans to oppose him on a tax-cut package.

              My advice, stay with your first instinct . . .

  7. SSG_Dan says:

    Screw him and the Orange Horse he rode in on.

    Let the House vote go forward and see what the final numbers are. The Orange Man is no longer in control of the Republican’t Party, (fine by me) but no one else is either.(which is scary.)

    Teabaggers can have their “destroy it to save it” vote. I’m waiting to see how many of the tiny amount of moderate Repubs cross the Rubicon and how many come to their senses.

    Harry Reid puts his Senate plan on the floor on Thursday – after the markets have had a chance to start glowing red and soften up a bit. Think it’ll be a pretty big majority yes, with Sen Rand getting some filibuster time in before he realizes it’s smarter to shut up.

    For those of your with some free cash in your 401(K)s, I’d look at these tomorrow morning:

    SGGDX, TGLDX, IGDAX, OPGSX, ININVX

  8. harrydobyharrydoby says:

    Republicans brought us the Great Depression (Hoover), the Great Recession (GW Bush), and now clamor to bring us the Great Default (Bachmann, et al).  

    Tell me again why anyone would entrust their future to the party of economic simpletons?

    Unless the GOP manages to pass a law that you have to be employed in order to vote, they are about to create another few million votes against their crackpot agenda.

  9. cunninjo says:

    First, it proposes an additional $1.2 trillion in discretionary spending cuts, which begs the question ‘how much non-defense discretionary spending will be left?’

    Second, it cites savings from ending the wars in Iraq and Afghanistan. But I thought we already withdrew from Iraq and are in the process of withdrawing from Afghanistan. Shouldn’t those savings already be accounted for in budget projections? Where will this $1 trillion come from?

    I thought the President drew a line in the sand at revenue increases. He’s made it clear he doesn’t want a ‘cuts only’ deal, but that’s exactly what Reid is proposing. Sen. Democrats have once again shown that they are weak. President Obama needs to hold strong. The GOP knows they will be blamed for a default which means THEY will feel the pressure to cave on revenue increases. Democrats have the leverage, I just hope they use it.

    • Ralphie says:

      The GOP knows they will be blamed for a default which means THEY will feel the pressure to cave on revenue increases. Democrats have the leverage, I just hope they use it.

      They’ll get a cuts-only plan passed and force the President to veto it.  Then the President will be blamed.

      That’s the strategy, and all of their tactics thus far support it.

      • ajb says:

        While I don’t hold Reid in particularly high esteem, I don’t think he’ll let anything through the Senate that the President would veto.  

        • Ralphie says:

          Today 12:52 PM Obama Administration Issues Veto Threat

          The Obama administration has issued a formal veto threat of House Speaker John Boehner’s final debt ceiling offer.

          “The Administration strongly opposes House passage of the amendment in the nature of a substitute to S. 627,” reads a statement of administration policy from the Office of Management and Budget. “If S. 627 is presented to the President, the President’s senior advisors would recommend that he veto this bill.”

          The threat comes amid noticeable chatter that the president had strategically not mentioned the possibility of vetoing Boehner’s bill during his prime-time address on Monday evening. It also puts additional pressure on the House Speaker to find a way to meld his debt ceiling legislation with the one crafted by Senate Majority Leader Harry Reid.

          — Sam Stein

          From http://www.huffingtonpost.com/

          Maybe we’re talking the semantics of “Reid letting anything through” here, I don’t know.

      • cunninjo says:

        President Obama must veto any ‘cuts-only’ bill, considering he’s made that one of his most prominent talking points. He’ll look weak if he doesn’t. A veto at this point would be a very risky move, but I’m not so sure he’ll get blamed if it leads to a default. He’s done well at portraying House Republicans as juvenile brats who throw fits when they don’t get what they want. And the public has bought it.

        Reid’s plan certainly complicates things because it isolates the President as the only one pushing for revenue increases. I personally think Reid may have just screwed this up for the President.

        I suspect a division between the President and Harry Reid. Notice how Reid is focusing on protecting Social Security and Medicare and is less concerned about revenue, whereas the President has been open to minor cuts to Social Security and Medicare and is pushing hard for revenue increases.

        What a mess this has become  

      • PERA hopeful says:

        I don’t think there’s anything out there that will pass both houses of Congress.  The pissy little tea party brats in the House won’t agree to anything that could conceivably pass the Senate.

  10. ajb says:

    To me, the President’s speech sounded like justification for invoking the 14th Amendment:

    Whereas Congress has appropriated more spending than revenue, and

    Whereas Congress has failed to pass legislation to raise the debt ceiling, and

    Whereas the repercussions of default are potentially catastrophic,

    Resolved: Under powers granted under the 14th amendment of the U.S. Constitution, I hereby order the Treasury to issue bonds to pay Federal financial obligations.

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