GOP Driving

GOP Leaders 'Still Refuse To Negotiate In Good Faith'

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Speaking on the Senate floor early Saturday evening, Senate Majority Leader Harry Reid dismissed a suggestion made just hours earlier by Senate Minority Leader Mitch McConnell that Democrats and Republicans were inching closer to striking a deal to raise the deficit limit.

"It's fair to say that the engagement there is not in any meaningful way," Reid said. "Republican leaders still refuse to negotiate in good faith."

Reid said the notion both sides are making progress toward reaching an agreement is "not true."

President Obama urges both Republicans and Democrats to take action to avoid defaulting for the first time in our nation’s history.

The Chart That Should Accompany All Discussions of the Debt Ceiling

It's based on data from the Congressional Budget Office and the Center on Budget and Policy Priorities. Its significance is not partisan (who's "to blame" for the deficit) but intellectual. It demonstrates the utter incoherence of being very concerned about a structural federal deficit but ruling out of consideration the policy that was largest single contributor to that deficit, namely the Bush-era tax cuts.

An additional significance of the chart: it identifies policy changes, the things over which Congress and Administration have some control, as opposed to largely external shocks -- like the repercussions of the 9/11 attacks or the deep worldwide recession following the 2008 financial crisis. Those external events make a big difference in the deficit, and they are the major reason why deficits have increased faster in absolute terms during Obama's first two years than during the last two under Bush. (In a recession, tax revenues plunge, and government spending goes up - partly because of automatic programs like unemployment insurance, and partly in a deliberate attempt to keep the recession from getting worse.) If you want, you could even put the spending for wars in Iraq and Afghanistan in this category: those were policy choices, but right or wrong they came in response to an external shock.

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John Boehner Debt Ceiling Plan May Still Trigger S&P Downgrade: Report

Minutes before House Speaker John Boehner delivered a prime-time address in which he framed his latest deficit-reduction deal as a silver bullet for the nation's economic uncertainty, reports surfaced that the plan being crafted by the Ohio Republican would potentially lead to a downgrading of the AAA credit rating of the United States.

Really interesting this afternoon, when I was talking to an investor who had met with the ratings agencies at Standard & Poor, talking about the potential of a downgrade -- which by the way could raise interest rates the same way a potential default could -- and they said the Boehner plan probably wouldn't hit the hurdle to prevent a downgrade," she added. "Even if that deal was reached, you could still get a downgrade. It is unclear whether that would happen for sure, but that would be a real possibility. Whereas the Reid plan, even though a lot of the parts of that are seen by many as gimmicks, probably would pass that hurdle and you wouldn't get that immediate downgrade. That's an interesting distinction."

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Six Costs of Not Raising the Debt Ceiling

1. Global economy: Asian and European stocks “shuddered,” on Monday, as William Alden of theHuffington Post put it, after Congress failed to reach a compromise by the end of last week. The tumble was slight for now, but Alden suggests that the fall was just the first tremors of a greater catastrophe waiting when the stalemate in Washington triggers panic on Wall Street.

2. Government programs: If the Treasury loses its authority to borrow, economist Nigel Gault of IHS Global Insight predicts that the government would have to cut its spending by 40 to 45 percent. Highway projects, federal courts, Pell Grants, and food stamps are all on the line.

3. The recovery: Gains made since the bottom fell out in late 2008 could slip away and “would no doubt have a very adverse effect very quickly on the recovery,” said Federal Reserve Board Chairman Ben Bernanke.

4. Your retirement: This one’s still up in the air. President Obama said recently that Social Security payments are on the line, should the country not be able to borrow. But budget analysts say that the administration could ensure that the checks are paid.

5. America’s credit: Standard & Poor’s said last week that there is a 50 percent chance it would cut the nation’s credit rating within the next three months. If no deal is reached, Standard &Poor’s said that the United States' credit would be reduced from AAA to D.

6. Businesses: In a no-deal scenario, businesses could squeak by without paying increased taxes. But when they see a 10 percent decrease in the gross domestic product, loss of confidence from foreign investors, and a consumer base slipping back into a recession, that tax freeze may look less appealing.

Rupert Murdoch

GOP Debt Limit Fight

Al Franken Debt Ceiling Speech: What's At Stake For Our Nation

On July 7, Sen. Al Franken (D-Minn.) took to the Senate floor to remind his colleagues and the public what is at stake in the debt ceiling fight, and excoriate Republicans for putting political gain over the good of the country.

"If the time between elections just becomes about jockeying for the next election, then what in the world is the point of getting elected in the first place?" Franken asked. "I thought we were here to work together constructively in the interest of the American people."

Talks between Democrats and Republicans stalled over the weekend, with Sen. Majority Leader Harry Reid (D-Nev.) accusing House Speaker John Boehner (R-Ohio) of taking a "'my way or the highway' approach," with Republicans pushing for a short-term deficit ceiling increase -- something Democratic leaders and the White House have ruled out.

The two sides must reach a deal by August 2 to raise the nation's debt limit in order to prevent the government from beginning to default on its debt.

In his July 7 speech, Sen. Franken laid out exactly what's at stake if the government fails to raise the debt ceiling:

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What might FDR have done about the debt limit?

It took some time, but President Barack Obama finally got mad. After Speaker Boehner ended negotiations over the so-called "grand bargain" with the White House, the president put together a hasty presser to announce the breakdown, as well as his concomitant exasperation at the fact that his political enemies just keep on picking up the football every single time he tries to kick it. The fact that Speaker Boehner walked out of the negotiations is nothing short of astonishing, given the fact that the $800 billion in revenues that constituted the GOP's "half" of the compromise were actually based not on actual increases, but rather on just the opposite: the theory that by lowering tax rates, tax revenue would increase because of growth. Of course, the fact that these newer rates had to be associated with closing egregious loopholes was just too much for Boehner's caucus. This is what it took for Obama to realize that the only form of negotiation House Republicans will accept is outright capitulation and that negotiating in good faith has no productive purpose.

But if today's tea-infused GOP were even one-tenth as sane as they were under the speakership of Newt Gingrich, the rank-and-file Democrats would have been stuck with a raw deal that would have included cuts to Social Security and Medicare benefits and even a flattening of the progressively graduated income tax—a deal that a Democratic president put on the table. Whether such a deal arose through desire or necessity is irrelevant; it would have likely demoralized Democrats while allowing the right wing to blame Obama for the very cuts that it was insisting on. And once massive spending cuts and immediate deficit reduction had been accepted in all relevant quarters as the consensus path toward financial health and fiscal responsibility, the only question left was how far Obama was willing to accede to the adamantine rigidity of the grand old tea party before deciding that a deal that was getting worse all the time was in the end not worth making.

The only recent president who has faced an economic crisis more prolonged or more severe than the one our economy faces was the progressive legend Franklin Delano Roosevelt, who faced down both the Great Depression and the Nazis with equal aplomb and bested them both, and the contrast between how Obama is handling his economic showdowns with Republicans entering his reelection and how Roosevelt handled a similar time in his presidency could not be more clear. Obama has wanted to bring the nation above politics and create a grand bargain that incorporates ideas from both parties in an attempt to prove that our country is not as divided as our politics suggests, and he has, in his own words, been repeatedly left at the altar by Republicans with no conscience who want nothing more than to destroy him and his presidency. President Roosevelt, by contrast, was ideological: he was convinced that his way of managing the economy—the Keynesian approach of government as the spender of last resort—was right, and the austerity methods of the Republicans were wrong.

Unlike Obama, Roosevelt did not accept the conservative meme that macroeconomics and microeconomics have the same fundamental principles and that government has to "live within its means like families do." Instead, Roosevelt understood that economic downturns reduce national income and that reduced national income leads to further downturn, creating a deflationary cycle that can only be broken when government steps in to put people back to work and break the cycle—a consideration that came second to balancing the budget. At a campaign speech on Oct. 1, 1936, in Pittsburgh, Roosevelt outlined exactly this case:

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Raise the debt limit for your hero Ronald Reagan’s sake

Dana Milbank had a provocative column this morning arguing that on the debt ceiling, Dems have become the new party of Ronald Reagan, and that Republicans only honor their alleged hero Reagan in the breach and not the observance. After all, Reagan presided over 18 debt ceiling hikes as President. But for a large swath of today’s House conservatives, the drive to prevent the debt ceiling from being hiked has replaced the now-forgotten push to repeal Obamacare as their number one ideological cause celebre.

Now House liberals have hit on a fun new way of emphasizing this point: They are sending a letter today to every House Republican asking them to raise the debt limit. Only the letter wasn’t written by House liberals. It was written by Reagan himself.

Here’s the text of the letter Reagan wrote to then-Senate Minority Leader Howard Baker in 1983, a copy of which is being hand delivered from the Congressional Progressive Caucus to every House Republican this afternoon:

Dear Howard:

This letter is to ask for your help and support, and that of your colleagues, in the passage of an increase in the limit on the public debt.

As Secretary Regan has told you, the Treasury’s cash balances have reached a dangerously low point. Henceforth, the Treasury Department cannot guarantee that the Federal Government will have sufficient cash on any one day to meet all of its mandated expenses, and thus the United States could be forced to default on its obligations for the first time in its history.

This country now possesses the strongest credit in the world. The full consequences of a default or even the serious prospect of default by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and on the value of the dollar in exchange markets. The Nation can ill afford to allow such a result. The risks, the cost, the disruptions, and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns.

I want to thank you for your immediate attention to this urgent problem and for your assistance in passing an extension of the debt ceiling.

Sincerely,

Ronald Reagan

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The GOP Plan

President Obama emphasizes the importance of compromise and shared sacrifice so that we can overcome our fiscal challenges

Debt Default Could Mean "Tax Increase On Everybody"

WASHINGTON -- President Barack Obama may have just put the consequences of debt default in terms most Americans can understand.

During a Friday press briefing, the president warned that failure to raise the debt ceiling in time could mean an increase in interest rates, which "is effectively a tax increase on everybody."

"Suddenly, whether you’re using your credit or you’re trying to get a loan for a car or a student loan, businesses that are trying to make payroll, all of them could end up being impacted as a consequence of a default," Obama said.

The president's warning taps directly into the GOP argument for not accepting a deal to date: Republicans have refused to sign onto any final package that includes tax increases. Now Obama is making the case that widespread tax increases could occur if they don't make a deal.

A senior Senate GOP aide scoffed at the president's latest message since, according to Republicans, Obama's push for closing tax loopholes in a final deal is akin to tax hikes.

"So, tax increases are bad now?" asked the aide.

Negotiators still don't have a deal and are inching closer to the August 2 deadline, the day the government is expected to officially run out of money to pay its bills. Obama said he is still pushing for a "big deal" -- or a roughly $4 trillion debt reduction plan -- but that it comes down to Republicans being willing to give ground on allowing for new revenue.

"We have a chance to stabilize America’s finances for a decade, for 15 years, or 20 years," Obama said. "If we’re wiling to seize the moment."

Congressman fights to level playing field for U.S. Manufacturers

Washington, Jul 12 - Congressman Bill Owens has joined an effort to force a vote on bipartisan job creation legislation that would push China to play by the rules of fair trade. In signing a discharge petition to force a vote on The Currency Reform for Fair Trade Act (H.R. 639), Owens has continued his fight to provide the nation with the tools necessary to address unfair currency manipulation by the Chinese and bolster the American manufacturing industry.



“In order to create quality jobs here at home, we have to fight for a level playing field so that American businesses can create new jobs,” said Owens. “This legislation creates a level playing field after decades of manipulation by the Chinese government, which does not allow their currency to respond to the capitalist global market. This manipulation has unfairly contributed to the current state of our economy by creating a substantial imbalance of trade in favor of the Chinese, and it is well past time to put a stop to these tactics.”



Owens joined the launch of the discharge petition -- which can force action on legislation with signatures from 218 Members of the House of Representatives -- because the U.S. House Leadership continues to block its consideration. The legislation overwhelmingly passed the House of Representatives last year by a vote of 348-79 but was not considered by the Senate.

The Chinese government continues to intervene in the markets to suppress the value of its currency by as much as 25 to 40 percent. This unfair trade practice translates into a significant subsidy, artificially making Chinese imports into the United States cheaper and American imports to China more expensive. The resulting imbalance jeopardizes efforts to create and preserve manufacturing jobs in America.

The Currency Reform for Fair Trade Act (H.R. 639) will help American businesses by treating fundamentally undervalued currencies as a prohibited subsidy, allowing the U.S. to take action to counter this unfair trade practice.

“Fair trade is critical to economic growth in Upstate New York, and when one country artificially deflates its currency to gain leverage on a capitalist world market, there is nothing fair about it,” Owens continued. “When America’s trade partners play by the rules, we will see a recovery in American exports and American jobs.”

A new report confirms that up to 2 million American jobs could be created if China and other Asian countries stopped manipulating their currency to gain an unfair advantage over American businesses and workers.

Last year, the Currency Reform for Fair Trade Act was supported by the Fair Currency Coalition (a coalition of industry, agriculture, and labor), Coalition of Agricultural Producers, U.S. Business and Industry Council, American Iron & Steel Institute, American Manufacturing Trade Action Coalition, Alliance for American Manufacturing, and National Council of Textile Organizations, AFL-CIO, United Steel Workers, and United Auto Workers.

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Owens to hold telephone town hall meeting Tuesday

Rep. William Owens, D- Plattsburgh, will hold a telephone town hall meeting at 6:45 p.m. Tuesday.

Owens will update callers about his work to create jobs in Upstate New York, and then take questions from constituents during the hour-long call.A random sample of 40,000 residents in New York’s 23rd Congressional District — which includes Oswego and Madison counties — will be chosen to participate in the conference call Tuesday evening morning.

To request a phone call invitation, constituents from NY-23 can e-mail their name and phone number to this address or call the congressman’s Watertown office at 782-3150.

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