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Obama, top foe clash as US debt talks flare up
President Barack Obama clashed sharply with a top Republican foe as tense talks to avert a ruinous early August US debt default flared up amid grim warnings about the global consequences.
http://news.yahoo.com/obama-top-foe-clash-us-debt-talks-flare-020229831.html
US central bank chief Ben Bernanke said a default would plunge the economy into "major crisis," while ratings agency Moody's warned the United States may lose its sterling triple-A debt rating on rising risks of a short-term default.
Default would "throw shockwaves through the entire global financial system," and risk sending the fragile US economy into a new recession, the US Federal Reserve chairman told a key congressional committee.
Obama, who was to hold a fifth straight day of negotiations with Republicans and fellow Democrats at 4:15 pm (2015 GMT) Thursday, planned to take stock of the seemingly stalemated process on Friday, a Democratic aide said.
"Friday is not a hard deadline," the aide told reporters after the contentious discussions wrapped up their fourth day, but "the clock is ticking, they have to get this done."
Obama needs the Republican-led House of Representatives and Democratic-held Senate to sign off on a deal to close the yawning US deficit while allowing cash-strapped Washington to borrow past an August 2 deadline.
The president, who has pressed for a comprehensive deal to last through his 2012 reelection campaign, was sending Treasury Secretary Tim Geithner to brief Senate Democrats Thursday on the state of the negotiations.
Obama has called for cuts to social safety net programs dear to Democrats while pushing for tax hikes on the rich, a step rejected by Republicans who charge doing so will smother investment and crush already weak job growth.
Tensions boiled over Wednesday, with Obama heatedly rejected Republican House Majority Leader Eric Cantor's push for a short-term deal anchored on spending cuts, according to key Republican and Democratic aides.
Obama said he would veto such a stopgap measure, warned Cantor "don't call my bluff," and declared himself ready to take his case to US voters, agreed aides on both sides, who described the events on condition of anonymity.
Republican aides described Obama as storming out of the meeting in a huff, while their Democratic counterparts said that the presidential rebuke left Cantor chastised and speechless.
"I've reached my limit. This may bring my presidency down, but I will not yield on this," according to a Republican aide.
The president's message was "enough posturing, he said 'enough is enough.' He did not abruptly walk out. He was done with the meeting, everyone was done with the meeting, and he left," said a Democratic aide.
An aide to Republican House Speaker John Boehner later signalled that the lawmaker was prepared to accept a short-term deal in which spending cuts outweigh the debt limit increase and tax hikes are off the table.
The shift to a stopgap could clear the way for a plan crafted by Republican Senate Minority Mitch McConnell, whose proposal would effectively see the debt limit rise only with Democratic votes and without guaranteeing spending cuts.
Leading Democrats and the White House greeted McConnell's proposal carefully, but it was unclear whether the plan would rally enough Republican support to pass the divided US Congress.
Republicans have embraced fiscal discipline since Obama took office, after years in which they backed massive tax cuts and rejected paying for wars in Afghanistan and Iraq or a costly increase in a popular health care program.
Obama has called for daily talks to reach a deal to lift the US debt ceiling, now at $14.29 trillion, in the face of a budget deficit expected to hit $1.6 trillion this year.
The US hit the ceiling on May 16 and has used spending and accounting adjustments, as well as higher-than-expected tax receipts, to continue operating without impact on government obligations.
But by August 2, the government will have to begin withholding payments to bond holders, civil servants, retirees or government contractors.
The prospect of a default led Moody's to place US debt on a downgrade watch, citing prospects that talks may not reach a deal in time to "prevent a missed payment of interest or principal on outstanding bonds and notes."
"Moody's considers the probability of a default on interest payments to be low but no longer to be de minimis," the agency said.
http://news.yahoo.com/obama-top-foe-clash-us-debt-talks-flare-020229831.html
US central bank chief Ben Bernanke said a default would plunge the economy into "major crisis," while ratings agency Moody's warned the United States may lose its sterling triple-A debt rating on rising risks of a short-term default.
Default would "throw shockwaves through the entire global financial system," and risk sending the fragile US economy into a new recession, the US Federal Reserve chairman told a key congressional committee.
Obama, who was to hold a fifth straight day of negotiations with Republicans and fellow Democrats at 4:15 pm (2015 GMT) Thursday, planned to take stock of the seemingly stalemated process on Friday, a Democratic aide said.
"Friday is not a hard deadline," the aide told reporters after the contentious discussions wrapped up their fourth day, but "the clock is ticking, they have to get this done."
Obama needs the Republican-led House of Representatives and Democratic-held Senate to sign off on a deal to close the yawning US deficit while allowing cash-strapped Washington to borrow past an August 2 deadline.
The president, who has pressed for a comprehensive deal to last through his 2012 reelection campaign, was sending Treasury Secretary Tim Geithner to brief Senate Democrats Thursday on the state of the negotiations.
Obama has called for cuts to social safety net programs dear to Democrats while pushing for tax hikes on the rich, a step rejected by Republicans who charge doing so will smother investment and crush already weak job growth.
Tensions boiled over Wednesday, with Obama heatedly rejected Republican House Majority Leader Eric Cantor's push for a short-term deal anchored on spending cuts, according to key Republican and Democratic aides.
Obama said he would veto such a stopgap measure, warned Cantor "don't call my bluff," and declared himself ready to take his case to US voters, agreed aides on both sides, who described the events on condition of anonymity.
Republican aides described Obama as storming out of the meeting in a huff, while their Democratic counterparts said that the presidential rebuke left Cantor chastised and speechless.
"I've reached my limit. This may bring my presidency down, but I will not yield on this," according to a Republican aide.
The president's message was "enough posturing, he said 'enough is enough.' He did not abruptly walk out. He was done with the meeting, everyone was done with the meeting, and he left," said a Democratic aide.
An aide to Republican House Speaker John Boehner later signalled that the lawmaker was prepared to accept a short-term deal in which spending cuts outweigh the debt limit increase and tax hikes are off the table.
The shift to a stopgap could clear the way for a plan crafted by Republican Senate Minority Mitch McConnell, whose proposal would effectively see the debt limit rise only with Democratic votes and without guaranteeing spending cuts.
Leading Democrats and the White House greeted McConnell's proposal carefully, but it was unclear whether the plan would rally enough Republican support to pass the divided US Congress.
Republicans have embraced fiscal discipline since Obama took office, after years in which they backed massive tax cuts and rejected paying for wars in Afghanistan and Iraq or a costly increase in a popular health care program.
Obama has called for daily talks to reach a deal to lift the US debt ceiling, now at $14.29 trillion, in the face of a budget deficit expected to hit $1.6 trillion this year.
The US hit the ceiling on May 16 and has used spending and accounting adjustments, as well as higher-than-expected tax receipts, to continue operating without impact on government obligations.
But by August 2, the government will have to begin withholding payments to bond holders, civil servants, retirees or government contractors.
The prospect of a default led Moody's to place US debt on a downgrade watch, citing prospects that talks may not reach a deal in time to "prevent a missed payment of interest or principal on outstanding bonds and notes."
"Moody's considers the probability of a default on interest payments to be low but no longer to be de minimis," the agency said.
Actually, I found something that explains all this in detail and will post it separately for discussion. Interesting topic.
"....Clause four of the amendment, which was passed after the end of the Civil War, reads: "The validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."
CRS's experts said that language doesn't convey any new powers on the president to circumvent Congress when it comes to borrowing or spending.
"There appears to be no basis in the legislative history, or arguably in the structure of the Constitution itself, that can support an executive power to borrow funds," the research service said in the report, which was released to several congressional offices this week and was reviewed by The Washington Times.
Though some Democratic lawmakers have raised it as a possibility, the White House has been dismissive of using the 14th amendment as a work-around..."
http://www.washingtontimes.com/blog/inside-politics/2011/jul/13/crs-obama-14th-amendment-circumvent-debt-limit/
CRS's experts said that language doesn't convey any new powers on the president to circumvent Congress when it comes to borrowing or spending.
"There appears to be no basis in the legislative history, or arguably in the structure of the Constitution itself, that can support an executive power to borrow funds," the research service said in the report, which was released to several congressional offices this week and was reviewed by The Washington Times.
Though some Democratic lawmakers have raised it as a possibility, the White House has been dismissive of using the 14th amendment as a work-around..."
http://www.washingtontimes.com/blog/inside-politics/2011/jul/13/crs-obama-14th-amendment-circumvent-debt-limit/
I have not researched it but have heard them talk about it on television. How the president can use the 14 ammendment section for to raise the debt ceiling if necessary and if he can prove just cause as the Constitution demands our debts be paid. So in that respect I have heard reporters question as to his intent to use it. No I do not remember Obama ever suggesting that he would, instead preferring to work a deal thru negotiation. So until I research it further, that is my knowledge of same.
I'm not sure what all this 14th Amendment talk is about.
Can someone enlighten me? Threatening to invoke the 14th Amendment how...?
I just read a summary of the 14th, and I can't see how it's applicable to this particular situation.
Can someone enlighten me? Threatening to invoke the 14th Amendment how...?
I just read a summary of the 14th, and I can't see how it's applicable to this particular situation.
He can’t invoke the 14th Amendment it is referring to the Civil War and they are taking one sentence out of context. Actually, I haven’t found anywhere that Obama himself has threatened to use it.
U.S. Constitution - Article 1 Section 8
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties,Imposts and Excises shall be uniform throughout the United States;To borrow money on the credit of the United States;……….
U.S. Constitution - Article 1 Section 8
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties,Imposts and Excises shall be uniform throughout the United States;To borrow money on the credit of the United States;……….
I am not at all sure he will invoke the 14th. Even if he does they will try to impeach him for it imo. I say, if they cannot agree than the presidents hands are tied. Dont raise it and let the chips fall where they may. This process is not working and I think its obvious to all. I also think if he does not raise it, the mjorityof people will blame republicans so Im not at all convinced they want it to go that far. Who knows, truth is stranger than fiction.
Could you please post the part of the 14th Amendment that would make an impact? I may be over looking something but I can’t find anything that would really be relevant to our situation.
"Don't call my bluff". oooohhhh he's MAD!....Time to stop playing around Mr. President. Congress doesn't want to cooperate, invoke the 14th amendment and be done!
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