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January 29, 2015

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Obama, Senate reach deal on debt ceiling; Congress to vote today


Associated Press

President Barack Obama speaks from the White House briefing room Sunday, July 31, 2011, in Washington, D.C., about a deal being reached to raise the debt limit.

Senate leaders and President Barack Obama announced Sunday night that they have reached a deal to avoid default, just about two days before the deadline.

Now they just have to sell it to Congress.

“Sometimes it seems our two sides disagree on almost everything, but in the end, reasonable people were able to agree on this,” said Senate Majority Leader Harry Reid, the first to officially announce there was a deal. "My message to the world tonight is that this nation and this Congress are moving forward and we’re moving forward together.”

"At this point, I think I can say with a high degree of confidence that there is now a framework to review that will ensure significant cuts in Washington spending," said Republican Leader Mitch McConnell. "The United States of America will not, for the first time in our history, default on its national obligations."

The Senators left it to the president to outline the terms of the deal, which appear to be right in line with what has been reported throughout the weekend: the first $900 billion in increased borrowing authority will be balanced out by a $917 billion cut to discretionary spending, to be spread out over ten years. A bipartisan committee of congressional lawmakers would be set up and tasked with coming up with deeper deficit reductions by November of this year. The plan also contains a harsh incentive to compel Congress to take the committee’s proposal: if lawmakers can’t come up with a deficit-cutting plan, it sets off “tough cuts that both parties would find objectionable” across the board.

Under the plan, Congress will also take a vote on a constitutional amendment to balanced budget, and the president’s borrowing authority will be extended through the first months of 2013.

“Is this the deal I would have preferred? No,” Obama said, complaining of a process that was “messy” and took “far too long.”

But Obama threw the full weight of his office behind the plan.

“I want to urge members of both parties to do the right thing and support this deal with your votes,” he said. “It will allow us to avoid default, it will allow us to pay our bills, it will allow us to start reducing our deficit in a responsible way.”

It’s going to take the president, and many other lawmakers of similar mind, to pull enough lawmakers along to get this deal through the Congress in the next 48 hours.

While Senate leaders endorsed the plan in front of a national television audience, House leaders noticeably shied away from the public eye Sunday night — it’s in the House that this bill is going to be the toughest sell.

Both House Speaker John Boehner and Democratic Leader Nancy Pelosi scheduled meetings with their party conferences: the Republicans’ took place first, on Sunday night, while the Senate leaders made their announcement on the floor.

“There is nothing in this framework that violates our principles,” Boehner told his House Republicans, in a presentation that framed the whole deal under familiar framework of “cuts,” “caps” and “balances.”

“It’s all spending cuts. The White House bid to raise taxes has been shut down,” Boehner told Republicans. “And as I vowed back in May — when everyone thought I was crazy for saying it — every dollar of debt limit increase will be matched by more than a dollar of spending cuts. And in doing this, we’ve stopping a job-killing national default that none of us wanted.”

Not all House Republicans are expected to swallow Boehner’s argument whole, though.

For starters, the “balance” portion of the plan is not absolute: all that is required is a vote on a constitutional balanced budget amendment; while the Republican caucus’ preferred plan made passage a precondition for raising the debt ceiling.

Republicans were also upset that the make-up of the disciplinary trigger mechanism: about half of the automatic cuts in it would be to defense spending.

Utah Rep. Jason Chaffetz told reporters earlier Sunday evening that it the deal would be a “tough sell” for Boehner.

But it’s going to be a tough sell to House Democrats, too.

Democrats wanted to see some of the burden of deficit reduction borne by the wealthy, by ending tax breaks for corporations, luxury items, and top wage earners. There’s none of that in this bill (though those items could come up for review under the committee).

Democrats also object to the disciplinary trigger, though their objection is based on the fact that payments to Medicare providers will also be on the block if Congress can’t come up with a deal.

“Nada from million/billionaires; corp tax loopholes aplenty; only sacrifice from the poor/middle class?” tweeted Rep. Donna Edwards, a Democrat from Maryland who’s also in charge of recruiting 2012 candidates for the House Democrats’ campaign wing. “Shared sacrifice, balance? Really?”

"We're trading working Americans' livelihoods for #GOP radical votes," tweeted Rep. Raul Grijalva of Arizona, chairman of the House Progressive Caucus. “I’m a no.”

House Democrats' Leader Nancy Pelosi wouldn't commit to any assessment of her caucus Sunday night. "We all may not support it, or none of us may be able to support it," she told reporters outside her office. Pelosi is not grouping up House Democrats until Monday to hash out their position on the compromise plan.

Senate Democrats and Senate Republicans each scheduled meetings to discuss the particulars of the plan for Monday morning as well.

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  1. Lots of whining on both sides--a sure indication that this is a pretty good deal.

  2. Total Democrats Capitulation with a capital "C". Spending cuts with no revenues. GOP dancing all the way to the bank!

    Ali Velshi (CNN) is right. Spending cuts creates more unemployment, while tax cuts to the rich creates more corporate jets.

  3. The proposed spending cuts over the next 10 years will not even pay for the interest on the current debt. As this posting shows, the interest owing on the federal debt will exceed $450 billion this year, setting a new record:

    If interest rates increase to historically normal levels as seen in the early 2000s, interest owed on the debt could well rise to $960 billion annually, more than what is spent on Social Security and Medicaid in a year.

    This is, to put it mildly, a rather pitiful deal.

  4. This accomplishes nothing except letting the BUFFOON spend more money.

  5. America is full of wealthy freeloaders.

  6. It was all about dising Obama, and getting the uber rich their tax breaks, and keeping hands off the defense budget.

    Pat yourself on the back TeaHeads, me and my veterans group saw what your 'politicans' feel about us via their call to cut our health care and benefits so the uber rich can have more cash, we will vote against you in the next elections, you betcha..

  7. What we have is a failure to lead. The Dems could have enacted anything they wanted for one year (senate 60-40), yet they did not. They could have enacted almost anything they wanted the following year, but toned down a little to make it past 59-41 senate. But they did not.

    So now it is the Repubs fault? The ones who now control a little more than one half of one third of the govt? Why did the Dems not deal with these issues when they had major majorities? Answer that question and you will understand the results of the 2010 election.

    You want to blame someone, blame the ones that that have failed in leadership.

  8. Actually, if you look at this whole fiasco realistically, there is absolutely no indication the deal is agreed upon. There is no indication this is over.

    I predict Rep. Boehner, who I think is inept at his new job as Speaker of the House, not to mention that I shudder at the thought that he is third in line in succession to lead this country, will be unable corral the votes to approve this thing. He will fail abysmally.

    I mean, c'mon. He spent all of three days last week trying to get the votes together for a plan. An inferior plan that was destined to fail in the Senate. But still he couldn't get the votes together til the last minute. It was like he was herding cats around.

    I predict the same happens today. Even with Democratic Party votes to help put him over the top.

    President Obama needs to invoke the 14th Amendment and get this done.

    The sad thing is that the damage to the American economy has already started. Even if there is an agreement. Which, this agreement, if approved, would provide even more damage to an already fragile and crumbling American economy, starving the beast more and the eventual loss of even more American jobs. And no attention is being paid to the root causes of the problem that caused the financial meltdown in 2008. There are still nothing put in place to prevent it happening again.

    This hasn't been said out loud, but Wall Street investors are losing faith in the American economy. Because they feel they have sucked it dry as much as they can. Much like a termite, leaving the outside of the wood intact but just a hollow shell inside. They will end up focusing their financial deals to make money elsewhere and cutting America out of future deals. Maybe even putting their money down on America failing. On Wall Street, they simply aren't patriotic. That don't make them money. The color of the flag they owe allegiance to is green...the color of money.

    The really sad thing about this is that the politicians don't suffer from any of this.

    The filthy rich don't neither.

    Only you and I. The middle class and below.

    We're all at their mercy.

    Hate to sound all gloom and doom stuff, but the Republican Party seems to love to have all of us wallow in mud nowadays. To fix things, they just spray more water in the pit. All purely for party politics. They only want power and money. Nothing else.

  9. Sun Healthcare Group Inc, (Public, NASDAQ:SUNH
    Down 53%

    Skilled Healthcare Group,Inc. (Public, NYSE:SKH)
    Down 43%

    National HealthCare Corporation (Public, AMEX:NHC)
    Down 12%

    And the list goes on. Looks like the deal might have found a good target but it's got a long way to go.

  10. What a joke. The Republicans once again sold their souls to the devil. Kicking the can down the road is not the responsible or prudent thing to do. So when the bill comes due again, it will be 100X worse than it would be now. Default and get it over with.

  11. All that has happened is a delay of the inevitible default. Every time the credit limit is raised, it simply is maxed out again, adding a couple trillion more to pay interest on. As Steve Thompson pointed out in a post above, when interest rates rise to "normal" this much higher debt will cost a fortune in interest.
    Unless spending and debt is reduced, the house of cards that is the national debt will eventually collapse.
    I took my personal spending habits under control after a layoff and lower salary that followed, sacraficing much to keep my bills paid and not taking the easy way out like so many have. It's time the government does the same.
    As it stands, drug addicts will still get social security "disability", prisoners will get better dental care than most of us, people on welfare will still have their HBO and I-phones (paid for by us), millionaires will still get to write off their vacation homes...nothing has changed. Those of us who had to dip into the 401k to keep the house got the priveledge of paying a 10% penalty to the government. The working class gets to dig deeper...We'll be back in 2 years to do this all over again, by then it may be too late.