Two Debt Deals Brewing in Congress
As the August 2nd deadline for when the US will reach its legal $14.29 trillion debt limit, Republicans and Democrats are throwing together short-term plans designed to see the US through the crisis, but not much further.
Band-Aids, Not Cures
Not much more than what analysts consider back-up plans until more long-term solutions to the debt crisis can be found, the plans both include raising the debt limit along with cuts in spending to match, with an eye to forging ahead with a more permanent plan at some date in the future.
Boehner Suggests Baby Steps
Ohio Republican John A. Boehner, House Speaker, had drawn up a plan which he will need to soft-peddle to his Republican colleagues. Boehner envisions raising the limit on borrowing by about $1 trillion, while concomitantly applying a similar amount in spending cuts to a budget which will only last until the end of the year. A long-term, more constructive plan will have to wait until later.
Reid Wants Plan to Last Until Elections
On the other side of the aisle the Senate Majority Leader Harry Reid, Democrat from Nevada is proposing a similar plan with different numbers. Reid is suggesting the debt be raised by $2.7 trillion in partnership with the same amount in projected spending in the future. In a gesture to satisfy the Republicans Reid’s plan does not require tax hikes, but will benefit Democratic interests by lasting at least until the 2012 elections.
Obama Threatens Veto
November 2012, the date of the upcoming presidential elections, has become for Obama and his fellow Democrats something of a holy grail. Advisors to Obama have said that the date is so crucial that the president will veto any plan which does not last at least until then.Justifying this demand White House Chief of Staff Bill Daley stated on last Sunday’s “Meet the Press” television program that any plan agreed upon, “… must be extended in a way that gives certainty to the economy through ‘13 and not some short-term gimmick, where we’re right back in this fix in six or eight months.”Not all agree with this assessment, however. Oklahoma Republican Senator Tom Coburn labeled Obama’s threatened veto “a ridiculous position.”
“I understand why they’re saying they won’t sign a short-term. But I think they won’t have any choice, and I think that’s the only answer right now,” he explained.