President Obama Calls on the American People to Make their Voices Heard 29JUL11

LEADERSHIP from Pres Obama. Though I don't always agree with him I do appreciate his leadership on this issue. john boehner ad eric cantor, pay attention....
This morning, President Obama spoke on the status of the debt ceiling negotiations from the Diplomatic Reception Room at the White House. The President urged Republicans and Democrats in Congress to find a bipartisan solution to avoid default that he can sign by Tuesday. Though we are almost out of time, the President made it clear that there are multiple ways to resolve this problem:

Now, keep in mind, this is not a situation where the two parties are miles apart.  We’re in rough agreement about how much spending can be cut responsibly as a first step toward reducing our deficit.  We agree on a process where the next step is a debate in the coming months on tax reform and entitlement reform –- and I’m ready and willing to have that debate.  And if we need to put in place some kind of enforcement mechanism to hold us all accountable for making these reforms, I’ll support that too if it’s done in a smart and balanced way.
So there are plenty of ways out of this mess.  But we are almost out of time.  We need to reach a compromise by Tuesday so that our country will have the ability to pay its bills on time, as we always have -- bills that include monthly Social Security checks, veterans’ benefits and the government contracts we’ve signed with thousands of businesses.  Keep in mind, if we don’t do that, if we don’t come to an agreement, we could lose our country’s AAA credit rating, not because we didn’t have the capacity to pay our bills -- we do -- but because we didn’t have a AAA political system to match our AAA credit rating.

And make no mistake -– for those who say they oppose tax increases on anyone, a lower credit rating would result potentially in a tax increase on everyone in the form of higher interest rates on their mortgages, their car loans, their credit cards.  And that’s inexcusable.

President Obama reiterated that the power to reach a balanced solution is in our hands:

There are a lot of crises in the world that we can’t always predict or avoid -– hurricanes, earthquakes, tornadoes, terrorist attacks.  This isn’t one of those crises.  The power to solve this is in our hands.  And on a day when we’ve been reminded how fragile the economy already is, this is one burden we can lift ourselves.   We can end it with a simple vote –- a vote that Democrats and Republicans have been taking for decades, a vote that the leaders in Congress have taken for decades.
It’s not a vote that allows Congress to spend more money.  Raising the debt ceiling simply gives our country the ability to pay the bills that Congress has already racked up.  I want to emphasize that.  The debt ceiling does not determine how much more money we can spend, it simply authorizes us to pay the bills we already have racked up.  It gives the United States of America the ability to keep its word.

Finally, the President called on the American people to continue to make their voices heard in this debate:

Now, on Monday night, I asked the American people to make their voice heard in this debate, and the response was overwhelming.  So please, to all the American people, keep it up.  If you want to see a bipartisan compromise -– a bill that can pass both houses of Congress and that I can sign -- let your members of Congress know.  Make a phone call.  Send an email.  Tweet.  Keep the pressure on Washington, and we can get past this.
And for my part, our administration will be continuing to work with Democrats and Republicans all weekend long until we find a solution.  The time for putting party first is over.  The time for compromise on behalf of the American people is now.  And I am confident that we can solve this problem.  I’m confident that we will solve this problem.  For all the intrigue and all the drama that’s taking place on Capitol Hill right now, I’m confident that common sense and cooler heads will prevail.

But as I said earlier, we are now running out of time.  It’s important for everybody to step up and show the leadership that the American people expect.

President Barack Obama delivers a statement to the press regarding the ongoing budget negotiations in the Diplomatic Reception Room of the White House, July 29, 2011. (Official White House Photo by Samantha Appleton)

Pawlenty Draws Attention With Debt Ceiling Rhetoric, But Sends Mixed Signals On Action [UPDATED] 15JUL11

tim pawlenty believes the prc should be paid before members of the US Military and Social Security recipients if an agreement isn't reached on raising the federal budget cap. Since pawlenty is so concerned about the financial interest of the prc, who holds approximately 9% of our national debt, maybe he should run for office there. From HuffPost.....
WASHINGTON -- Tim Pawlenty on Friday joined the Jim DeMint wing of the Republican Party in the debt ceiling debate. Sort of.
Pawlenty argued in multiple TV interviews against Senate Minority Leader Mitch McConnell's plan to hand over primary responsibility of raising the debt ceiling to the president in exchange for no tax increases, saying there has to be structural change to change the federal government's spending patterns.
"It's a Band-Aid on a broken bone," Pawlenty said of McConnell's plan in an interview with Bloomberg TV. "It doesn't solve the problem ... I don't like it."
The former Minnesota governor's charged rhetoric appeared at first blush to align him with Sen. DeMint (R-S.C.) and other Tea Party lawmakers in the Senate and House, who have staunchly refused to consider voting for a debt ceiling increase unless there is a balanced budget amendment to the Constitution, among other things.
“It’s balance or bust,” DeMint wrote in an April fundraising email. “Agreeing on the right policy is not enough to save our country. Republicans also have to be willing to fight to enact that policy, even if it means sacrificing their political careers."
Pawlenty mentioned the balanced budget amendment as a "long term" goal that should be sought, but did not mention what kind of reforms should be sought in the short term. Many Republicans are still pushing for a cut, cap and balance plan that includes immediate spending cuts, spending caps for the future and the balanced budget amendment in the long term.
"This is uncomfortable. It's awkward. I know it's concerning to the markets for understandable reasons," Pawlenty said on CNBC Friday morning. "But if we don't get people in Washington D.C. to take this seriously and actually make the tough decisions -- they always say 'Oh, we're going to make the tough decisions. We'll do it. We'll do it,' and then they never do ... Now is the time. The hour is late, and these problems are big, and the only way you're going to get people to do something tough is to put their backs up against the wall."
Pawlenty aides highlighted that portion of the interview on Twitter. It came amid rising tensions about the consequences of a potential default by the U.S. government on its debts. It appears as though a substantial portion of the Republican base and some of the party's most vocal leaders in Washington are prepared to accept a default if they cannot convince President Obama and congressional Democrats to accept deep cuts to spending levels and sweeping changes to future commitments.
But in a portion of the same CNBC interview that was not promoted by the Pawlenty campaign, the candidate admitted that the debt ceiling will be raised.
"They're going to have to raise the debt ceiling," he said. "But they should get some structural reform."
In the Bloomberg TV interview released later in the day, Pawlenty said, "I don't think there should be a default. We shouldn't default. No, I don't think there will be."
That didn't stop the Democratic National Committee from sending out a press release with the subject header: "Pawlenty Calls For Default."
“Governor Pawlenty is hardly the only Republican who would prefer that the United States default on its debt, but as a presidential candidate, his words cannot be dismissed lightly," said DNC Chairman Debbie Wasserman Schultz.
The two sides define default differently. Republicans generally use it in a narrow sense, meaning a failure to pay creditors and bondholders, and believe this is the key issue to maintaining current interest rates and a stable stock market. Democrats often use it more broadly as referring to failure to pay any obligations, such as federal compensation, payments to vendors doing business with the government, or payments to those receiving government assistance, such as Social Security beneficiaries.
The DNC and others attacked Pawlenty for saying that creditors such as the Chinese should be paid before those in the military or Social Security recipients.
"Pawlenty has shown himself to have a truly sick and twisted set of values by advocating that it’s ok to keep paying foreign countries while cutting off senior citizens from their Social Security and Medicare that literally could make the difference between their life and death," said Eddie Vale, spokesman for Protect Your Care, a liberal organization founded to defend Obama's health care overhaul.
Republicans argue that prioritizing payments would maintain the AAA bond rating that keeps borrowing costs low, but financial analysts have said that there would be substantial negative financial consequences for such an action. Defaulting on Social Security obligations could also conceivably trigger a downgrade.
"Even in a scenario in which Treasury interest payments are 'prioritized,' halving other payments like Social Security or military salaries would drop the U.S. income level by 8-9 percent of GDP in a short period," wrote Steven Wieting, Managing Director in the Economic and Market Analysis team of Citigroup, in a July 11, 2011 report.
Wieting also wrote in his analysis: "The financial implications of an actual Treasury default, even briefly, could represent the largest financial shock in history, potentially creating a domino of defaults."
[UPDATE: 5:31 p.m.] - In another interview Friday afternoon on CNBC's "Kudlow Report," Pawlenty said that Republicans should pass the "Cut, Cap and Balance" plan through the House and Senate so that Obama has to veto it.
"If he vetoes it, then send him the installment plan, you know meter it out to him every couple of months so he has to come back and walk the plank every few months," Pawlenty said.
It appeared to be an admission by Pawlenty that the McConnell plan that he rejected earlier in the day would be the best option at the end of the day. Pawlenty's scenario was overly optimistic as well in projecting the passage of the "Cut, Cap and Balance" plan through the Senate, where Democrats hold a 51-to-47 advantage, with two Independents who caucus with the Democrats.
Kudlow pointed out that the Senate will not pass such a plan, but Pawlenty essentially ignored him, continuing to insist that Republicans force Obama to veto the idea.
"They should send him a bill and challenge him to veto it or sign it," Pawlenty said. "I'd send it to him relatively soon."
Pawlenty did have one suggestion to alter McConnell's plan, which would force Obama to request a debt ceiling increase three times between now and the 2012 election.
"I would make him come back every month, not just give him some six month window," he said.

Harry Reid And Mitch McConnell: 'Hybrid' Solution To Debt Standoff 14JUL11

AGAIN, a deal where the rich get off paying for nothing and the poor, the working and middle classes bearing the burden of a financial disaster created by the wealthy and the corporate welfare system. Where is the justice in this proposal? What is the moral foundation for giving into the greed and lust for more power, more economic control the rich and corporate America are demanding? Where is the leadership that is supposed to represent the 98% of us who actually have to work for a living and who have paid for the life styles of the rich, the corporate executives and the financial industry CEOs through their tax cuts and tax loopholes and tax subsidies? Everything has to be on the table, revenue increases through closing tax loopholes and ending tax cuts for the rich and corporations and cuts in the Pentagon's budget must be part of any agreement. 

WASHINGTON -- The Senate's top two officials are working on what one aide called a "hybrid," fail-safe solution to the debt ceiling debate that could garner enough political support to pass Congress.
The plan, which is being hatched by Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.), would ensure that over $1.5 trillion in cuts over ten years be passed into law. It would also grant President Obama the authority to extend the debt ceiling through the 2012 election season while requiring him to propose -- but allowing him to ultimately veto -- cuts beyond those initial $1.5 trillion.
Additionally, the deal would create a new "deficit commission" compromised solely of lawmakers who would be tasked with finding additional savings in the budget. The commission's recommendations would be given automatic, amendment-free votes in both chambers of Congress.
First reported by The Washington Post, the plan is far from complete. A Republican source on the Hill cautioned not to treat it as an official option, let alone a top one. "There are a lot of people with a lot of ideas," the source said. A Democratic source said that the language -- let alone composition -- of each part of the deal remains un-finalized.
But the contours do, on the surface, seem promising. The basic premise is to blend the debt ceiling deal crafted in talks led by Vice President Joe Biden with the plan that McConnell proposed this week, which would give the president authority to raise the debt ceiling while vetoing corresponding cuts.
As the dual plan is envisioned, House Republicans would be able to claim that they passed a deal without including revenue raisers or tax hikes. The president, meanwhile, will be able to move the debt ceiling debate into 2013, albeit while having to hold a largely pre-determined vote for a second extension (once the $1.5 trillion in cuts run out) before the election. Democrats would have to swallow a deal that didn't include revenues, but they will have protected entitlement programs like Social Security and Medicare from cuts.
"It is a hybrid approach," said the Democratic official familiar with the proposal. "It is a way to get us some cuts now while making sure we have an option that we do not default on our debt."
While the concept may seem politically palatable, it could easily fall apart over the specific details. For starters, negotiators are not yet locked in to the actual cuts that have been suggested during the Biden talks. The president, meanwhile, continues to push for a larger package of cuts and reforms. The failure to include revenue increases in the hybrid plan could pose serious problems for Democratic lawmakers. Further, the composition of the deficit commission -- let alone the number of members -- is subject to haggling.
"There is a lot of detail on the commission part not locked," acknowledged one source familiar with the McConnell-Reid talks.
UPDATE: Speaking to reporters on Thursday, Sen. Chuck Schumer (D-N.Y.) seemed to embrace the idea of combining the McConnell approach with the Biden talks.
"We would like to see, even if we can't get a grand deal, that some real cuts be added to Senator McConnell's proposal and perhaps Senator McConnell's proposal be modified," Schumer said. "That is another possibility, not as good as a larger deal, but certainly better than just avoiding default."