“I am pleased that Speaker Boehner and his House colleagues have decided to change course, and pass a bill that defuses yet another fight over the debt ceiling.

“This bill surrenders the hostage Republicans have taken in the past by decoupling the full faith and credit of the United States from cuts to Social Security and Medicare, or anything else.  In substance, this is a clean debt limit increase that will set the precedent for future debt ceiling extensions.  By passing this bill, Republicans are joining Democrats to say we will not hold the full faith and credit of the United States hostage, and we will pay our bills.

“Over the last two years, the bipartisan Budget Control Act set spending levels in place of a Congressional Budget.  As Senator Murray announced today, this year the Senate will return to regular order, and move a budget resolution through the Budget Committee and to the Senate floor. House Republicans had to add a gimmick or two to get their bill past the Tea Party. But to spare the middle class another knock-down, drag-out fight, the Senate will proceed to and seek to pass the House bill. We will seek an agreement with Republicans to bring the bill to the floor in the coming days.

“I want to give credit where credit is due, and thank Speaker Boehner for his leadership here in defusing another fight over the debt ceiling. The middle class has been telling us they do not want another crisis, and this bill gives them the security they deserve.”

“In the event that Republicans make good on their threat by failing to act, or by moving unilaterally to pass a debt limit extension only as part of unbalanced or unreasonable legislation, we believe you must be willing to take any lawful steps to ensure that America does not break its promises and trigger a global economic crisis — without Congressional approval, if necessary,” the leaders write.

Senate leaders made clear their willingness to pursue balanced approach to cutting spending and reducing our deficit, but reiterated their insistence that any approach be a balanced between smart cuts and revenues from the wealthiest Americans.

###

The full text of the letter is below.

January 11, 2013

The President
The White House
Washington, DC 20500

Dear Mr. President:

As you know, Republican leaders are threatening to bring on an economic catastrophe unless Democrats make deep cuts to Social Security and Medicare.

This threat is outrageous and absurd. Defaulting on America’s legal obligations would undermine the American economy and spread global economic havoc. Just two years ago, Speaker Boehner himself admitted that failure to raise the debt limit “would be a financial disaster, not only for us, but for the worldwide economy.”

It is hard to imagine that the Speaker and Leader McConnell would really follow through on their threat to let our nation default on its debts. They are responsible leaders who know better. Sadly, some of their Republican colleagues do not. Therefore, we believe that you must make clear that you will never allow our nation’s economy and reputation to be held hostage. In the event that Republicans make good on their threat by failing to act, or by moving unilaterally to pass a debt limit extension only as part of unbalanced or unreasonable legislation, we believe you must be willing to take any lawful steps to ensure that America does not break its promises and trigger a global economic crisis — without Congressional approval, if necessary.

As you know, increasing the debt limit does not authorize new spending. It merely ensures that we meet our existing obligations. Those obligations were incurred by both Republicans and Democrats, and are the responsibility of all Americans.

Accordingly, we hope that you will continue to ignore claims that agreeing to an increase in the debt limit would somehow represent a concession by Republicans to Democrats. All Americans, Democrats and Republicans alike, have a stake in ensuring that our country meets its legal obligations. Financial markets have long viewed securities backed by the full faith and credit of the United States as the most trustworthy in the world. This lowers borrowing costs for homes, cars, and college for all Americans and strengthens our economy. If we violate that trust for the first time in history, we will never fully regain it, and every American will suffer.

For all these reasons, we support your view that an extension of the debt limit is not something for which Democrats should have to negotiate. At the same time, as a separate matter, we agree about the importance of developing a broad, bipartisan agreement on fiscal policy that strengthens our economy and reduces our long-term budget deficit.

As you have said, any such agreement must treat all Americans fairly and include not just responsible spending cuts but additional revenue from the wealthy and the elimination of wasteful tax breaks. It would be wrong to slash earned benefits for seniors and middle class families, while allowing corporations, millionaires, and billionaires to continue to exploit wasteful tax loopholes. We therefore hope that you will continue to insist that the entire budget be on the table, and that any agreement be fully balanced and fair.

Thank you for your consideration of our views.

Respectfully,

Senator Harry Reid
Senator Dick Durbin
Senator Chuck Schumer
Senator Parry Murray

A PDF of the letter can be found online here.

Washington, D.C. – Senate Majority Leader Harry Reid (D-NV) released the following statement today after Senator McConnell filibustered a bill to give the President the authority to raise the debt ceiling – a bill that Senator McConnell introduced earlier today.

“The Senate should pass Senator McConnell’s proposal to give the President the authority to avoid the knock-down, drag-out fight we had over the debt ceiling last year – a fight that caused the first-ever downgrade of this country’s credit, and cost our economy billions. Senator McConnell’s filibuster prevented us from having this vote today, but I will continue to seek an agreement to hold an up-or-down vote on his proposal to avoid another debt ceiling debacle.

“After leading three hundred and eighty five filibusters in recent years, Senator McConnell took obstruction to new heights by filibustering his own bill. Republicans’ obstruction and intransigence turned the last debt ceiling fight into a disaster for the middle-class. We should give American families the security of knowing we will never go through such a harmful ordeal again.”

“It is pretty galling for Speaker Boehner to be laying down demands for another debt ceiling agreement when he won’t even abide by the last one. The last thing the country needs is a rerun of last summer’s debacle that nearly brought down our economy.”

… but …

“Higher taxes, however, are still off the table, a Boehner aide said.”

Flashback: Last Time Boehner Forced A Standoff Over The Debt Limit

“This lengthy debate left Americans across the country wondering whether Congress would get the job done, or send our economy off a cliff. But in the end, both sides came together. Neither side got everything it wanted, but our nation got a bipartisan compromise that averts an economic catastrophe, and puts us on a path toward fiscal stability. This agreement cuts the deficit by nearly a trillion dollars now and lays the groundwork for Congress to deliver a balanced deficit reduction package this fall.

“As we craft the next step, Democrats will work to ensure that millionaires, billionaires, and corporate jet owners share in the pain of cutting back. Because that is a pain that millions of middle class families in Nevada and across the country feel every day. We need to do more for them. That is why Washington must now turn its focus back to Main Street, and start creating jobs.

“Today we made sure America will pay its bills. Now it’s time to make sure that all Americans can pay theirs.”

Washington, D.C. – Nevada Senator Harry Reid made the following remarks today on the Senate floor regarding what is at stake with a default. Below are his remarks as prepared for delivery:

As the clock ticks down to August 2, I want to remind everyone within the sound of my voice what is at stake in this debate.

This very moment, millions of Americans seniors worry that their next Social Security check might not come on Wednesday.

Middle-class families wonder whether their retirement accounts will be wiped out by an economic collapse brought on by a default on this nation’s debt.

And active duty military personnel – including many who are risking their lives for our great nation – worry whether they will receive their paychecks.

The Associated Press reported that Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, visited with troops serving in Afghanistan yesterday. And the soldiers Admiral Mullen talked to weren’t asking about military strategy or how a troop drawdown in Afghanistan would affect them.

They asked whether they would get paid if Republicans force the U.S. government to stop paying its bills.

In a region that has been wracked by violence and plagued by suicide bombers this month, they wondered how they would take care of their families if their checks stopped coming next month.

Let me read you a little bit of that Associated Press story.

“A half a world away from the Capitol Hill deadlock, the economy and debt crisis are weighing heavily on U.S. troops in Afghanistan.

“And the top question on their minds Saturday even as bombings rocked the city around them, was one the top U.S. military officer couldn’t answer.

“Will we get paid?”

Admiral Mullen told them he didn’t know the answer to their question, but that either way those soldiers must continue to work every day.

This is unacceptable.

In a country as rich and powerful as ours, men and women with bombs going off around them shouldn’t worry whether this country will leave them high and dry.

This afternoon, I ask those who have said they will never compromise on any terms to think about who their stubbornness will hurt.

I have spoken to the Vice President this morning. He is hopeful, as I am, that we are close to an agreement with Republican leaders.

The framework of this agreement is based on some new ideas and some old ones. After speaking to Republican Leader Mitch McConnell this morning, I would say we are both cautiously optimistic we will reach a conclusion soon.

There are a number of major issues yet to be resolved in these ongoing discussions. Each of them must be resolved before we will have a final agreement.

But we must get something done as quickly as possible, and I believe all sides are aware of the urgency.

It is unfortunate that the House of Representatives wasted all of last week on legislation they knew would never pass the Senate – and, in fact, barely passed the House with only Republican votes.

Democrats have said all along that we would never agree to a short-term arrangement that would put our economy at risk and force Congress into another debt ceiling showdown in a few weeks.

I have always said the long-term approach taken by the Senate legislation was absolutely necessary. We must give the financial markets confidence this country will not shirk its obligations now or in the future.

There are still elements of the agreement to be resolved, and Democrats are watching the process closely.

I am satisfied the compromise being discussed at the White House adopts the Senate’s long-term approach, which will give the economy the certainty it needs.

It is also crucial the agreement being crafted set on us on the path to fiscal restraint.

I believe the settlement must include thoughtful constraints on spending. The 12-member commission I conceived to recommend additional deficit reduction measures this year will be key to that effort.

Sen. McConnell and I agree Congress owns the responsibility to set this country on the path to fiscal sustainability. This commission will assure we undertake that responsibility.

When I conceived of this commission, I knew it was important that it achieve real results. And it will be essential to choose members with open minds willing to consider every option – even when those options are tough pills to swallow for both parties.

Cooperation is the only way forward. This is what Andrew Carnegie once said about the virtue of compromise:

“I shall argue that strong men… know when to compromise and that all principles can be compromised to serve a greater principle.”

But perhaps President Abraham Lincoln said it best when he said this:

“Determine that the thing can and shall be done, and then we shall find the way.”

For the last few weeks Congress has been locked in partisan gridlock. Today, I am relieved to say that leaders from both parties have come together for the sake of our economy to reach a historic, bipartisan compromise that ends this dangerous standoff. The compromise we have agreed to is remarkable not only because of what it does, but because of what it prevents: a first-ever default on the full faith and credit of the United States.

Sometimes it seems our two sides disagree on almost everything. But in the end, reasonable people were able to agree on this: the United States could not take the chance of defaulting on our debt, risking a United States financial collapse and a world-wide depression. America and the world have been watching our Democracy expectantly. And my message tonight is that this nation and this Congress are moving forward together. Reaching a long-term accord that would give our economy the certainty it needs was not easy.

But our work is not done. Leaders from both parties and in both chambers will present this agreement to our caucuses tomorrow. Senate Democrats will meet at 11 a.m. To pass this settlement, we’ll need the support of Democrats and Republicans in both the House and Senate. There is no way either party – in either chamber – can do this alone. As President Lyndon Johnson said, “There are no problems we cannot solve together, and very few that we can solve by ourselves.” Democrats and Republicans have rarely needed to come together more than today.

I know this agreement won’t make every Republican happy. It certainly won’t make every Democrat happy, either. Both parties gave more ground than they wanted to. And neither side got as much as it had hoped. But that is the essence of compromise. And the American people demanded compromise this week.

Republicans leaders in the House of Representatives wasted this week pursuing a right-wing proposal they knew from the start could not pass the Senate.

From the very beginning the Speaker’s Band-Aid approach was fatally flawed – it would have put us back in this incredible position, fighting the clock to prevent financial collapse, in just a few weeks.

It was a concession to Tea Party extremists, yet it barely passed the House yesterday with only Republican votes. And it failed on a bipartisan basis last night in the Senate.

But knowing all along that this radical legislation – which was neither balanced nor bipartisan – would not and could not pass in our chamber, Democrats have been working on a true compromise in the Senate.

We have solicited ideas from our Republican friends and colleagues. Let it never be said that Democrats in the Senate were afraid to compromise. We welcome it.

As recently as yesterday morning I asked my friend, the Senate Minority Leader, to help make this Senate compromise more palatable to Republicans. Yet we have heard nothing from the Republican leader.

My friend, Sen. McConnell, did not answer the call to negotiate yesterday or any other day this week. He did not come to the table on behalf of his caucus with ideas to improve a proposal already cut from Republican cloth.

But Democrats are still willing to sit down and negotiate. My door is still open.

I appreciate that several of my Republican colleagues have reached out to me over the last few hours, hoping to reach a compromise. Senate Democrats welcome their input and look forward to working with them on a path forward.

But my friend, the Republican leader of the Senate, must come forward as well.

The two parties must work together to forge an agreement that preserves this nation’s economy. We will need the help of reasonable Republicans – including Sen. McConnell – to get this done.

But unbelievably, another filibuster stands in our path.

The Republican filibuster has become routine. From the smallest measure to the greatest matter of national importance, they stall and delay and use every procedural trick in the book to keep this body from doing its job.

But a filibuster at this late hour, and when so much is at risk, is irresponsible. It puts our economy at risk.

A majority vote was good enough for the Speaker’s proposal in the House of Representatives yesterday, but Republicans believe it isn’t good enough for the Senate today.

Rather than filibuster, I ask that my Republican colleagues work with Democrats to make our proposal better.

We have offered a reasonable, rational way for Republicans to help us avert default. Let me tell you about it.

This amendment was written by Democrats with both parties’ principles in mind. It would:

• Avert default while cutting about $2.4 trillion from the deficit over a decade.  It includes no revenues, a concession to House Republicans.
• It establishes a Joint Congressional Committee to find additional savings this year, and guarantees that committee’s recommendations will see an up-or-down vote on the Senate floor.
• And literally every single spending cut in it has been voted for or endorsed by Republicans in both houses of Congress.

We have made several changes to make this proposition amenable to our Republican colleagues. We have:

• Improved the program integrity language to allow more savings by combating government waste and fraud.
• Removed a measure that would have raised revenue by selling spectrum, which would have caused a Blue Slip process in the House.
• Added a process conceived of by my friend, Sen. McConnell, to allow two additional votes over the next year and a half – two motions of disapproval – before the President may raise the debt ceiling.

This proposal also protects Social Security, Medicare and Medicaid benefits. But as you can see, this amendment was designed to appeal to our Republican colleagues as well as to Democrats.

As I said, we are willing to listen to ideas from the other side to make this proposal better. But time is short.

Already the economy has gone from bad to worse. Stocks continued a weeklong slide yesterday.

I know my Republican colleagues love this country. I believe they want to do what is best for our economy.

That is why together we must avert a default that would jeopardize veterans’ benefits, seniors’ Social Security payments and checks for troops on the front lines. It would also effectively raise taxes on every American family and business, increasing the cost of everything from groceries to the mortgage.

And so I urge them to join me to move forward the only true compromise plan left – in fact, the only option left at all – to save this country from default.

“We are seeing something we have seen far too many times in the Senate: another filibuster. But this is the worst possible time to hold a filibuster. Our economy hangs in the balance. The proposal I have put forward is a reasonable compromise. It gives Democrats what they want, and it gives Republicans what they want. If we do nothing, our country will fail to pay its bills for the first time in history. Social Security checks could stop. Paychecks to our troops could stop.

“This compromise proposal deserves a fair up or down vote. The House will hold an up or down vote on my proposal. We should be allowed to do the same. But Republicans are blocking it with our economy on the line.

“It is time to be adults. It is time to come together and compromise. That is what the American people want, and that is what we need to do.”

Washington Post: ‘What Will Mitch McConnell Do?’

WaPo: MCCONNELL HAS BEEN HOLDING OUT FOR THE BOEHNER BILL

“McConnell, to date, has deferred to the House Republican majority to pass a bill — issuing a series of strong statements expressing support for the Boehner legislation.  And, according to aides familiar with McConnell’s thinking, he remains committed to allowing the vote to play out in the House before making any move in the Senate.”  [Washington Post, 7/29/11]

WaPo: ‘HOW LONG CAN MCCONNELL WAIT?’

“The question is how long he can wait. House Republican leaders appear to be doing everything in their power to get the votes they need lined up for a vote Friday on Boehner’s bill.    But, their struggles on Thursday — delaying the vote before postponing it entirely — suggest that there is no simple solution(s) to the problem facing Boehner and the other leaders.” [Washington Post, 7/29/11]

WaPo: ‘PRESSURE WILL MOUNT ON MCCONNELL’ TO STRIKE A DEAL

“If they still can’t pass the bill with the weekend approaching, pressure will mount on McConnell to enter into conversations with Senate Majority Leader Harry Reid about the possibility of a compromise moving through the upper chamber. … The question for McConnell — and everyone else following this debt ceiling debate closely — is when (and if) he decides to go beyond simply pledging his support for the House plan and begins to negotiate with Reid in his own right.  Given what happened in the House on Thursday night, McConnell may be the best hope all sides have of a compromise deal before next Tuesday’s deadline.” [Washington Post, 7/29/11]

TIME: AS MCCONNELL WAITS, HE HAS ‘WEAKER HAND TO NEGOTIATE’

“A final debt ceiling compromise will likely require a coalition of Democrats and moderate Republicans to pass the House, and the outspoken conservative wing of the party will not be on board. That could embolden Democrats to seek a more favorable deal, and it leaves Senate Republicans like Minority Leader Mitch McConnell with a weaker hand to negotiate.”  [Time Magazine, 7/29/11]

Although the House of Representatives has not yet voted on Speaker Boehner’s plan, that plan is flawed.

That is why they have struggled for days to pass this inadequate legislation without a single Democrat. They have plowed forward, looking only to Republicans.

But as with the battle to pass a Continuing Resolution and keep our government open for business a few months ago, the Republican leadership was unable to get the votes with only Republicans. Speaker Boehner had to look to Democrats.

That’s how it’s supposed to work – Democrats and Republicans working together.

A Band-Aid approach to a world crisis is an embarrassment to Congress, to this country and to the world.

United Senate Democrats – all 53 of us – have informed the Speaker that his legislation was doomed in the Senate, because we would not vote for a short-term extension of the debt ceiling. It would put our great nation on the path to another default extravaganza in a few weeks.

Virtually every expert – every economist, every rating agency, every market analyst – has said the kind of short-term plan the Speaker proposed was no answer to the crisis Republicans have created. If we are trying to avert the kind of financial calamity default would bring, the Republicans’ plan is not was not a solution.

As the experts say, all too soon we would be back in the midst of partisan wrangling, with our economy once again held prisoner by extremist Tea Party Republicans.

Our economy cannot bear this kind of uncertainty any longer.

Congress and the White House are on lockdown, and the business of the country is not being conducted.

I say no, not again will we fight another battled like the one in which we are now engaged.

But default is not an option, either. And we cannot wait for the House any longer.

It is time for Republicans to stop the political games and embrace compromise.

No matter how long Republicans delay, the deadline will not move. We have hours – I repeat, hours – to act.

That is why, by the end of the day today, I must take action on the Senate’s compromise legislation.

The legislation in point would cut $2.4 trillion from the deficit over the next decade and avert a default on our national debt. It would protect Social Security and Medicare without raising a penny of revenue.

The question is – will today’s Republicans break away from the shrill voice of the Tea Party and return to the Republican Party of Ronald Reagan?

This is likely our last chance to save this nation from default.

I have invited Sen. McConnell to sit down with me, and to negotiate in good faith knowing the clock is running down. I hope will accept my offer.

I know the Senate compromise bill Democrats have offered is not perfect in Republican’ eyes. Nor is it perfect for Democrats.

But together, we must make it work for all of us. It is the only option.

The settlement on the table will never give either party everything it wants. But it already meets the Republicans’ demands.

John McCain, the Republican senior senator from Arizona and President Obama’s opponent in the last presidential election, has asked his party to compromise.

It “is not fair to the American people, to hold out and say we won’t agree to raising the debt limit,” he said. He called the radical Republican approach “unfair” and “bizarro.”

“It’s time we listened to the markets,” he said. “It’s time we listened to the American people and sit down and seriously negotiate.”

And former Senator Fred Thompson, a Republican, asked members of his own party to come to their senses.

“I respectfully suggest that you rake in your chips [and] stuff them in your pockets,” Thompson urged Republicans.

I hope my friend, Sen. McConnell, will come to me by the end of the day and indicate what constructive ideas he has to move the process along.

My door is open. I will listen to any idea to get this done in a way that prevents a default and a dangerous downgrade to America’s credit rating.

Time is short, and too much is at stake to waste even one more minute.

The last train is leaving the station.

The vote on this compromise will determine whether we enter the frightening world of default.

A vote for the Senate compromise will be a vote to honor the financial obligations of this great nation – to pay the bills.

A vote against this compromise will be a vote to default on the full faith and credit of the United States of America.

There will be no time left to vote on another bill or consider another option here in the Senate. None.

This is our last, best chance to preserve the character and credit of this great nation.

“Today the House of Representatives will vote on Speaker Boehner’s short-term plan to raise the debt ceiling. As soon as the House completes its vote, the Senate will move to take up that bill, and it will be defeated tonight. No Democrat will vote for a short-term Band-Aid that would put our economy at risk and put the nation back in this untenable situation a few short months from now.

“Economists have said a short-term deal holds many of the same risks as a technical default. Democrats are not willing to put our economy on the line like that. Our economy and the financial markets desperately need stability. Speaker Boehner’s bill does not provide it. It is time for Tea Party Republicans to stop resisting compromise. They must join Democrats and Republicans of good will in putting the good of our economy ahead of politics.”

VIEW THE VIDEO CLIP HERE:

WASHINGTON, D.C. – Senate Democrats today released a new video that makes it clear: the markets would be endangered by Speaker Boehner’s short-term debt plan.  In this one-minute clip, market experts sum up their concerns — a short-term plan would likely cause a dangerous credit rating downgrade and could lead to a default on our nation’s obligations.

The Senate’s plan to raise the debt ceiling through 2012 is the only proposal out there that can avoid such devastating effects on the economy.  Senate Majority Leader Harry Reid says the Senate plan “is a long-term strategy to safeguard the economy and give the markets the stability they need.”  It’s time for House Republicans to pull the plug on the reckless Boehner bill and work with Democrats to prevent a default.

A sample of market experts in the video:

• S&P’s David Beers: “We would be concerned if we thought that the debt ceiling debate would come back and be opened and we’d have to go through all this again and again and again.”
• Chairman and CEO of Alcoa Klaus Kleinfeld: “A short-term plan that doesn’t get us over the hump will not solve…”
• NASDAQ CEO Robert Greifeld: “The longer the deal that Congress makes… the better markets will feel about it”
• Former VP of The Federal Reserve Alan Blinder: “The Boehner plan is going to have us fighting this out again in a matter of months, and we don’t need that”

Washington, D.C. – Nevada Senator Harry Reid made the following remarks today on the Senate floor regarding a default crisis. Below are his remarks as prepared for delivery:

Five days remain until a few extremist Republicans drive our economy off a cliff because they are too radical and inexperienced to compromise.

Financial experts are begging Congress to come to an agreement that averts a first-ever default on this nation’s financial obligations. This is what one financial analyst said yesterday about the need to avert a default crisis that would spark a global economic depression:

“The market is saying, ‘we need a deal here…’ Default is starting to seep into the marketplace.”

It won’t be long, they say, before financial markets severely react to continued stubbornness by Tea Party Republicans, tanking our economy.

Wall Street had a very bad day yesterday – its worst in months – largely based on the news that Congress has still not found a path forward.

That doesn’t only affect big investment banks or wealthy investors. All around the country, ordinary Americans with 401k’s and college savings accounts lost money yesterday. Their life savings took a hit because a small group of radical Republicans who don’t represent mainstream America have refused to move even one inch toward compromise.

Yesterday’s bad economic news should be a sign to those Republicans who deny reality. Default will rock our financial system to its core.

Many reasonable Republicans realize time is running out. They have urged their colleagues to compromise.

Yesterday on the Senate floor, John McCain, the Republican senior senator from Arizona and President Obama’s opponent in the last presidential election, asked his own party to return to reality.

It “is not fair to the American people, to hold out and say we won’t agree to raising the debt limit,” he said. He called the radical Republican approach – saying up is down and denying the sky is blue – “unfair” and “bizarro.”

“It’s time we listened to the markets,” he told his colleagues. “It’s time we listened to the American people and sit down and seriously negotiate.”

He was talking to his fellow Republicans, and in particular to a Tea Party that doesn’t seem to realize Republicans control only one half of one branch of government. That faction of the Republican Party is holding our economy hostage.

My counterpart, Sen. McConnell, also urged a return to reason.

“We cannot get a perfect solution, from my point of view, controlling only the House of Representatives. So I’m prepared to accept something less than perfect, because perfect is not achievable.”

Both sides know that neither side will get everything it wants. That does not mean we should not come together to find a compromise that gives each side something it needs.

Republicans have drawn the line at ending wasteful tax breaks for corporate jet owners and oil companies making record profits. They have vowed to protect corporate welfare at taxpayer expense.

Democrats have vowed to protect senior citizens who rely on Social Security and Medicare benefits. We will not allow them to suffer while Republicans protect tax breaks for billionaires.

The compromise plan we’re considering here in the Senate protects both those priorities. Unfortunately, in a concession to Republicans, it does not ask millionaires and billionaires to contribute their fair share. But it does protect the seniors Republicans insist should feel the pain.

It would also avert a default crisis while cutting $2.5 trillion from the deficit. That’s more than the Speaker can say for his plan.

Yet House Republicans refuse to support the Senate compromise.

I am happy to talk to my Republican colleagues and listen to reasonable suggestions to make the Senate compromise legislation even better. That would require Tea Party Republicans to admit compromise is not a bad word. Legislation is the art of compromise. They need to learn that.

A significant number of House Republican has said their party would rather see this nation default on its financial obligations than cooperate with Democrats.

This kind of thinking has been roundly rejected by the American people. Nearly three quarters of Americans want Congress to compromise even if neither side gets everything it wants.

This thinking has also been rejected by reasonable Republicans. In an open letter to the House GOP, former Senator Fred Thompson, a Republican, urged members of his own party to recognize a good deal when they see it.

“I respectfully suggest that you rake in your chips [and] stuff them in your pockets,” Thompson urged Republicans.

The proposal on the table would cut the deficit by $2.5 trillion. If their goal is truly to rein in spending, they’ve already won, he said. Republicans should know when to take their chips and walk away.

American writer Elbert Hubbard said “It is easy to get everything you want, provided you first learn to do without the things you cannot get.”

Republicans cannot get the short-term Band-Aid they will vote on in the House today.

It will not get one Democratic vote in the Senate. All 53 members of the Senate Democratic Caucus wrote to the Speaker last night to tell him they will not vote for it.

The economy needs more certainty than the Speaker’s proposal would provide. We must not be back here in six weeks or six months debating whether to allow our nation to default on its financial obligations for Republicans’ political gain.

It would be easy for Republicans to get nearly everything they want, if only they embraced the Senate’s true compromise plan – and stop, as Sen. McCain put it, “deceiving” the American people.

The question remains, will my Republican colleagues be wise enough to end this stalemate?

In Closed-Door Meeting Earlier Today, Boehner Told House GOP Caucus Senate Would “Fold” And Accede To His Debt Plan

Boehner Plan Not Only Puts America’s Credit Rating at Risk, But Would Empower House GOP To Hold Economy Hostage Again In 6  Months

WASHINGTON, D.C. – Senate Majority Leader Harry Reid (D-NV) announced late Wednesday that the entire Senate Democratic caucus has signed a letter to House Speaker John Boehner stating they will vote against his short-term plan to raise the debt ceiling should it pass the House.

According to published reports, the Speaker, in an effort to quell a rebellion among conservatives in his caucus, pressed his case for House passage by predicting that the Senate would “fold like a cheap suit” and accept his plan.  The letter, signed by all 51 Senate Democrats and two independents, shows otherwise.

“We heard that in your caucus you said the Senate will support your bill,” the Senators wrote  “We are writing to tell you that we will not support it, and give you the reasons why.”

The senators continued: “In addition to risking a downgrade and catastrophic default, we are concerned that in five or six months, the House will once again hold the economy captive and refuse to avoid another default unless we accept unbalanced, deep cuts to programs like Medicare and Social Security, without asking anything of the wealthiest Americans.”

In the last two days, the Speaker’s plan to raise the debt ceiling has faced mounting difficulty. Since Tuesday, the Speaker faced opposition from House conservatives who rejected the proposal in favor of the “Cup, Cap and Balance” plan.  Also, CNN has reported that S&P would likely downgrade America’s credit rating if the Boehner plan was signed into law.

Today, while hastily rewriting portions of the legislation, Speaker Boehner went before his caucus seeking to secure enough votes to pass the measure.  His claim that the Senate would simply pass whatever the House sent them was part of this final pitch. The Democratic caucus’ letter tonight officially disproves that claim.

The full text of the letter is below and available here as a PDF.

July 27, 2011

Speaker John Boehner
U.S. Capitol, H-232
Washington, DC  20515

Dear Speaker Boehner:

With five days until our nation faces an unprecedented financial crisis, we need to work together to ensure that our nation does not default on our obligations for the first time in our history. We heard that in your caucus you said the Senate will support your bill.  We are writing to tell you that we will not support it, and give you the reasons why.

A short-term extension like the one in your bill would put America at risk, along with every family and business in it.  Your approach would force us once again to face the threat of default in five or six short months.  Every day, another expert warns us that your short-term approach could be nearly as disastrous as a default and would lead to a downgrade in our credit rating.  If our credit is downgraded, it would cost us billions of dollars more in interest payments on our existing debt and drive up our deficit.  Even more worrisome, a downgrade would spike interest rates, making everything from mortgages, car loans and credit cards more expensive for families and businesses nationwide.

In addition to risking a downgrade and catastrophic default, we are concerned that in five or six months, the House will once again hold the economy captive and refuse to avoid another default unless we accept unbalanced, deep cuts to programs like Medicare and Social Security, without asking anything of the wealthiest Americans.

We now have only five days left to act.  The entire world is watching Congress.  We need to do the right thing to solve this problem.  We must work together to avoid a default the responsible way – not in a way that will do America more harm than good.

Sincerely,

Harry Reid (D-Nev.)
Dick Durbin (D-Ill.)
Charles Schumer (D-N.Y.)
Patty Murray (D-Wash.)
Daniel Inouye (D-Hawaii)
Patrick Leahy (D-Vt.)
Max Baucus (D-Mont.)
Carl Levin (D-Mich.)
Jeff Bingaman (D-N.M.)
John Kerry (D-Mass.)
Tom Harkin (D-Iowa)
Jay Rockefeller (D-W.Va.)
Barbara Mikulski (D-Md.)
Kent Conrad (D-N.D.)
Herb Kohl (D-Wis.)
Joe Lieberman (I-Conn.)
Daniel Akaka (D-Hawaii)
Dianne Feinstein (D-Calif.)
Barbara Boxer (D-Calif.)
Ron Wyden (D-Ore.)
Tim Johnson (D-S.D.)
Jack Reed (D-R.I.)
Mary Landrieu (D-La.)
Bill Nelson (D-Fla.)
Tom Carper (D-Del.)
Debbie Stabenow (D-Mich.)
Maria Cantwell (D-Wash.)
Ben Nelson (D-Neb.)
Frank Lautenberg (D-N.J.)
Mark Pryor (D-Ark.)
Bob Menendez (D-N.J.)
Benjamin Cardin (D-Md.)
Bernie Sanders (I-Vt.)
Sherrod Brown (D-Ohio)
Jim Webb (D-Va.)
Bob Casey (D-Pa.)
Claire McCaskill (D-Mo.)
Amy Klobuchar (D-Minn.)
Sheldon Whitehouse (D-R.I.)
Jon Tester (D-Mont.)
Mark Udall (D-Colo.)
Tom Udall (D-N.M.)
Jeanne Shaheen (D-N.H.)
Mark Warner (D-Va.)
Kay Hagan (D-N.C.)
Jeff Merkley (D-Ore.)
Mark Begich (D-Alaska)
Michael Bennet (D-Colo.)
Kirsten Gillibrand (D-N.Y.)
Al Franken (D-Minn.)
Joe Manchin (D-W.Va.)
Chris Coons (D-Del.)
Richard Blumenthal (D-Conn.)

VIEW THE CLIP HERE:

Washington Post: House GOP Leadership Showed Violent Scene From “The Town” Tuesday To Entire Caucus for Inspiration

“House Majority Whip Kevin McCarthy (R-Calif.), the party’s vote counter, began his talk by showing a clip from the movie, “The Town”, trying to forge a sense of unity among the independent-minded caucus. One character asks his friend: “I need your help. I can’t tell you what it is. You can never ask me about it later.’ ‘Whose car are we gonna take,’ the character says. [Washington Post, 7/26/11]

Controversial Congressman Allen West Responded Enthusiastically to the Video.

“I’m ready to drive the car,” West replied, surprising many Republicans by giving his full-throated support for the plan.  [Washington Post, 7/26/11]

Next Scene In Movie Shows Characters Committing Violent Assault.

“In the movie, the characters then put on hockey masks and bludgeon two men with sticks, then shoot one man in the leg.”  [Think Progress, 7/27/11]

Film’s Director/Star Responded to Video Being Shown, Said It Was Bizarre.

“On Wednesday, Affleck — who wrote and directed “The Town” — said that he too found the whole scenario a touch bizarre. And in a statement his spokesperson provided to The Huffington Post, he suggested that Republicans use a different one of his movies next time they need to whip votes. ‘I don’t know if this is a compliment or the ultimate repudiation,’ said the actor, who is currently in Turkey directing and starring in Argo, an adaptation of the Tehran hostage crisis. ‘But if they’re going to be watching movies, I think “The Company Men” is more appropriate.’ That latter Affleck flick focuses on the plight of middle age men who have been laid off during the recession. [Huffington Post, 7/27/11]

• The Senate plan received a major boost this morning when Congress’ official scorekeeper confirmed that the plan’s first draft cuts budget deficits more than the Boehner plan. According to the Congressional Budget Office, the Senate draft bill achieves $1.3 trillion more in deficit reduction than the Boehner plan.
• The report also affirms that the Senate plan’s $1 trillion in savings from the Iraq and Afghanistan wars are real.
  • This completely undercuts the argument by Republicans who have tried to call these savings a gimmick even though they included them in their own budget and voted for them only a few months ago.
• Plus, since CBO only measured the plan’s first draft—before additional planned savings were incorporated into the bill—the final version of the Senate plan will achieve even deeper savings when it is filed on the floor.
• As Politico reports this morning, “in the battle of budget scores, the Senate Democrats deficit reduction bill is the clear winner thus far over an alternative by Speaker John Boehner.” [Politico, “Reid savings trumps Boehner plan,” 7/27/11]

Last night Speaker Boehner pushed back that vote because this legislation doesn’t even have the support of Republicans in his own chamber. But pushing back the vote by a day or rewriting parts of this bill won’t solve the underlying problem: a short-term solution is not an adequate solution for our economy.

Even if the Speaker could get his legislation through the House of Representatives, I can assure you the Senate would not pass it and President Obama would not sign it.

Rather than lifting what economists call the fog of default, this Republican plan would usher in an era of bad economic weather that could last for years.

A few weeks ago, Speaker Boehner said it was a terrible idea to merely postpone a default on the national debt, or to push the problem down the road a few weeks or a few months.

Back then, he was not interested in a short-term solution. Back then he was right.

This is why: Economists, market analysts and rating agencies have said the world economy simply cannot bear this kind of uncertainty any longer.

They have said a short-term solution to the impending default would still result in a loss of the AAA credit rating that has kept interest rates low in this country and saved consumers money for 70 years.

I trust that Speaker Boehner and other reasonable Republicans understand the seriousness of a default crisis. Here is what the Speaker said recently:

“That would be a financial disaster not only for our country, but for the worldwide economy. You can’t create jobs if you default on the federal debt.”

But a short-term fix doesn’t get the job done. It would cause many of the same calamitous results as a technical default, including rising interest rates that would essentially raise taxes on every person in this country.

American families would pay more for their mortgages, car loans, student loans, credit card bills and much, much more.

And higher interest rates wouldn’t just be costly for consumers. They would also cost the federal government more – and would actually increase our deficits and debt.

A less than one percent increase in interest rates – which economists have predicted if U.S. debt is downgraded – would cost our government more than $100 billion every year. I repeat – it would cost the U.S. government $100 billion every single year.

In a decade, that would cost this country as much taxpayer money as Speaker Boehner’s proposal would cut from the deficit. In effect, his short-term plan would yield not a single dime of savings.

Republicans would like the American public to believe Democrats in Congress and the White House are insisting on a long-term deal for political reasons. They say Democrats just want to push this off until after the presidential election.

That’s simply not true. It is not Democrats who have asked for a long-term solution. It is the economy that has demanded it.

If Republicans in Congress are willing to risk our economy by playing politics in July, why wouldn’t they do the same thing in January?

That is why every economist, every market analyst, every rating agency has insisted any legislation to avert a default on the nation’s debt must take us through the end of 2012.

The Senate is considering a measure that would avert default and cut $2.7 trillion from the deficit. It is a reasonable measure, and Republicans have supported every one of its cuts in the past, and it should be able to pass both Houses of Congress with bipartisan support.

It gives each side something it wants: it protects Social Security and Medicare without raising a single penny of revenue. And, most importantly, it is a long-term strategy to safeguard the economy and give the markets the stability they need.

Unlike Speaker Boehner’s legislation, which economists have rejected, it would not put us through this all again in six months, and with even less certainty of achieving compromise.

British Prime Minister David Lloyd George once said, “There is nothing more dangerous than to leap a chasm in two jumps.”

Congress has a duty to do what it takes to avert a national default in one, swift leap.

That will take political courage. I urge my Republican friends to join hands with Democrats. We can take courage from one another, and make the leap together.

Because if we don’t clear this chasm, our nation’s economy will go over the edge with us.

There has been a lot of talk in the last 24 hours about so-called dueling plans to raise the debt limit and avert a dangerous default on this nation’s financial obligations.

As far as I can tell, the only dueling going on in Washington today is between the Republican Party’s multiple personalities.

Last night I introduced an amendment I thought was failsafe – it would prevent default using only proposals Republicans have already supported. Yet House Republicans had harsh words for Democrats’ plan yesterday – odd considering every bit of our proposal was taken from the Republican playbook.

Let me explain the plan.

It would avert default while cutting $2.7 trillion from the deficit in the next decade. It would cut more money more quickly than a competing proposal introduced by Republican leaders yesterday.

The proposal includes no revenues, as House Republicans insisted it must not. It holds harmless even the most wasteful of tax breaks and giveaways to Big Oil and billionaires, who Republicans have vowed to protect even if it costs our economy in the process.

It establishes a Joint Congressional Committee to find additional savings this year, and guarantees that committee’s recommendations will see an up-or-down vote on the Senate floor.

And every single spending cut in the proposal has already been endorsed by Republicans. The cuts have already been voted for by Republicans in both houses of Congress.

In short, it is everything Republicans have demanded wrapped up in a bow and delivered to their door.

But now Republicans say their demands, which have been met in full, are not enough.

They insist instead that we pass their plan – a very similar plan, save for several crucial details. Their plan also raises the debt ceiling, cuts spending and includes no revenue increases. These are the major differences:

• It does not cut as much from the deficit as the legislation I introduced last night,
• And it is a short-term fix that Republicans know is untenable to Democrats in the White House and Congress.

Not long ago, it was untenable to Republicans, too.

This is what Speaker Boehner said about short-term measures in May:

“I’m not really interested in a short term increase in the debt limit… Our economy won’t grow as long as we continue to trip it up with short-term gimmicks from Washington.”

House Majority Leader Eric Cantor echoed the sentiment in June:

“I’m not sure how if we’re not willing to make tough decisions now, we’ll be willing to later… It is my preference that we do this thing one time… Putting off tough decisions is not what people want.”

Democrats agree.

This is what the Washington Post said about Republicans’ bizarre about-face yesterday:

“It seems that perhaps the only meaningful difference between the two plans is that the Democratic one gets it done in one fell swoop, while the GOP proposal does a short-term deal followed by another one later – something that financial analysts say could lead to a downgrade of the U.S. credit rating and that Republicans themselves once opposed.”

But now Republicans are insisting we relive the endless negotiations and partisan wrangling of the last six weeks again six months from now, with no good outcome guaranteed.

As I’ve said, a short-term solution isn’t really a solution at all. And it puts us right back in this untenable position a few short months from now.

It gives the markets no stability. It gives the American people no certainty. And it gives the credit rating agencies no choice but to downgrade U.S. debt – a move that would cause interest rates to rise and effectively increase taxes for every American family.

Market analysts and credit rating agencies have said a short-term fix would risk many of the same effects as a default, and that’s a risk our economy can’t afford.

If Republicans continue to oppose the reasonable proposal I brought to the floor last night, and which we’ll vote on here in the Senate soon, it will be for political reasons driven by the ideological Tea Party. It will be crystal clear that House Republicans don’t care if we default on the debt.

After all, we’ve given them a plan that should, by all rights, be guaranteed to pass the House and Senate with bipartisan support. Yet they’ve trashed it right out the gate.

Yesterday the Washington Post called this debate over whether to default on the full faith and credit of the United States of America “surreal” and “bizarre.” And this commentary is valid.

Reasonable Republicans have been offered absolutely everything they’ve asked for. Still, they refuse to take yes for an answer, all because of a cadre of unreasonable Tea Party-driven House Republicans.

Every day, people from across this great nation and around the globe come here – to the U.S. Capitol Building – to see the seat of American democracy.

Every day, those of us who are fortunate to have been elected by our home states to serve in Congress also come here to represent this nation and the American people in that democracy.

And every day, a brave and dedicated group of men and women come here to serve on the Capitol Police force, to ensure that whether we’re here to work or to visit we are safe from harm.

In 1998, two of those dedicated police officers gave their lives while protecting the Capitol. They were Special Agent John Gibson and Officer Jacob Chestnut.

Thirteen years ago yesterday, a man entered the House side of the Capitol Building with a gun and shot Officer Chestnut at point blank range. Agent Gibson warned tourists and staff to take cover and then confronted the gunman. Although Agent Gibson was also shot, he prevented anyone else from being killed.

Both officers died that day. They served a combined 36 years on the force protecting their fellow men and women.

When I first came to Washington, D.C., I worked the night shift – the swing shift – as a Capitol Police officer. That’s why I feel a particular closeness to the Capitol Police.

I was never in danger. I was never called upon to put my life on the line. I only hope I would have shown the bravery that Agent Gibson and Officer Chestnut displayed.
I was a member of the Senate when Agent Gibson and Officer Chestnut gave their lives to save the lives of others.

I know nothing can make up for the loss of a cherished loved one, but I hope their families and friends take some comfort knowing that those of us who were here that day hold them in our memories and in our hearts.

And while I know it is little solace to their families, the tragedy of that day made the Capitol a safer place. It led to the construction of the Capitol Visitor Center, which prevents a madman like the one who shot Agent Gibson and Officer Chestnut from entering the Capitol.

We are all grateful for their sacrifice. And we are grateful that every day devoted men and women like them guard these hallowed halls.

Some of those dedicated police officers stood guard Saturday and Sunday as we worked to reach an agreement to avert a default on the national debt. Leaders from both parties were here throughout the weekend.

Differences still separate our two sides, but work toward an agreement continues.

This afternoon I will bring to the floor a proposal I hope can break the impasse. This legislation would put to rest the specter of default. It would cut $2.7 trillion from the deficit over the next decade. It would not raise any new revenue or make any cuts to Medicare, Medicaid or Social Security benefits. All the cuts included in this package have previously been supported by Republicans.

This proposal provides everything House Republicans have said they needed from an agreement to avert default and cut the deficit.

I hope my colleagues on the other side still know a good deal when they see it. I hope they remember how to say “yes.”

Tea Party-led House of Republicans held up a resolution to these negotiations for weeks because they didn’t want oil companies, corporations that ship jobs overseas or millionaires and billionaires to pay their fair share.

If they now oppose an agreement that meets every one of their demands, it will be because they have put politics first and the good of this nation and its economy last.

I also hope they will not continue to insist on the kind of short-term fix they opposed a few short weeks ago – and that they know Democrats in the Senate will not pass and the President will not sign.

Economists have already said a short-term solution is no solution at all. It will not give the markets the certainty they need. And the credit rating agencies have said a short-term Band-Aid could have many of the same effects as default: a downgrade of U.S. debt, soaring interest rates and an effective tax increase on every American family and business.

The financial markets don’t trust the right wing, Tea Party-led House of Representatives not to hold this process hostage again in six months, or to make the right decision for our nation and the economy a second time.

This is what one market analyst said about a plan to avert default for only a few months:

“From the markets’ point of view, a two-stage plan is a non-starter because we now know it is amateur hour on Capitol Hill and we don’t want to be painted in this corner again.”

The markets need certainty. America needs certainty. The world needs certainty. And an agreement that provides that certainty is within our grasp.

Democrats have done more than meet Republicans in the middle – we’ve met them all the way. Now we’ll see whether Republicans are against any agreement at all, or whether they remember how to say “yes” when the compromise on the table gives them everything they’ve demanded.

“Tonight, talks broke down over Republicans’ continued insistence on a short-term raise of the debt ceiling, which is something that President Obama, Leader Pelosi and I have been clear we would not support. A short-term extension would not provide the certainty the markets are looking for, and risks many of the same dire economic consequences that would be triggered by default itself. Speaker Boehner’s plan, no matter how he tries to dress it up, is simply a short-term plan, and is therefore a non-starter in the Senate and with the President.

“In an effort to reach a bipartisan compromise, we are putting together a $2.7 trillion deficit reduction package that meets Republicans’ two major criteria: it will include enough spending cuts to meet or exceed the amount of a debt ceiling raise through the end of 2012, and it will not include revenues. We hope Speaker Boehner will abandon his ‘my way or the highway’ approach, and join us in forging a bipartisan compromise along these lines.”

“I am deeply disappointed in the status of negotiations with my Republican colleagues. I have said repeatedly, including last night and again today, that I will not support any agreement that fails to raise the debt ceiling though the end of 2012. Anything less than that will fail to provide the certainty that the markets – and the world – are looking for, risking an immediate downgrade of America’s credit rating. This would force a tax increase on all Americans, and drain their savings funds and retirement plans as well.

“I hope that Speaker Boehner and Leader McConnell will reconsider their intransigence. Their unwillingness to compromise is pushing us to the brink of a default on the full faith and credit of the United States. We have run out of time for politics. Now is the time for cooperation.”

“I want to reaffirm my statement from last night. I will not support any short-term agreement, and neither will President Obama nor Leader Pelosi. We seek an extension of the debt ceiling through at least the end of 2012. We will not send a message of uncertainty to the world.”

“Republicans have once again proven unable to overcome their ideological opposition to ending taxpayer-funded giveaways for millionaires, corporate jet owners and oil companies. I applaud President Obama for insisting that any deal to reduce our deficit be balanced between cuts and revenues. We must avert a default at all costs, so it is time to reengage in bipartisan talks on an agreement that at least accomplishes that goal.

“I agree with President Obama that a short-term extension is unacceptable.”

Schumer: This Is A Coded Message From Norquist To GOP Hardliners Who Are Opposing Any Deal That Includes Revenues That They Should Relent In Order To Avert Default

WASHINGTON, DC—U.S. Senator Charles E. Schumer (D-NY) today called on House Republicans to heed conservative activist Grover Norquist, who today gave his permission for Republicans to let millionaire tax breaks expire without violating his anti-tax pledge.

In a major development, Norquist—the head of Americans for Tax Reform—told the Washington Post today that his group would not consider it a tax increase if the Bush tax cuts were allowed to lapse after 2012.

Schumer said this acknowledgment by Norquist is a coded message to House GOP hard-liners—who have rejected any debt reduction deal that includes revenues—that they should stand down. Schumer urged House Republicans to heed this message and relent in their deep opposition to all form of revenues.

A copy of Schumer’s remarks, as delivered, appear below. You can watch the remarks here: http://www.youtube.com/watch?v=tvogCjVaGFE

U.S. Senator Charles E. Schumer

Remarks on U.S. Senate Floor

July 21, 2011

Mr. President, as we spend the day debating the Republicans’ plan to “Cut, Cap and Kill Medicare,” a plan that is dead on arrival in the Senate, it has become obvious what the true question of the day is.

That question, Mr. President, is this: Will we, as a nation, allow ourselves to be driven into default and financial calamity by a small group of extreme right-wing ideologues in the House GOP?   It is becoming increasingly clear that this group of ideologues have grabbed the reins, and are refusing to let go, no matter who tries to pry their fingers off. It is clear this small group of narrow ideologically driven congressmen is the one thing standing in the way of raising the debt ceiling.

We are now 11 days away from defaulting on our debt, and for the last few months this small group, far outside the mainstream, has contributed nothing to efforts to reach a compromise.

The House GOP has rejected every form of compromise, from the Simpson-Bowles plan to the President’s $4 trillion grand bargain to the McConnell fallback plan to, as of yesterday, the Gang of Six framework. Instead, they have offered dangerous schemes, like the “Cut, Cap, and Kill Medicare” plan that passed the House yesterday.

Their quote-unquote plan would wreak havoc on our country’s seniors and the middle class. It’s not a serious proposal, it will never pass the Senate, and it is a waste of time.

So, while reasonable people are trying to come to a compromise, the House GOP is becoming increasingly isolated. Yesterday, for example, my colleague Senator John McCain warned the House GOP that Americans don’t want the government to shutdown, and urged them to learn the lessons of 1995. Also, close to a third of Senate Republicans have signed on to a plan that would combine major spending cuts with new revenues – a balanced approach the House GOP has sworn off.

And every day more voters are abandoning them.  As the LA Times reported this morning, “Republican resistance to compromise has turned a significant bloc of voters against them… frustrated members of their own leadership as well as establishment GOP figures.”

So the House GOP is being criticized from every corner.

And then, today, we have what must be the most significant departure to date from the House GOP’s Fantasy-land. In a major development, anti-tax crusader Grover Norquist told the Washington Post that letting the Bush tax cuts lapse would not constitute a tax hike.

This is a development the significance of which should not be underestimated.  It is a recognition from Norquist that the House Republicans are increasingly isolated, and have painted themselves into a corner. Norquist is trying to signal to the House GOP that their no-compromise position is untenable, deteriorating, and bad for their party and the country.

The House GOP is on an iceberg that is melting into the ocean, and even Grover Norquist is offering them a boat. The question is, for their own good and for the country’s good, will they take it?

I urge my colleagues in the House GOP to accept this life line – it’s time to leave default-denier island, and come back to reality.  The House GOP has painted itself into a corner even to the right of Grover Norquist.

Grover Norquist, the hall monitor when it comes to enforcing the Republican party’s anti-tax pledge, has given House Republicans a hall pass. They should use it.

This is a coded message from one of the truest believers in the Republican Party that it’s time for conservatives to step back from the brink.

Norquist has given us a potential path forward. If we decoupled the Bush tax cuts by only extending them for the middle class, and not for the millionaires and billionaires, we could have a deal that includes revenues but doesn’t violate the anti-tax pledge. Everyone wins.

This decoupling strategy is what the President and Speaker Boehner were entertaining earlier in the context of a grand bargain. But Leader Cantor and other right-wing hard-liners forced the Speaker to walk away because they feared violating the anti-tax pledge. But now a deal on decoupling has Norquist’s permission, if not his blessing. We should revisit it.

It’s time to recognize the quickest, most effective and economically sound way to reduce our deficit and debt is balanced approach that both cuts spending and raises revenue. A plan that mirrors every other successful deficit reduction deal in our nation’s history. A plan along the lines of the ones negotiated by presidents Reagan, Bush, and Clinton.

I hope my colleagues in the House GOP see the danger of the path they are going down and change course, before they take the entire country down with them.

Thank you, Mr. President.

We have 12 days left before our nation does the unthinkable: forever undermines the full faith and credit of our great country.

As members of Congress, we come from 50 states, but we serve one nation.

The American people deserve better than leaders who each stake out their own radical positions, forsaking the good of that nation. The American people expect us to find common ground no matter how difficult it may seem.

Every reasonable voice in America has warned us that defaulting on this nation’s financial obligations would not only be a blight on our reputation, but precipitate a global economic crisis.

Those warnings have come from the banking industry and the business community. They have come from our finest economists and shrewdest investors. They have come from former legislators and past policy makers from both sides of the aisle.

And they have come from reasonable people right here, in the United States Congress.

“It’s clear to me that we have to increase the debt ceiling.” That’s what John Boehner, the Republican Speaker of the House, said this spring.

He also said this:

“Not raising the debt limit would have serious, very serious, implications for the worldwide economy and jobs here in America.”

His deputy, Eric Cantor agrees. Last week he said this about the need to avert the impending crisis:

“We want to make sure that we avoid default. We want to make sure that we avoid going past August 2nd without raising the debt ceiling.”

And my Republican counterpart here in the Senate, the senior Senator from Kentucky, said he would support raising the debt limit as long as Congress used the opportunity to do “something really important” about the national deficit.

Democrats are willing to join together with our colleagues from the other side of the aisle to do, as my Republican counterpart said, “something really important.”

We have already shown our willingness to make tough decisions for the sake of finding common ground – even when it means drawing the ire of our own political party.

Unfortunately, the loudest voices from the Republican Party are not reasonable leaders, but Tea Party extremists.

Congress has days, not weeks, to reassure the markets that when this great nation issues an IOU we stand by it – that we don’t turn into deadbeats when the bills come due.

If you want to know how important this issue is, listen to the words of Ronald Reagan. This is why he said about the importance of averting this kind of default:

“The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility – two things that set us apart from much of the world.”

President Reagan took the threat of default seriously. So do reasonable Republicans in Congress today.

Yet I fear the closer we get to disaster, the further we get from a deal.

Democrats have shown they are willing to work with Republicans on any serious, reasonable plan that averts default and cuts the deficit in a balanced way.

Now it’s time for House Republicans to show they are also willing to get serious, too.

A plan that would decimate Social Security, Medicare and every other federal benefit while protecting hundreds of billions of dollars in special interest tax breaks is not a serious plan. Republicans’ so-called Cut, Cap and Balance plan doesn’t have one chance in a million of passing the Senate.

The moment for partisan games is long since passed. It is time patriots on both sides of the aisle joined hands to actually govern.

I ask, will reasonable Republicans to join us in forging a compromise that is good for the county?

REAGAN KNEW BETTER THAN TO RISK A DEFAULT …

Reagan Called Extending the Debt Limit “Necessary and Unavoidable” “This is an action that we just take to prevent the Government from defaulting on its obligations, and I have no objection whatsoever to doing so. In short, this extension of the debt limit is necessary and unavoidable.” [Remarks on Signing the Bill to Increase the Federal Debt Ceiling, 9/29/87]

·         President Reagan Said We Need to Increase the Debt Ceiling. “The business of our nation must go forward. We need the debt ceiling increase passed.” [Remarks at White House Meeting, 10/7/85]

… BUT THE PARTY OF REAGAN NOW IGNORES THOSE WARNINGS

Sen. DeMint: Republicans “Need To Get Prepared to Go Past August 2.” According to the National Review’s Robert Costa, Senator DeMint said Republicans “need to get prepared to go past Aug 2″ [Twitter, 7/20/11]

Rep. Brooks (R-AL) Scoffed At The Impact of Default. “Scoffing at claims of economic calamity if the debt ceiling isn’t raised, Rep. Mo Brooks, R-Ala., said such statements are ‘absolutely wrong’ and ‘misleading the American people.’ Brooks argued that the government would still have enough revenue to pay its creditors.” [AP, 7/20/11]

Rep. Steve King (R-IA) Denied US. Would Default If Debt Ceiling Not Raised. “America is not going to default. We’re just trying to scare people into being stampeded into a debt-ceiling increase. But we would hold our full faith in credit together regardless, unless the president had decided to punish America by refusing to pay our bills.” [ABC News Topline, 7/20/11]

Rep Renacci (R-OH) Said US. Would Not Default if Debt Ceiling Not Raised. “Renacci said without incurring more debt, the government would still have enough revenue to cover debt payments and Social Security. ‘We will not default on our debt,’ he said. ‘So really the question becomes, ‘what don’t we pay?’’” [Canton Repository, 7/20/11]

THEY SHOULD REALIZE THE DIRE CONSEQUENCES OF A DEFAULT:

DPCC REPORT: IF GOP FORCES A DEFAULT, EVERY FAMILY WILL PAY THE PRICE

POLITICO: DEFAULT COULD ‘SINK THE WHOLE BOAT’

REUTERS: U.S. DEFAULT COULD PROMPT NEW RECESSION: STUDY

THE HILL: KEY ECONOMIST: FAILURE TO RAISE DEBT CEILING WILL CAUSE SERIOUS DAMAGE

Default Could Cost Raise Interest and Mortgage Rates And Cost Economy 800,000 Jobs Every Year. “A serious and extended debt ceiling breach could lead big U.S. bond investors such as China to demand higher interest rates, which would in turn mean higher borrowing rates for businesses and consumers.  That would inevitably lead to slower economic growth, fewer jobs, higher mortgage rates and perhaps a prolonged double-dip recession — or even a depression.  The long-term damage of even a slight increase in interest rates could be enormous. It could cause a 1 percent increase in interest rates that economists said could shave nearly 1 percent off economic growth and cost 800,000 jobs every year.” [Politico, 7/18/11]

Reagan Called Extending the Debt Limit “Necessary and Unavoidable” “The first provision extends the Federal Government’s authority to borrow funds. This is an action that we just take to prevent the Government from defaulting on its obligations, and I have no objection whatsoever to doing so. In short, this extension of the debt limit is necessary and unavoidable.” [Remarks on Signing the Bill to Increase the Federal Debt Ceiling, 9/29/87]

·         President Reagan Said We Need to Increase the Debt Ceiling. “The business of our nation must go forward. We need the debt ceiling increase passed.” [Remarks at White House Meeting, 10/7/85]

Plurality of Americans Want to Raise the Debt Limit. In a NBC News/WSJ poll a plurality (38 percent) of Americans said the debt ceiling should be raised, a sharp reversal from June, when a plurality (39 percent to 28 percent) opposed that move.  [MSNBC, 7/19/11]

Former GOP Senators Howard Baker and Nancy Kassenbaum: We Need To Avoid Another Economic “Earthquake” From Default. “The prospect of default on the sovereign credit of the United States of America is so frightening, so significant, so sinister and so far-reaching in its impact that we can’t fail to deal with this issue. … the question is not really the debt limit but, rather, the fundamental commitment to honor our obligations. It’s about recognizing that the last thing a tenuous and fragile recovery needs is another earthquake, a wave of fear in the private sector that further inhibits job creation.” [Washington Post, 7/17/11]

Fed Chairman Bernanke: Default “Would Throw The Financial System Potentially Into Chaos.” ”Federal Reserve Chairman Ben Bernanke certainly drew a dire picture in testimony before the Senate Banking Committee on Thursday. He said a default would be a ‘calamitous outcome’ and ‘create a severe financial shock.’ The global financial system relies on Treasuries, backed by the world’s largest economy and long considered one of the world’s safest bets. ‘A default on those securities would throw the financial system potentially into chaos,’ Bernanke said.” [AP, 7/17/11]

235 Economists Including Six Nobel Laureates: Failure To Raise The Debt Ceiling “Could Push The United States Back Into Recession” ”We, the undersigned economists, urge Congress to raise the federal debt limit immediately and without attaching drastic and potentially dangerous reductions in federal spending. Not doing so promptly could have a substantial negative impact on economic growth at a time when the economy looks a bit shaky. In a worst case, it could push the United States back into recession.” [Economists’ Letter to Congress, 6/29/11]

Former Bush Treasury Official: An “Unprecedented” Failure To Raise The Debt Ceiling Could Push The Economy Back Into A Recession. Former Undersecretary of the Treasury for President George H.W. Bush Jerome Powell, “who spoke to House Republicans on Friday, said that if no deal is reached by the time the Treasury needs to pay interest and principal on its outstanding debt, the government would struggle to pay for much else — a spectacle that is ‘completely unprecedented’ and could spook investors. ‘So we service the debt and then we don’t service 50 percent of our remaining obligations, [such as education, social safety net and other programs] and that 50 percent is what the public sees,’ Powell said. ‘This gigantic cut in government spending is going to be a major negative shock to the economy, and it could push the economy back into recession.’” [Roll Call, 7/18/11]

Today the House will consider legislation that would force the nation to default on our financial obligations for the first time in history unless Congress adopts a radical new constitutional amendment.

That amendment would impose arbitrary, reckless budget caps that would – without a doubt – force massive cuts to Medicare, Social Security and other crucial benefits. At the same time, it would constitutionally protect wasteful loopholes and tax breaks for millionaires and billionaires.

To meet an arbitrary spending cap frozen at 18 percent of Gross Domestic Product, it would shrink benefits and services back to levels not seen since 1966. In 1966, Medicare was one year old and there were 100 million fewer people in this country.

For those who think rewinding 45 years is a good thing, consider how much America has changed since 1966. For example, life expectancy is 9 years longer today than it was 45 years ago.

Medicare has allowed Americans to live longer, healthier lives. This legislation would roll back that progress.

And it would enshrine in the Constitution a set of priorities so backward, even Republican advisors to Presidents Ronald Reagan and George W. Bush have called it unwise.

In the first decade alone, it would mean more than $3,000 a year in cuts to each senior’s Social Security check. It would slash our social safety net, decimating Medicaid and cutting Medicare benefits by $2,500 for every senior.

In fact, the non-partisan Congressional Budget Office says that within 25 years, it will slash government benefits and services in half. That includes Social Security, Medicare, Medicaid, veterans’ benefits and every other government service, no matter how essential.

Yet it would make it almost impossible to end even the most wasteful tax breaks and loopholes already in place, such as handouts to oil companies making record profits, corporations that ship jobs overseas, and rich people who buy yachts or and private jets. It would require a two-thirds majority in both houses of Congress to raise even a penny of new revenue.

Meanwhile, it does absolutely nothing to protect our economy from the kind of recession from which we are beginning to recover. In fact, if the economy wasn’t already in a recession, experts say this legislation would quickly produce one.

Bruce Bartlett, an economic advisor to President Reagan and a Treasury official under President Bush, said the kind of rapid spending cuts called for in this House legislation would “unquestionably throw the economy into recession.”

This legislation goes beyond the draconian budget that Republicans passed earlier this year. That budget would have ended Medicare as we know it. It would also have cut clean energy by 70%, axed education funding and cost hundreds of thousands of private-sector jobs.

This is worse. It would attack all the same programs, but its cuts would be deeper. And it would slash Social Security as well.

This legislation is so restrictive, Republicans’ own budget – the budget they passed this year – would not meet its standards.

It is so restrictive, not one year of either the George W. Bush or Ronald Reagan administrations would meet its standards.

Of the last 30 years, the only two years that would make the cut were during the Clinton administration.

As the Washington Post said, “Every single Senate Republican has endorsed a constitutional amendment that would’ve made Ronald Reagan’s fiscal policy unconstitutional. That’s how far to the right the modern GOP has swung.”

Bruce Bartlett, the economic advisor to Reagan, said this about the legislation:

“This is quite possibly the stupidest constitutional amendment I think I have ever seen. It looks like it was drafted by a couple of interns on the back of a napkin.”

And that, in my opinion, is being awfully hard on the interns.

Bill Hoagland, a budget advisor to Republican Congressional leaders for 25 years, described it best when he labeled this legislation a “misleading political cheap shot.”

A balanced budget is something we can all get behind. But this legislation isn’t really about balancing the budget. It’s about scoring political points.

But based on 30 years of evidence and Republicans’ own measuring stick, the stunt falls flat.

After all, who do you think helped President Clinton balance the budget during the only two years of the last 30 that actually lived up to the restrictive rules outlined in this legislation? It was Democrats in Congress.

Today, Democrats are trying to rein in spending again. We’re also trying to avert a catastrophic default on our nation’s financial obligations.

Republicans are the ones standing in the way of a deal to avert default, refusing to move an inch despite our offers to cut trillions from the deficit.

As conservative columnist Ross Douthat wrote in the New York Times yesterday, we could already be on the way to a deal if, “more Republicans had only recognized that sometimes a well-chosen concession can be the better part of valor.”

Rep. Todd Rokita (R-IN) “I Am Not Worried About Moody’s.” Rokita said, “I am not as worried about Moody’s or anyone else as this economy gets worse.” [ABC NEWS Topline, 7/18/11]

Rep. Todd Rokita  Doesn’t Believe the US Will Default if We Don’t Raise the Debt Ceiling.

QUESTION: Is August 2^nd an important date in your mind?

Rep. Rokita: Of course. But I don’t take the premise that we’re going to default on our obligations. [ABC NEWS Topline, 7/18/11]

THEY SHOULD REALIZE THE DIRE CONSEQUENCES OF A DEFAULT:

POLITICO: DEFAULT COULD ‘SINK THE WHOLE BOAT’

REUTERS: U.S. DEFAULT COULD PROMPT NEW RECESSION: STUDY

THE HILL: KEY ECONOMIST: FAILURE TO RAISE DEBT CEILING WILL CAUSE SERIOUS DAMAGE

Default Could Cost Raise Interest and Mortgage Rates And Cost Economy 800,000 Jobs Every Year. “A serious and extended debt ceiling breach could lead big U.S. bond investors such as China to demand higher interest rates, which would in turn mean higher borrowing rates for businesses and consumers.  That would inevitably lead to slower economic growth, fewer jobs, higher mortgage rates and perhaps a prolonged double-dip recession — or even a depression.  The long-term damage of even a slight increase in interest rates could be enormous. It could cause a 1 percent increase in interest rates that economists said could shave nearly 1 percent off economic growth and cost 800,000 jobs every year.” [Politico, 7/18/11]

Warren Buffett Called Risking Default Playing With Fire. “On the other hand, you’re playing with fire when you don’t need to play with fire. We don’t need to tell the rest of the world that anytime people in Congress start throwing a tantrum that we’re not going to pay our bills.” [CNBC, 7/7/11]

Former GOP Senators Howard Baker and Nancy Kassenbaum: We Need To Avoid Another Economic “Earthquake” From Default. “The prospect of default on the sovereign credit of the United States of America is so frightening, so significant, so sinister and so far-reaching in its impact that we can’t fail to deal with this issue. … the question is not really the debt limit but, rather, the fundamental commitment to honor our obligations. It’s about recognizing that the last thing a tenuous and fragile recovery needs is another earthquake, a wave of fear in the private sector that further inhibits job creation.” [Washington Post, 7/17/11]

Fed Chairman Bernanke: Default “Would Throw The Financial System Potentially Into Chaos.” ”Federal Reserve Chairman Ben Bernanke certainly drew a dire picture in testimony before the Senate Banking Committee on Thursday. He said a default would be a ‘calamitous outcome’ and ‘create a severe financial shock.’ The global financial system relies on Treasuries, backed by the world’s largest economy and long considered one of the world’s safest bets. ‘A default on those securities would throw the financial system potentially into chaos,’ Bernanke said.” [AP, 7/17/11]

The Head of the IMF Said Default Would Be “A Real Shock,”  “Bad News for the U.S. Economy.” On ABC’s This Week, IMF Head Christine Lagarde Said “It would be a real shock, and it would be bad news for the U.S. economy. So I would hope that there is enough bipartisan intelligence and understanding of the challenge that is ahead of the United States, but also of the rest of the world.” [This Week, 7/10/11]

Moody’s Economist Mark Zandi: Failure To Raise the Debt Ceiling Would Throw The US into a Recession. At a Breakfast, Moody’s Economist Mark Zandi said, ““Even if Congress and the administration reverses themselves days later I think the damage will have been serious and we’ll probably be thrown into a recession.” [The Hill, 6/28/11]

235 Economists Including Six Nobel Laureates: Failure To Raise The Debt Ceiling “Could Push The United States Back Into Recession” ”We, the undersigned economists, urge Congress to raise the federal debt limit immediately and without attaching drastic and potentially dangerous reductions in federal spending. Not doing so promptly could have a substantial negative impact on economic growth at a time when the economy looks a bit shaky. In a worst case, it could push the United States back into recession.” [Economists’ Letter to Congress, 6/29/11]

Former Bush Treasury Official: An “Unprecedented” Failure To Raise The Debt Ceiling Could Push The Economy Back Into A Recession. Former Undersecretary of the Treasury for President George H.W. Bush Jerome Powell, “who spoke to House Republicans on Friday, said that if no deal is reached by the time the Treasury needs to pay interest and principal on its outstanding debt, the government would struggle to pay for much else — a spectacle that is ‘completely unprecedented’ and could spook investors. ‘So we service the debt and then we don’t service 50 percent of our remaining obligations, [such as education, social safety net and other programs] and that 50 percent is what the public sees,’ Powell said. ‘This gigantic cut in government spending is going to be a major negative shock to the economy, and it could push the economy back into recession.’” [Roll Call, 7/18/11]

DPCC REPORT: IF GOP FORCES A DEFAULT, EVERY FAMILY WILL PAY THE PRICE

 
Washington, D.C.– Nevada Senator Harry Reid made the following remarks today on the Senate floor regarding Senate Democrats’ meeting last week with Treasury Secretary Tim Geithner. Below are his remarks as prepared for delivery:

Senate Democrats sat down with Treasury Secretary Tim Geithner, and he painted a picture of what our world will look like if Republicans in Congress force this nation for the first time in its history to default on its financial obligations.

The picture was grim. This is how he described the state of our government if Congress allows this unprecedented default: “lights out.”

He said default would result in a complete “loss of capacity to function as a government.”

Even those who believe government should be small enough to drown in a bathtub have to admit that a total shutdown of even the most basic and essential functions of government is scary.

It wouldn’t be good for the American people. And it certainly wouldn’t be good for our economy.

The Senate has no more important task than making sure the United States continues to pay our bills for pre-existing obligations like Social Security.

To ensure that we meet this responsibility, the Senate will stay in session every day – including Saturdays and Sundays – until Congress passes legislation that prevents the United States from defaulting on our obligations.

Geithner described how the 80 million checks cut by the Treasury every day could simply stop coming. The federal government would, in effect, go dark.

Paychecks for troops in Afghanistan and Iraq and bases around the world could stop. FAA towers could shut down. So could the FBI and the CIA. Border crossings could close. Safety inspections of the food Americans eat and the cargo that enters our ports could halt. Literally every function of government could cease.

There would be no discussion of which operations and personnel were essential. All the payments would likely stop.

Some have said we could prioritize which bills to pay. Even if that wouldn’t irreparably damage the nation’s credit and our reputation in the global community – which it would – it is also a complete fiction.

Our government won’t even be able to cover the bills due on August 3. It will simply run out of money. And because we’ll be in default and our credit rating trashed, we won’t be able to borrow the money to keep running even if we wanted to.

That’s the picture Secretary Geithner painted. Like I said, it’s grim.

Many of my Republican colleagues understand this fact. They know what is at stake.

But the irresponsible Republicans who say default would not be an unmitigated disaster for this country either don’t know what they’re talking about, or are twisting the truth for political gain.

Americans have gotten this message. Seventy-one percent of them disapprove of the way Republicans have used this crisis to force an ideological agenda. Even a majority of Republicans disapprove of their unreasonable refusal to compromise, which puts our entire nation at risk

Those who say this crisis would be a blip on the radar are wrong. Default would be a plague that would haunt our nation for years to come. Our credit rating would take years to rebuild. The country would never be the same.

Some will say this is an exaggeration, but it is not. This is what Treasury Secretary Geithner told us. And it’s what business leaders, economists, rating agencies and bankers have all told us as well.

If this country defaults on its obligations, Geithner said, it will be “much worse than the Great Depression.”

And it would make the massive financial crisis of 2008 look mild.

“It will make what we just went through look like a quaint little crisis,” Geithner said.

That “quaint little crisis” led to the loss of almost 5 million American jobs. It caused our banking system to nearly collapse. More than $34 trillion in wealth was destroyed in less than two years. The ripples were felt throughout this nation and around the world.

The average American family lost $100,000 on its home and stock portfolio alone. And 400,000 families were plunged into poverty.

That crisis was minor, Geithner said, compared to the potential fallout from a U.S. default.

The leading business and economic voices of our time have said it again and again: the risks of default are unthinkable. It would be a catastrophe.

Secretary Geithner also said we’re running out of time to avoid this iceberg. The rating agencies have already placed our AAA credit rating under review, and could downgrade us at any moment.

This is what Treasury Secretary Tim Geithner said: “The eyes of the country are on us. The eyes of the world are on us, and we need to make sure we stand together and send a definitive signal that we’re going to take the steps necessary to avoid default.”

I ask, what will it take to get my Republican colleagues to wake up to the fact that they are playing a game of political chicken with the entire global economy? They must wake up soon.

“The Senate has no more important task than making sure the United States does not fail to pay our bills for pre-existing obligations like Social Security for the first time in our history. To ensure that we meet this responsibility, the Senate will stay in session every day, including Saturdays and Sundays,  from now until Congress passes legislation that prevents the United States from defaulting on our obligations.”

Jeff Schapiro
July 17, 2011

Virginia’s young gun apparently shot himself in the foot.

Eric Cantor this past week had an opportunity to define himself for an audience beyond the Beltway as more than a rigid conservative with one word in his vocabulary: no. Instead, the U.S. House majority leader, seen as a deal breaker rather than a deal maker, may have only trivialized himself.

Having walked out of Joe Biden-led budget-and-deficit talks; undercut John Boehner on a big fix and engaged Barack Obama in verbal fisticuffs over the fine print of a possible deal, Cantor looked more the insipid pill than the professional politician. It was, David Weigel wrote for the online publication Slate, the “official Newt-ification of Eric Cantor.”

Cantor’s avuncular, bow-tied mentor-predecessor, Tom Bliley, isn’t sure how his protégé’s shtick is playing outside Washington, crush of crummy press notwithstanding. “He’s a hero to his conference and the right,” says Bliley. “But how far it would go with the independents — I don’t know. The jury’s still out on that.”

Events of the past week may have gone a long way toward casting Cantor the wrong way. Cantor wants to be seen as serious-minded. A trunk-load of degrees, stints in law and finance and a business-fed fundraising machine say as much. But his hissing match with Obama and spending cuts-only approach to budget-balancing strikes Republican plutocrats in his hometown as evidence that Cantor is serious all right — about politics, not governing.

That’s probably why Cantor, in a hurry-up effort at damage control, told The Associated Press, a news service with the widest possible reach, that he meant no disrespect to Obama. Cantor also attempted a show of solidarity with Boehner at a joint appearance that was more PDA — public display of affection — than news conference.

Bliley, a former Commerce Committee chairman-turned-lobbyist who has schmoozed Cantor on behalf of convenience store owners over a cap on debit card swipe fees, dismisses talk of a Cantor challenge to Boehner for the speakership. Cantor — as he did for Bliley’s seat, biding his time as a Henrico delegate in the General Assembly — will “wait his turn,” says Bliley.

But could events mean that Cantor, labeled the “shadow speaker” by New York magazine, won’t have to wait very long? “I don’t want to get into that speculation,” says Bliley. “That’s like asking me what’s going to happen in six months.”

In politics, that’s many lifetimes. And if one flashed before Cantor’s eyes as he was methodically demonized the first part of the week, another rolled out at week’s end, as he and Boehner conferred privately with the treasury secretary, Timothy Geithner, and White House chief of staff Bill Daley.

The point being that Cantor — his literal Elvis-like lip curl yielding to a figurative fat lip — remains relevant if only because of his rank: second-in-command of a House Republican Conference infused by tea partiers, who, despite Cantor’s no-no-a-thousand-times-no stance on new taxes, know that his record on fiscal issues is, at best, mixed. He previously voted to raise the debt ceiling, backed the deficit-financed Medicare drug benefit for seniors, two unpaid-for wars, the bank bailout and angled for Obama stimulus bucks for high-speed rail.

Having outmaneuvered Cantor for now, the president — alternately the smooth-talking conciliator and punch-in-the-nose Chicago pol — appears to be practicing an old-school rule: after stranding your adversary on a limb, you have to help him crawl back in.

• A Default Would Cost the Economy Hundreds of Thousands of Lost Jobs Every Year. “According to an analysis by the Federal Reserve, a one-percentage point rise in Treasury yields would reduce economic growth by 0.8 percentage points. That number sounds small, but it is not. Economists tell us it would translate into hundreds of thousands of lost jobs every year.” [Op-Ed by Tom Donohue in USA Today, 7/13/11 ]

• For Every 1 Percent Change in GDP, The U.S. Would Shed 640,000 Jobs. “For every 1% change in GDP growth, there is an estimated 0.46% change in total employment, according to economist William Seyfried. Using his estimation, the U.S. would shed 640,000 jobs.” [Third Way, May 2011 ]

• Bernanke: Default Will Cost Jobs. According to Federal Reserve Chairman Ben Bernanke “the economy may be thrown into reverse and employers would start cutting jobs if Congress fails to raise the nation’s legal borrowing authority.” [Bloomberg, 7/13/11 ]

The Treasury Would Have to Pick Winners and Losers in “Prioritizing” Payments.

• In the Event of a Default, The U.S. Would Have to Defer Paying 44 Percent of Its Obligations. According to the Bipartisan Policy Center, the U.S. has $306.7 billion in payment obligations due August 2011 and will take in an estimated $172.4 billion in revenue for the month. 44 percent of U.S. government bills would go unpaid if the federal government fails to raise the debt ceiling by the August 2 deadline. [Bipartisan Policy Center, 7/12/11 ]

• In the Event of a Default, The Treasury Department Would Have to Decide Who to Pay. According to Jay Powell of the Bipartisan Policy Center and former Under Secretary of the Treasury for Finance under President George H. W. Bush, “Treasury would exhaust all inflows just by paying six major items: interest, Medicare, Medicaid, Social Security, unemployment insurance and defense vendors. Without cutting from these six, there would be no money for entire departments such as Justice, Labor and Commerce among many others, or for veterans’ benefits, IRS refunds, military active duty pay, federal salaries and benefits, special education, Pell Grants for college students or food and rent payments for the poor.” [Bipartisan Policy Center, 7/12/11 ]

The Treasury Would Have to Pay Higher Interest Rates on U.S. Debt To Attract New Investors.

• If the Debt Ceiling is Not Raised by August 2nd, All Three Ratings Agencies Will Put the U.S. on Watch for a Downgrade, at a Minimum.
  • Moody’s Investors Service: U.S. Rating Placed Under Review. “The United States may lose its top-notch credit rating in the next few weeks if lawmakers fail to increase the country’s debt ceiling, forcing the government to miss debt payments, Moody’s Investors Service warned on Wednesday. Moody’s is the first of the big-three rating agencies to place the United States’ Aaa rating on review for a possible downgrade, which means it is close to cutting its rating.” [Reuters, 7/13/11 ]

• Even Without a Downgrade, It is Likely That Rates Would Increase. According to the Bipartisan Policy Center, it is possible that the U.S. Treasury could lose market access during such an unprecedented event and default. [Bipartisan Policy Center, 7/12/11 ]

Failure to Raise Debt Limit Would Deepen Our Deficit By $75 Billion Each Year.

• J.P. Morgan: Default Could Cause a Sustained 50 basis point Increase, Costing Taxpayers an Additional $75 Billion a Year. According to a letter by J.P. Morgan Managing Director Matthew Zames to Treasury Secretary Geithner, “[a] sustained 50 basis point increase in Treasury rates would eventually cost U.S. taxpayers an additional $75 billion each year.” [Letter by J.P. Morgan to Secretary Geither, 4/25/11 ]

While American families are living paycheck to paycheck, Republicans are toying with defaulting on our nation’s debt by opposing every deficit reduction compromise that is offered to them. Should the nation default on its debt, or even come close to default, the consequences would be catastrophic for American families. The cost of owning a home, buying food, filling a gas tank, sending children to college and buying a car will become even more expensive, squeezing already tight family budgets. And the impact will be felt not just immediately, but for generations to come.

Default Would Permanently Raise Interest Rates, Driving Up Costs for American Families

Analysts recently estimated that even a technical default - a brief delay in the payment of interest on Treasury debt - could have significant and long-lasting effects. Based on an analysis of the debt ceiling and government shutdown debate in 1995 and financial crisis in 2008, J.P. Morgan estimated that interest rates on Treasury bonds could rise 75 or even 100 basis points. Between mortgages and credit cards alone, a 75 basis point increase translates into an additional $10 billion in consumer borrowing costs every year.

• Mortgage Payments Will Increase By Over $1,000 for the Average Family. The average monthly mortgage payment in the United States is approximately $1,022. A 75 basis point increase in rates would raise this by roughly $85, or $1,020 per year. There are approximately 5 million new mortgage originations each year. These borrowers would be paying a total of $5 billion per year of additional interest. In addition, one study found that an interest rate hike caused by default would immediately add more than $19,000 to the lifetime cost of a 30-year fixed rate mortgage on a median home loan of $172,000 for an existing home. [Based on Analysis by J.P. Morgan; Third Way, May 2011 ]

• Credit Card Interest Would Increase By $250 For the Average Family. Credit card interest payments in the U.S. total approximately $94 billion per year. A 75 basis point increase in rates would increase this by $5 billion to $99 billion. In 2009, nearly half of Americans had credit card debt, with a median balance of $3,300. That means the average family with credit card debt will pay nearly $250 more in interest. [Based on Analysis by J.P. Morgan; Federal Reserve Board]

Default Would Weaken the Dollar, Driving Up Price Families Pay for Utilities, Food and Gas Analysts estimate that a technical default could cause investors to lose faith in the dollar, causing the dollar to fall between 5 and 10 percent against competing currencies. This could have a direct impact on household expenses such as gas, food and utilities.

• Families Could Pay An Additional $182 Per Year on Utilities. According to a 2009 Labor Department survey, American families spend on average $3,645 a year on utilities ($304 a month). A 5 percent decline in the dollar could cost Americans an extra $182 per year on average. [ Bureau of Labor Statistics ; Based on Analysis by J.P. Morgan]

• Families Could Pay An Additional $318 Per Year on Food. According to the same Labor Department survey, Americans spend on average $6,372 a year on food. A 5 percent decline in the dollar could force families to pay an additional $318 a year. [ Bureau of Labor Statistics ; Based on Analysis by J.P. Morgan]

• Families Could Pay Roughly $100 More Per Year More on Gas. According to a recent Labor Department survey, Americans spend on average $1,986 a year on gasoline and motor oil. A 5 percent decline in the dollar could force families to pay an additional $99 a year. [ Bureau of Labor Statistics ; Based on Analysis by J.P. Morgan]

Default Would Roil the Financial Markets, Causing Huge Losses in Retirement Accounts Economists agree a technical default would have disastrous consequences for families and their retirement accounts. Gains in 401(k) accounts achieved during 2010 and 2009 could be wiped out.

• Families Could Lose Thousands of Dollars In Their Retirement Savings. “The financial services firm Janney Montgomery Scott estimates that default would cause the S&P 500 index to lose 6.3% in value in three months.10 J.P. Morgan estimates the loss to be closer to 9%.” “According to the Employee Benefit Research Institute, the typical 401K of an investor in their 50s at the end of 2009 had $139,932 in their portfolio. A 6.3% loss in the S&P 500 would cost this portfolio $8,816.” [Third Way Report, May 2001 ]

• Families with 401 (k)s Could Lose All Gains Made in 2010 and Most Gains from 2009. “Reaching the debt ceiling will, in all likelihood, trigger a sharp fall in the stock market, which also will likely reduce employment. The drop in stock prices will have an immediate effect on the economy, but also on families. Families with 401(k)s would likely lose all the gains they have made in 2010 and much of their gains in 2009, moving them further below where they were at the end of 2007 after the stock market fell sharply.6 This is magnified by the fact that the very first of the baby boom generation-the largest generation thus far in U.S. history, and the first generation where a majority (near 60 percent) will retire with 401(k)s rather than pensions-is now retiring.” [Testimony by Heather Boushey before Democratic Policy and Steering Committee, 7/7/11 ]

Senators Chuck Schumer (NY), Ben Cardin (MD) , Mark Begich (AK) and Chris Coons (DE) warned this morning of a calamitous outcome if the GOP forces the U.S. to default on its debt for the first time in history. The chart below illustrates just how difficult it would be for our country to pay its bills (explanation of chart below).

Download full-size PDF version of these charts.

Senator Schumer, explaining the stakes as shown above, said –

“We are definitely going to want to pay Social Security benefits, and that takes 50 billion dollars off the table.” [He took the Social Security tile off the obligations chart and placed it onto revenue chart]

And we have to make sure America’s seniors continue to get healthcare so we need to pay for Medicare and Medicaid. There goes another $50 billion [He took the Medicare/Medicaid chart off of the obligations chart and placed it onto the revenue chart]

So now we have 72 billion left.  We have to pay our troops, keep our promise to America’s veterans, and fund our  defense priorities. That is going to take us almost up to the limit.  [He then took the troops, veterans, and defense tile off of the obligations chart and placed it on the revenue chart]

And we still have the interest on our debt, and that takes up most of the difference. [He then took the interest on treasury securities tile off of the obligations chart and placed it on the revenue chart]

We wouldn’t have a dime for Student loans, the FBI, Cancer Research, IRS refunds, or border patrol agents… What from this list are you going to remove to fund these jobs that keep America safe?

Do you want to stop paying hundreds of thousands of troops? [He removed the troops tile]. Do you want to stop paying 60 million social security recipients? [He removed the social security tile] That is the choice, and the consequences we face if we don’t raise the debt limit.”

As Senator Coons put it, “This is the most predictable financial disaster in our history. Let’s avoid it.”

Washington, D.C.– Nevada Senator Harry Reid made the following remarks today on the Senate floor on Democrats’ efforts to cut the deficit and avert a default crisis. Below are his remarks as prepared for delivery:

There are some in the Republican Party who will not listen to the truth no matter who speaks it.

This is my opinion: if we allow this nation for the first time in its history to default on our national obligations, it will be not only a black mark on our reputation but also a massive financial disaster that will sweep the world into global depression.

But it is not my opinion alone. I have come to that belief by listening to the most respected voices in the business community. Default, they say, is a “risk our country must not take.”

And they’re not the only ones who believe that’s true.

The most respected bankers have also said it. JP Morgan Chase CEO Jamie Dimon said default would be “catastrophic.”

Investors have said it. Bill Gross, one of the world’s largest mutual fund managers, sent us a warning yesterday. He said “There should be no question at all. The debt ceiling must be raised and not be held hostage by budget negotiations. Don’t mess with the debt ceiling, Washington.”

Economists have also said it. Ben Bernanke, appointed by President Bush as chairman of the Federal Reserve, has said default would be a “major crisis” that would send “shockwaves” through the world financial markets. And yesterday he said failure to avert default would mean “huge financial calamity.”

Even other Republicans have said it. This is what Speaker Boehner said in April: “Not raising the debt limit would have serious – very serious – implications for the worldwide economy and jobs here in America.”

And – perhaps most telling of all – all three credit rating agencies have already sent warning shots across our bow.

Last night Moody’s cautioned us that America’s AAA rating was already under review for downgrade – with three weeks left until we miss our first payment. They cited the “rising possibility” that we will default. And they said that we could lose this crucial rating – which saves every American money every day – even before we miss a payment.

Standard & Poor’s has told Congress and business leaders that even if the U.S. keeps paying creditors, but delays Social Security checks or veterans benefits, it may cut our rating.

And Fitch Ratings has said a default would “threaten the still fragile financial stability in the US and the world as a whole.”

So why are some Republicans in Congress still saying that a first-ever default on our nation’s financial obligations would be no big deal?

When every financial expert, investor, business leader and banker in the country – and even every reasonable member of your own political party – is telling you the consequence of default would be catastrophe, it’s time to start listening.

Why? Because default won’t just roil the financial markets, push interest rates higher and tank the stock markets. It will affect every American’s wallet as well. Here is what will happen.

Social Security checks and veterans benefits and paychecks to our troops would stop. Some of the most vulnerable Americans would be placed at risk. Our promise to the men and women who protected this nation so bravely – and those who protect it today – would be broken.

Payments on our national debt would stop. American investments and retirement accounts could be decimated. Millions of Americans could lose their jobs.

Interest rates would rise, not only for the government, but for ordinary Americans as well. Those Americans will pay more for their mortgages. They will pay more to use a credit card or buy a car or finance a university education.

They’ll even pay more for their electric bills, groceries and gas. The spike in interest rates and the damage to the U.S. dollar alone could cost the average American family more than $1,500.

It would be the most serious financial crisis this country has ever faced. And it would come at a time when our economy can least afford it.

And in the long run, it would wind up costing the government trillions – a fact Republicans shouting about the debt fail to mention. Every 1 percent increase in interest rates will cost the nation $1.3 trillion.

With so much at stake, even Speaker Boehner and Minority Leader McConnell seem to understand the seriousness of this situation. They’re willing to negotiate in good faith.

Meanwhile, House Majority Leader Eric Cantor has shown that he’s shouldn’t even be at the table. And Republicans agree.

One House Republican told Politico: “He lost a lot of credibility when he walked away from the table … It was childish.”

Another Republican said Cantor is putting himself first. He said this: “He’s all about Eric.”

The time for personal gain and political posturing is over. It’s time to put our economy and our country first.

The risks we face are simply too great. But don’t take my word for it. More than 300 respected business leaders wrote to Congress this week to make it clear how serious this crisis really is.

“A great nation — like a great company — has to be relied upon to pay its debts when they become due,” they said. “This is a Main Street not Wall Street issue.”

Democrats are listening. It’s time for the irresponsible voices in the Republican Party that continue to deny the truth of this crisis to start listening as well.

Washington, D.C.– Nevada Senator Harry Reid made the following remarks today on Democrats’ efforts to cut the deficit and avert a catastrophic default crisis. Below are his remarks as prepared for delivery:

Sometimes it can be hard to find common ground in Washington. But there is one thing on which Republicans and Democrats agree: it is absolutely necessary that Congress prevent a catastrophic default on the nation’s debt that would put our economy in grave danger.

I have said it. So have many of my Republican colleagues. And now the business community is shouting it.

This week, business leaders wrote to Congress and the White House to ask us, please, to put our differences aside and avert a default crisis before it’s too late. Literally hundreds of CEOs – including executives from some of the nation’s largest companies and most respected business groups – signed the letter.

“This is a risk our country must not take,” they wrote.

They said if we don’t reach a deal soon, the stock market will be in “disarray.” We all know we can’t afford that right now. Our economy is already struggling to stay on a course to recovery.

U.S. Chamber of Commerce President Tom Donahue, who signed the letter, also said this week that a default would have “dire consequences for our economy, our markets, and Main Street Americans.”

Business leaders are begging us to do the right thing, and do it quickly.

That’s why I was shocked to hear the Speaker of the House say yesterday that averting a default crisis was President Obama’s problem.

That’s not what he said a few months ago when he urged us to “deal with this like adults.” And it wasn’t what he said when President George W. Bush raised the debt ceiling seven times, increasing the limit by $4 trillion.

In fact, when the Speaker voted to increase the debt limit by nearly $1 trillion in 2003, he didn’t demand it be accompanied by massive spending cuts. Instead, a Republican Congress approved hundreds of billions of dollars in tax breaks for the wealthy. They were paid for with borrowed money and contributed to our massive debt.

Congress has raised the debt limit 89 times since it was created in 1939, two-thirds of those times under Republican presidents.

Ronald Reagan asked Congress to raise the limit 18 times, twice as many as any other president. Republicans never claimed then that the issue was the President’s problem alone.

For Republicans to claim now that the deficit is a problem only for the President or Democrats in Congress is just plain irresponsible.

It’s even more irresponsible considering Bush, with the help of Republicans in Congress, nearly doubled the debt while he was President. That’s more than any other president in history.

This problem belongs to all of us in Congress. And it will take all of us working together – political party aside – to make a deal possible.

Theodore Hesburgh, President of the University of Notre Dame for 35 years, said this about making difficult decisions: “You don’t make decisions because they are easy; you don’t make them because they are cheap; you don’t make them because they’re popular; you make them because they’re right.”

It is time for Republicans and Democrats to get together and do what’s right for this nation.

I am glad to hear that the Republican Leader has come forward with a backstop proposal to address the debt limit. I am still studying it and discussing it with Senators.

But I am heartened by what I read. This is a serious proposal. And I commend the Republican Leader for coming forward.

I believe that the Republican Leader’s proposal, combined with ideas he and I have been discussing to force a vote on deficit reduction proposals, could go a long way toward resolving the impasse in which we find ourselves.

In the meantime, this afternoon, Congressional Leadership will again meet with the President and his senior advisors to try to advance our discussions.

Democrats realize finding common ground isn’t always easy. If it were, we would have hammered out an agreement long ago. But reducing the deficit and getting our fiscal house in order is too important to quit when the going gets tough.

I am confident that we will find a way to get this done. We simply cannot allow our country for the first time in its history to fail to pay its bills. The risks to our economy are too great not to.

America’s business leaders put it this way: “Now is the time for our political leaders to put aside partisan differences and act in the nation’s best interests. It is time to pull together rather than pull apart.”

I urge my Republican colleagues to remember this: we are not opponents squaring off across the field. We are all on the same team, with the same goal in mind. But if the catcher doesn’t take the field, it doesn’t matter how good the pitcher’s fastball is. The team doesn’t stand a chance.

It’s time each and every one of us in Congress remembered that. In the words of American business leaders, “It’s time to pull together rather than pull apart.”

MCCONNELL CONTINUES TO STICK TO HIS GUNS ON REVENUE…

McConnell “Slams Shut” The Door on Revenues. “Even as Cantor cracked the door open, however, Senate Minority Leader Mitch McConnell (Ky.) slammed it shut, reiterating the long-standing Republican position that policymakers should consider eliminating tax breaks only as part of a comprehensive effort to rewrite the code and lower income tax rates.”  [Washington Post, 7/7/11]

McConnell Said No to All Forms of Revenue. “President Barack Obama stepped back into deficit-reduction talks Monday, only to be greeted by a double-barrel blast from Senate Republican leader Mitch McConnell, who peremptorily rejected any deal that would include the added revenues Obama wants together with spending cuts. McConnell’s meeting with the president stretched more than an hour, but even before the two men sat down together, the Kentucky Republican had delivered a toughly worded speech on the Senate floor and posted an opinion piece on CNN.com demanding that ‘tax hikes’ come off the table.”  [Politico, 6/27/11]

McConnell: “Talking About Tax Revenue Not Helpful.” [AP, 6/26/11]

…EVEN WHILE HIS ENTIRE PARTY IS SEEMINGLY RUNNING SCARED:

The Hill: “GOP Shifts on Taxes.” [The Hill, 7/7/11]

Politico: “Democrats’ Populist Rhetoric Has GOP Backpedaling.” [Politico, 7/7/11]

NBC First Read: The GOP Revenue Message is Now All Over the Place. [NBC First Read, 7/7/11]

Reuters: Republicans Back New Revenues In Debt Deal: Kyl [Reuters, 7/6/11]

Cantor Open To Closing Tax Loopholes.  “House Majority Leader Eric Cantor told reporters today that there may be some wiggle room in the debt-ceiling negotiations when it comes to closing tax loopholes. ‘If the president wants to talk loopholes, we’ll be glad to talk loopholes,’ he explained. ‘We’ve said all along that preferences in the code aren’t something that helps economic growth.’”  [NBC First Read, 7/6/11]

McCain: There Are Certain Revenue Raisers We Can Work On.

CROWLEY: No way no how would Senator John McCain vote for anything, a closing of a loophole or tax hike of any sort?

MCCAIN: Candy, Jon Kyl was in negotiations as you know with the vice president. And he said there were certain revenue raisers in other areas that perhaps we could work on. [CNN, 7/3/11]

Cornyn:  Eliminating the Tax Expenditures Or Loopholes could make our nation more competitive internationally.

BREAM: So, would you consider that a tax hike or raising taxes? How do you define what we’re talking about when we’re talking about revenue?
CORNYN: Well, I think it’s clear that the Republicans are opposed to any tax hikes; particularly, during a fragile economic recovery. The last thing that employers need is further disincentives to not hire people. And that’s what hire taxes would mean. Now, do we believe that tax reform is necessary? I would say absolutely. There’s not enough time to get it this done between now and August 2nd. But it ought to be the first thing we turn to, try to make our tax code more rational. We could bring down rates, eliminate the tax, a lot of tax expenditures or loopholes and actually make our nation more competitive internationally. [Fox News Sunday, 7/3/11]

• Cornyn Open to Revenues in Debt Limit Deal. “When asked about Democratic leaders’ demands that tax breaks be eliminated to raise billions of dollars in additional revenue, Sen. John Cornyn, R-Texas, said the subject should at least be up for consideration in the debt limit talks. ‘I think the president’s own fiscal commission pointed out that there’s a lot of money being used in tax expenditures. I think we ought to get them all out on the table and look at them and see which ones make sense,’ he said. Cornyn, who heads the Senate GOP campaign organization, indicated that he was at least open to closing some tax breaks without requiring that the revenue raised be offset with spending cuts elsewhere. ‘I would tell you that I think that would be a fruitful area for discussion.’”  [CQ Today, 6/28/11]

Graham: Get Rid of Subsidies and Pay off the Debt. On “Meet the Press” Graham said, “No one on the Republican side is going to vote to raise taxes, but I think many of us would look at flattening the tax code, doing away with deductions and exemptions and take that revenue and help pay off the debt.  One way to do this is to do away ethanol subsidy and a bunch of other subsides that go to a few people, take that money back into the federal Treasury and pay off the debt.”  [Meet the Press, 6/19/11]

Senator Alexander Called Now “A Good Time To Take a Hard Look At Unwarranted Tax Breaks” “ Schumer pointed to Senate Republican Conference Chairman Lamar Alexander (Tenn.) as a Republican who wants to reduce the deficit by ending permanent tax breaks that favor particular industries. ‘At a time when we are borrowing 40 cents out of every dollar that we spend, it is a good time to take a hard look at unwarranted tax breaks, and one appropriate use of those funds is to reduce the deficit,’ Alexander said Thursday.” [The Hill, 6/17/11]

Senator Johanns Said “We’re Looking at Everything Now” “More than two-thirds of senators voted to immediately end an existing 45-cent-per-gallon tax credit for blending ethanol in gasoline that expires at the end of the year. ‘I think we’re looking at everything now,’ said Nebraska Republican Sen. Mike Johanns, a former governor and George W. Bush-era agriculture secretary. ‘Trying to figure out what to do with the budget has caused us all to come to grips with some things we’ve supported in the past, all of us.’” [Politico, 6/17/11]

Senator Coburn Said The Vote To End Tax Subsidies “Should Send A Good Signal” To The Biden Talks. “The vote could also have implications for deficit reduction talks Vice President Joe Biden is leading with bipartisan congressional leaders. ‘It should send a good signal,’ Coburn told reporters. ‘We’ve got to do what’s in the best interest of the country, not what’s in the best interest of special interest groups.’” [Politico, 6/17/11]

Senator Coats Said It’s Entirely Appropriate To End Niche Tax Subsidies. According to The Hill, “Coats says it’s entirely appropriate to end niche tax subsidies, or what he calls tax expenditures, to reduce the deficit. He said the thinking has changed since the 2010 election. Before then, he said, the assumption was that money saved from ending tax breaks would be spent on other federal programs.” [The Hill, 6/17/11]

Senator Kyl Said “Revenues Have Never Been Off The Table.” According to Roll Call, Senator Kyl said “Revenues have never been off the table.”  [Roll Call, 6/28/11]

Today the Senate will consider legislation calling on millionaires and billionaires to contribute to this country’s effort to reduce our deficit.

Republicans have already asked the poor, the middle class, children and seniors to make sacrifices to help get our fiscal house in order. This legislation would reaffirm the Senate’s commitment to ensuring the extremely wealthy are asked to make similar sacrifices.

This principle – that all Americans should contribute their fair share as we work together to reduce the deficit – is so common sense it should go without saying. Yet Republicans have boasted about their opposition to having the wealthy contribute their fair share.

This is the simple, straight-forward statement my Republican colleagues oppose: “Any agreement to reduce the budget deficit should require that those earning $1 million or more per year make a more meaningful contribution to the deficit reduction effort.” My Republican colleagues reject that.

Democrats are willing to go on the record saying we believe all Americans – including those who can afford private jets and yachts – should contribute to the collective effort to reduce the deficit. The question is, why aren’t Republicans willing to do the same?

They say it’s because they’re looking out for the people. That claim is ridiculous. It is without foundation.

Let’s talk about the millionaires and billionaires Republicans are determined to protect above all else. Less than one quarter of one percent of tax returns filed in the United States each year belong to people making more than $1 million.

These same people are among the one percent of Americans who control half the country’s wealth.

We are talking about the Warren Buffets of the world. Warren Buffet is my friend, and I have great respect for him. But he is very, very wealthy.

So, what does Warren Buffet, the third richest man in the world, say about contributing his fair share? He welcomes it.

And Buffet criticized a system in which his secretary gives a greater share of her income to the government each year than this man worth $50 billion.

“If you’re in the luckiest 1 percent of humanity, you owe it to the rest of humanity to think about the other 99 percent.” That’s what Warren Buffet said about contributing his fair share.

Since the late 1970’s, incomes for the lucky one percent in America have risen by 281 percent.

The last three decades have been a very, very good time for the very, very wealthy.

President George W. Bush called these people the “Haves and Have-mores.” He also called them his base. And right now the Republican Party is putting what is good for this very small base ahead of what is good for this great nation.

The legislation before us asks only this: that each American be part of the solution rather than of part of the problem.

In poll after poll, Americans have endorsed this principle. They have said they believe we must address our deficit both by reducing spending and by ending tax breaks for the wealthiest citizens and corporations. Democrats have heard them.

If Warren Buffet chooses to buy a private jet – or a whole fleet of them – that’s alright. But the American taxpayers shouldn’t give him a special tax break for doing it.

This country is facing a crisis. We face mounting debt brought on by a decade of war and tax breaks for the wealthy. And we face the prospect that Republicans will force us to default on our financial obligations for the first time in our nation’s history.

Difficult choices must be made. Together we will consider cutting programs that help real people in very real ways. Eliminating tax breaks for oil companies making record profits, corporations that ship jobs overseas and the owners of private jets and yachts should be the easy part of solving this problem.

Yet Republicans walked away from the negotiating table when a solution was in sight because they said no to fairness.

Democrats had already agreed to trillions in difficult cuts in order to prevent a default crisis and avert a world-wide depression. Then Republicans walked away from the table to help the one percent of Americans lucky enough not to need any extra help.

How will Republicans explain this to their constituents back home? As middle class families struggle to make ends meet, my Republicans colleagues are risking the financial future of this country and world for the sake of people who can afford private jets and yachts. I can’t imagine that conversation.

Asking millionaires and billionaires to contribute to solving this nation’s deficit crisis is not unreasonable. It’s just plain common sense and simple fairness.

Yesterday my Republican counterpart said the debate over how to avert the looming default crisis is really a debate over what kind of country we are going to be. I agree.

So, will we be the kind of country that protects tax breaks and giveaways for the richest people and corporations, while sacrificing seniors and the middle class? That is the America my Republican colleagues have proposed. And those priorities are simply backwards.

Democrats, on the other hand, believe that in a nation where nearly half the country’s wealth is controlled by just 1 percent of its people, that 1 percent should not be exempt from the sacrifices asked of everyone else.

If these negotiations will determine what kind of nation we’re going to be, they will determine the character of the Republican Party as well.

Will they be the party that came to Washington to help govern – to craft solutions to the difficult issues facing this nation in cooperation with patriots from both sides of the aisle? Or will they be the kind of single-issue, ideological party that walks away from reasonable compromise for the sake of politics?

David Brooks, a conservative columnist for the New York Times, believes they may be the latter. This is what he said yesterday about the illogical and ideological Republican Party that is emerging:

“If the debt ceiling talks fail, independents voters will see that Democrats were willing to compromise but Republicans were not.”

If we default, he said, it will be the fault of “Republican fanaticism.” That fanaticism is making compromise impossible, no matter how much Democrats are willing to give.

Independent voters, Brooks says, “Will conclude that Republicans are not fit to govern. And they will be right.”

I repeat: a conservative columnist said this.

The Republican Party has been taken over by ideologues either devoted to or terrified by Grover Norquist and his no-tax pledge.

These Republicans refuse to believe the countless respected voices that have said over and over how serious a crisis we face if we fail to avoid default.

And they have refused a deal Brooks called the “mother of all no-brainers,” because it violates an arbitrary pledge. Never mind that the deal is in the best interests of the country and gives Republicans much of what they say they want. They walked away from the table.

The statesman Dean Acheson said that negotiating “assumes parties more anxious to agree than to disagree.”

It’s no wonder, then, that Republicans have refused to negotiate. They won’t even admit to supporting their own long-held positions if Democrats support those positions, too.

We should all be able to agree we need to reduce the deficit and get our fiscal house in order. Democrats and Republicans alike have said that.

We should all be able to agree we need to avert the global economic disaster an American default would cause. Business leaders and economist alike have said that.

And we should all be able to agree that millionaires, billionaires, oil companies and the owners of yachts and jets don’t need special tax breaks the rest of Americans don’t get.

Yet Republicans have defended those tax breaks again and again. They claim that Democrats want to raise taxes on ship builders and airplane manufacturers. That couldn’t be farther from the truth.

In fact, Democrats want to end special tax breaks for the millionaires and billionaires who are lucky enough to be able to afford private jets and yachts. And we’re proud of that.

These tax breaks aren’t available to middle-class Americans. You can’t write off the family station wagon or the rowboat you take fishing with the grandkids.

These breaks are available for multimillion-dollar toys only a handful of Americans can afford.

I repeat: I am proud that Democrats are standing up for America’s middle-class families instead of the richest of the rich.

And as my Republican colleagues defend tax breaks for special interests, big donors and the wealthiest 1 percent of Americans, I urge them to think once again about what kind of party they want to be.

They must ask themselves whether they want to be the kind of party David Brooks, a conservative, described: a party of unreasonable fanatics that refuses to compromise no matter how sweet the deal for their side and no matter how grave the consequences for our nation.

Plus, Conservative Columnist Brooks Warns ‘No Revenues’ Absolutism Makes GOP Look Like ‘No Longer A Normal Party’—Says McConnell Stance Would Cause Independents To Blame ‘GOP Fanaticism for Causing Default’

WHILE MCCONNELL CONTINUES TO DIG IN AGAINST GETTING RID OF ANY TAX LOOPHOLES …

McConnell Said No to All Forms of Revenue. “President Barack Obama stepped back into deficit-reduction talks Monday, only to be greeted by a double-barrel blast from Senate Republican leader Mitch McConnell, who peremptorily rejected any deal that would include the added revenues Obama wants together with spending cuts. McConnell’s meeting with the president stretched more than an hour, but even before the two men sat down together, the Kentucky Republican had delivered a toughly worded speech on the Senate floor and posted an opinion piece on CNN.com demanding that ‘tax hikes’ come off the table.”  [Politico, 6/27/11]

McConnell: “Talking About Tax Revenue Not Helpful.” [AP, 6/26/11]

…TWO MEMBERS OF HIS CAUCUS TOOK NEW STEPS DISTANCING THEMSELVES FROM HIS STANCE …

NYT: “2 Republicans Open Door to Increases in Revenue.” On July 3, the New York Times reported that two senior Republicans had said they were open to raising revenues as part of a deal to raise the debt ceiling.  Senator John Cornyn said, “we could bring down rates, eliminate the tax, a lot of tax expenditures or loopholes and actually make our nation more competitive internationally.” While Senator John McCain of Arizona said that he would be willing to consider “revenue raisers.” [New York Times, 7/3/11; Fox News Sunday, 7/3/11; CNN, 7/3/1]

…AND A CONSERVATIVE COLUMNIST WARNED GOP TO ABANDON MCCONNELL’S STANCE OR RISK BEING BLAMED FOR A DEFAULT BY INDEPENDENTS  …

Brooks: If Debt Ceiling Talks Fail, Independents Will Blame GOP. “If the debt ceiling talks fail, independents voters will see that Democrats were willing to compromise but Republicans were not. If responsible Republicans don’t take control, independents will conclude that Republican fanaticism caused this default. They will conclude that Republicans are not fit to govern.  And they will be right.”  [New York Times, Brooks Column, 7/5/11]

Brooks: GOP Is No Longer A Normal Party, But A Movement. “That’s because the Republican Party may no longer be a normal party. Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative.” [New York Times, Brooks Column, 7/5/11]

• “The members of this movement do not accept the logic of compromise, no matter how sweet the terms. If you ask them to raise taxes by an inch in order to cut government by a foot, they will say no. If you ask them to raise taxes by an inch to cut government by a yard, they will still say no.” [New York Times, Brooks Column, 7/5/11]
• “The members of this movement do not accept the legitimacy of scholars and intellectual authorities. A thousand impartial experts may tell them that a default on the debt would have calamitous effects, far worse than raising tax revenues a bit. But the members of this movement refuse to believe it.” [New York Times, Brooks Column, 7/5/11]
• “The members of this movement have no sense of moral decency. A nation makes a sacred pledge to pay the money back when it borrows money. But the members of this movement talk blandly of default and are willing to stain their nation’s honor.” [New York Times, Brooks Column, 7/5/11]
• “The members of this movement have no economic theory worthy of the name. Economists have identified many factors that contribute to economic growth, ranging from the productivity of the work force to the share of private savings that is available for private investment. Tax levels matter, but they are far from the only or even the most important factor.” [New York Times, Brooks Column, 7/5/11]
• “But to members of this movement, tax levels are everything. Members of this tendency have taken a small piece of economic policy and turned it into a sacred fixation. They are willing to cut education and research to preserve tax expenditures. Manufacturing employment is cratering even as output rises, but members of this movement somehow believe such problems can be addressed so long as they continue to worship their idol.” [New York Times, Brooks Column, 7/5/11]

Brooks: GOP Should Take “Deal of the Century,” Close Loopholes That They Have Called “Distortionary.” “If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred million dollars of revenue increases. …The party is not being asked to raise marginal tax rates in a way that might pervert incentives. On the contrary, Republicans are merely being asked to close loopholes and eliminate tax expenditures that are themselves distortionary. This, as I say, is the mother of all no-brainers. But we can have no confidence that the Republicans will seize this opportunity.” [New York Times, Brooks Column, 7/5/11]

“The main obstacle to finding common ground is Republicans’ stubborn insistence on protecting taxpayer-funded giveaways to corporations and individuals who don’t need the giveaways,” said Senator Reid. Watch the clip below for more details.

This weekend we will celebrate Independence Day, and 235 years of this country’s proud history.

This nation was founded on the notion of liberty and justice for all. As we celebrate, we should remember that the pursuit of liberty is not a journey with a destination, but rather a quest to which we must recommit ourselves every day.

And as we commit fully and firmly to “liberty and justice,” we must commit just as fully and firmly to the idea that that liberty and justice should truly be “for all.”

It is often said that with liberty comes responsibility. We should take that responsibility seriously. I know do.

That is why the Senate will reconvene on Tuesday, the day after the Fourth of July. We will be in session next week, with our first vote on July 5th. There is still so much to do to put Americans back to work, cut our deficit and get our economy back on track.

And that work is too important, the obstacles too steep and the time too short to waste even a moment.

I hope my Republican colleagues will, for once, put politics aside and help Democrats to fulfill Congress’ sacred responsibility to the American people.

There are some Republicans in Congress who say the U.S. government has less responsibility to pay its bills than struggling families across the country. As a default crisis approaches, Republicans are saying we should simply stop cutting checks for the national equivalent of the mortgage, the credit card bill and the car payment.

Republicans say this crisis is about spending more or growing government. They are wrong. This crisis is about paying the bills for things we’ve already bought. For example, a decade of tax breaks for millionaires and billionaires, which came from borrowed money.

And what they aren’t saying is what the consequences would be of such an irresponsible decision to not pay our accrued bills.

It would plunge the United States not into recession but into full-blown depression, without a doubt. Without exception, the respected financial voices of our time have said the effects of a default crisis would be would be felt across the globe. I repeat: this would create a world-wide depression.

These respected voices could not have spoken in clearer terms.

The CEO of JP Morgan Chase, Jamie Dimon, said default would be “catastrophic.” He went on to say that raising the debt limit is our “moral obligation.”

What does that mean? It means the world should “know that the United States is good for its money. Period.” That’s what he said. I agree.

And he’s not the only one saying this. Business leaders have said it. Economists, banks and Republican advisors to Presidents Reagan and H.W. Bush have said it. And, perhaps most importantly, credit rating agencies have said it. Credit rating agencies Standard & Poor’s and Moody’s have said that if the United States misses even one payment, the nation will immediately lose its high credit rating. Interest rates would increase. Every 1 percent increase in interest rates would cost the nation $1.3 trillion.

That’s one more reason why defaulting on our debt to make a point about fiscal responsibility makes so little sense. If we default, it will actually cost the nation more to meet our financial obligations in the future.

Democrats believe we must create jobs and get our economy moving again. We must cut spending and live within our means. And we must eliminate tax loopholes for millionaires, billionaires and oil companies. Republicans must not put the economy of this country and the world at risk for the sake of protecting special interests and big donors.

It’s time we return to the type of fiscal discipline Democrats brought to Washington in the 90’s, when Democrats in Congress and the White House balanced the budget and used the surplus to pay down the debt.

But a default crisis would do nothing to get our fiscal house in order. Instead, default would derail our fragile economic recovery and plunge this nation – and the world – back into not just a recession, but a full blown depression.

It would also risk millions of American jobs, tax refunds, Social Security checks, Medicare payments and paychecks for our troops. And those risks are simply not worth taking.

Today, middle-class families in America are struggling to economically survive. They are living paycheck to paycheck. Meanwhile, Republicans walked away from negotiations that would have cut the deficit and averted a catastrophic default in order to protect tax breaks for millionaires and billionaires.

Republicans are willing to risk our economy to protect tax breaks for corporations that ship jobs overseas. Meanwhile, average Americans are struggling to find work here at home.

Republicans are willing to risk our economy to protect tax breaks for owners of corporate jets, yachts and oil companies. Average Americans are struggling to afford gas for their cars.

Republicans are willing to risk our economy to protect tax breaks for millionaires and billionaires. Average Americans are struggling to make their mortgage payments.

I’ve said it before: Republicans simply have the wrong priorities. They have made it their mission to stand up and shout for the richest few. But Democrats consider it our responsibility to stand up and shout for all Americans.

McConnell Said No to All Forms of Revenue. “President Barack Obama stepped back into deficit-reduction talks Monday, only to be greeted by a double-barrel blast from Senate Republican leader Mitch McConnell, who peremptorily rejected any deal that would include the added revenues Obama wants together with spending cuts. McConnell’s meeting with the president stretched more than an hour, but even before the two men sat down together, the Kentucky Republican had delivered a toughly worded speech on the Senate floor and posted an opinion piece on CNN.com demanding that ‘tax hikes’ come off the table.”  [Politico, 6/27/11]

McConnell: “Talking About Tax Revenue Not Helpful.” [AP, 6/26/11]

…AND NOW HIS CAUCUS IS SAWING IT OFF.

Cornyn Open to Revenues in Debt Limit Deal. “When asked about Democratic leaders’ demands that tax breaks be eliminated to raise billions of dollars in additional revenue, Sen. John Cornyn, R-Texas, said the subject should at least be up for consideration in the debt limit talks. ‘I think the president’s own fiscal commission pointed out that there’s a lot of money being used in tax expenditures. I think we ought to get them all out on the table and look at them and see which ones make sense,’ he said. Cornyn, who heads the Senate GOP campaign organization, indicated that he was at least open to closing some tax breaks without requiring that the revenue raised be offset with spending cuts elsewhere. ‘I would tell you that I think that would be a fruitful area for discussion.’”  [CQ Today, 6/28/11]

Graham Get Rid of Subsidies and Pay off the Debt. On “Meet the Press” Graham said, “No one on the Republican side is going to vote to raise taxes, but I think many of us would look at flattening the tax code, doing away with deductions and exemptions and take that revenue and help pay off the debt.  One way to do this is to do away ethanol subsidy and a bunch of other subsides that go to a few people, take that money back into the federal Treasury and pay off the debt.”  [Meet the Press, 6/19/11]

Senator Alexander Called Now “A Good Time To Take a Hard Look At Unwarranted Tax Breaks” “ Schumer pointed to Senate Republican Conference Chairman Lamar Alexander (Tenn.) as a Republican who wants to reduce the deficit by ending permanent tax breaks that favor particular industries. ‘At a time when we are borrowing 40 cents out of every dollar that we spend, it is a good time to take a hard look at unwarranted tax breaks, and one appropriate use of those funds is to reduce the deficit,’ Alexander said Thursday.” [The Hill, 6/17/11]

Senator Johanns Said “We’re Looking at Everything Now” “More than two-thirds of senators voted to immediately end an existing 45-cent-per-gallon tax credit for blending ethanol in gasoline that expires at the end of the year. ‘I think we’re looking at everything now,’ said Nebraska Republican Sen. Mike Johanns, a former governor and George W. Bush-era agriculture secretary. ‘Trying to figure out what to do with the budget has caused us all to come to grips with some things we’ve supported in the past, all of us.’” [Politico, 6/17/11]

Senator Coburn Said The Vote To End Tax Subsidies “Should Send A Good Signal” To The Biden Talks. “The vote could also have implications for deficit reduction talks Vice President Joe Biden is leading with bipartisan congressional leaders. ‘It should send a good signal,’ Coburn told reporters. ‘We’ve got to do what’s in the best interest of the country, not what’s in the best interest of special interest groups.’” [Politico, 6/17/11]

Senator Coats Said It’s Entirely Appropriate To End Niche Tax Subsidies. According to The Hill, “Coats says it’s entirely appropriate to end niche tax subsidies, or what he calls tax expenditures, to reduce the deficit. He said the thinking has changed since the 2010 election. Before then, he said, the assumption was that money saved from ending tax breaks would be spent on other federal programs.” [The Hill, 6/17/11]

Senator Kyl Said “Revenues Have Never Been Off The Table.” According to Roll Call, Senator Kyl said “Revenues have never been off the table.”  [Roll Call, 6/28/11]

REPUBLICAN POLITICIANS DON’T KNOW WHAT THE IMPACT OF DEFAULT WOULD BE…

Pawlenty Said Republicans Shouldn’t Raise the Debt Ceiling, Had No Idea What the Consequences Would Be.

Question: President Obama has stepped into the deficit talks, meeting separately with Senate leaders Harry Reid and Mitch McConnell at the white house to try to offset a federal debt increase. How do you think the president is handling this issue?

Pawlenty: We don’t know. The real test is coming up as the deadline approaches. Right now, as judged by outcomes, the answer is we haven’t done anything yet. The debt ceiling is going to be a fork in the road. My view is that the Republicans shouldn’t raise it. If they do, they need to get something permanent and structural and meaningful, the constitutional amendment, spending caps, and changes in the near term.

Scarborough: what’s the impact if it’s not raised?

Pawlenty: Well, we don’t know that.

Scarborough: Well, I don’t know what’s going to happen to me if I jump off a cliff. But I think I’ll go splat. [MSNBC, 6/28/11]

RNC Chair Reince Preibus Said We Don’t Know What Could Happen If We Default.

Scarborough: What do you believe, though? Do you believe that if we don’t raise the debt ceiling the economy will just keep chugging along normally or do you believe it will cause a financial crisis?

Preibus: You know, I don’t know, because we’ve never been there before, Joe. [MSNBC, 6/28/11]

Rep. Ron Paul: Bankruptcy Could Be Cure For U.S. Debt. “Rep. Ron Paul (R-Texas) said Monday that bankruptcy could be the best solution for the United States to address its mounting debt. … ‘Are we going to experience — are you predicting in essence — if bankruptcy is the cure for Greece, is it also the cure for the United States?’ asked host Jan Mickelson. ‘Absolutely,’ Paul responded.”  [The Hill, 6/28/11]

…THEY SHOULD HEED THE WARNINGS OF BUSINESS LEADERS AND FELLOW REPUBLICANS…

Warren Buffett Said It Would Be Congress’ “Most Asinine Act” Ever To Fail To Raise Debt Limit. “Warren Buffett said he expects the Congress to raise the nation’s debt ceiling before it expires in mid-May, and said it would be that body’s “most asinine act” ever if it failed. Speaking on Saturday at Berkshire Hathaway’s annual shareholder meeting in Omaha, Nebraska, Buffett said imposing a debt ceiling was a mistake in the first place.” [Reuters, 4/30/11]

Bernanke: Failure To Raise Debt Limit “Could Cause Severe Disruptions In Financial Markets.” In a speech, Federal Reserve Chairman Bernanke said “Failing to raise the debt ceiling in a timely way would be self-defeating if the objective is to chart a course toward a better fiscal situation for our nation. The current level of the debt and near-term borrowing needs reflect spending and revenue choices that have already been approved by the current and previous Congresses and Administrations of both political parties. Failing to raise the debt limit would require the federal government to delay or renege on payments for obligations already entered into. In particular, even a short suspension of payments on principal or interest on the Treasury’s debt obligations could cause severe disruptions in financial markets and the payments system, induce ratings downgrades of U.S. government debt, create fundamental doubts about the creditworthiness of the United States, and damage the special role of the dollar and Treasury securities in global markets in the longer term. Interest rates would likely rise, slowing the recovery and, perversely, worsening the deficit problem by increasing required interest payments on the debt for what might well be a protracted period.” [Bernanke Remarks, 6/14/11]

James Baker, Reagan COS and Treasury Secretary, Supported Raising Debt Limit. In an Op-Ed,  Baker wrote: “Step No. 1 is to raise the debt limit in a way that generates confidence in the markets. That means including a restraint on spending. To accomplish this, the debt limit should be increased by an amount sufficient to service the U.S. debt for six months, provided that the proceeds from the increase are used to service debt obligations.” [Wall Street Journal, Baker Op-Ed, 6/17/11]

Chamber of Commerce President Tom Donohue Said Debt Ceiling Had To Be Raised. “‘We absolutely support the expansion of the debt,’ Chamber president Tom Donohue said. He added that officials should make a few gestures in the direction of spending cuts, but dismissed the brinksmanship as mainly political posturing. ‘We’ve got to do the debt ceiling,’ he said. ‘There’ll be a lot of political carrying on, but it will be done.’” [Washington Post, 1/12/11]

Former McCain Adviser Douglas Holtz Eakin: Congress Has To Raise The Debt Limit. “The former director of the Congressional Budget Office, and chief economic policy adviser to John McCain during the 2008 presidential campaign, says Congress has to raise the debt limit, and soon. ‘I think that ultimately Congress has to raise the debt limit,’ Doug Holtz-Eakin told me after moderating an event on Capitol Hill. “We have to be good stewards of the nation’s credit rating [and] doing it sooner is better than later.’” [TPM, 4/26/11]

JP Morgan Chase CEO Jamie Dimon: Default on Debt Would Be “Catastrophic.” “The head of a major Wall Street company echoed White House officials Wednesday, warning that a default on America’s debts would be ‘catastrophic.’ Speaking at an event hosted by the U.S. Chamber of Commerce, Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co., said America has a ‘moral obligation’ to ensure it pays its debts on time. ‘This chatter about not meeting our obligations, I just don’t understand it,’ he said. ‘It’s a moral obligation to ourselves. … They should know that the United States is good for its money. Period.’” [The Hill, 3/30/11]

Fitch Ratings Agency: Failure To Raise Debt Ceiling Would “Threaten The Still Fragile Financial Stability In The US And The World As A Whole.” According to the Financial Times, the ratings agency Fitch said “‘Failure to raise the debt ceiling in a timely manner would imply a crisis of governance that could imperil the US’s triple-A status,’ said David Riley, head of sovereign ratings at Fitch. ‘More importantly, default by the world’s largest borrower and issuer of the pre-eminent reserve currency would be extraordinary and threaten the still fragile financial stability in the US and the world as a whole.’” [Financial Times, 6/8/11]

CBO Director Called Failure To Raise Debt Limit “A Dangerous Gamble.” At a Roundtable,  CBO Director Elmendorf said “It is a dangerous gamble because any government that has borrowed as much as ours has borrowed and will need to borrow as much as ours will need to borrow cannot take the views of its creditors lightly. Even a small increase in the perceived risk of Treasuries would be very expensive for the countries.” Talking Points Memo, 6/14/11]

Larry Kudlow: It Would Be “Catastrophe” If Debt Ceiling Not Raised. “Kudlow said it would be a ‘catastrophe’ if we failed to raise the debt ceiling — and noted that he was ‘very worried’ about it. When I noted that some don’t think failing to raise the debt ceiling would be a big deal, he said: ‘Those people would be wrong. I just want to tell you; the idea that we can’t sell bonds to pay the interest on our debt is an utter disaster, Matt. Trust me on this, my friend. This is much different than the government shutdown. The government shutdown you know, we go on until tomorrow. We furlough unessential workers, but the social security checks get paid, right? If you can’t sell more bonds after the ceiling is reached, the social security checks do not get paid, okay — nothing gets paid.’” [Daily Caller, 4/13/11]

…BECAUSE THE CONSEQUENCES ARE DIRE.

Default Crisis Could Cost U.S. 640,000 Jobs. The centrist think tank Third Way reported, “J.P. Morgan estimates that higher Treasury rates would cause our GDP to decrease by 1%.  For every 1% change in GDP growth, there is an estimated 0.46% change in total employment, according to economist William Seyfried. Using his estimation, the U.S. would shed 640,000 jobs.” They added, “this is a conservative estimate as default is a ‘black swan’ event that has no American precedent.” [Third Way, May 2011]

J.P. Morgan: Default Would Slow Economic Growth By At Least 1%. J.P. Morgan wrote, “if Treasury yields were to rise 50 bp as we project, GDP would likely be reduced by about 0.4%. In addition, the equity market would likely sell off sharply in response to a technical default, as it did on the day that Congress initially failed to pass TARP in September 2008. On that day, the S&P 500 fell 9%; using this as a rough guide, we estimate that a decline of a similar magnitude on a sustained basis in the aftermath of a default would take an additional 0.5% off of GDP growth due to lower consumption. Thus, the quantifiable effects of a default alone would likely take about 1% off of GDP growth, and the ultimate damage could be far greater.” [J.P. Morgan, 4/19/11]

Treasury: “Every American, Whether They’re Buying A House Or Buying A Car Or Just Paying Off Their Credit Card Bills, Will Have To Experience Higher Interest Rates.” In a May Senate hearing, Deputy Treasury Secretary Neal S. Wolin testified, “I think it is absolutely unthinkable that we would not raise the debt ceiling in order to make good on obligations that Congresses and presidents of the past have — have made… the real implications with respect to funding rates and interest rates that will affect not just the U.S. government, ironically, which has its own set of fiscal implications, but also individuals… every American, whether they’re buying a house or buying a car or just paying off their credit card bills, will have to experience higher interest rates, which will have very real effects on their — on their pocketbooks.  But I think more broadly, the effects on wealth and so forth, people’s balances in their — in their mutual fund accounts and so forth, all will be put in jeopardy in ways that are unthinkable.  And so the implications are enormous. It is something that we think of as a — as enormous risk.” [Senate Committee on Banking, Housing and Urban Affairs, 5/12/11]

Washington, D.C.–Nevada Senator Harry Reid made the following remarks today on the Senate floor regarding Republicans’ willingness to risk our economy to protect tax breaks for oil companies and corporate jets. Below are his remarks as prepared for delivery:

Yesterday I sat down with the President to talk about how to avoid a default crisis that would be black mark on this country’s reputation.

If we fail to avert this crisis, it would be the first time in our nation’s history that we have defaulted on our financial obligations. And it would send shock waves through the global economy.

I’m not the only one saying that. The most respected voices in the business and financial community are saying the same thing. Default would be awful.

Business leaders, economists, bank executives, credit rating agencies and even a Republican advisor to Presidents Ronald Reagan and George H.W. Bush have used some very serious words to describe the kind of crisis defaulting on our debt would cause.

The word many have used is “catastrophe.”

Warren Buffett said allowing the United States to default on its debt would be Congress’ “most asinine act” ever.

Treasury Secretary Timothy Geithner said a failure to avert default would have “catastrophic economic consequences that would last for decades.”

Failure to avert this crisis would have dire consequences. It would result in the most serious financial crisis this country has ever faced. Millions of Americans could lose their jobs. Social Security checks could stop. So could paychecks to our troops.

So, what could be so important that my Republicans colleagues are willing to put our economy at such dire risk? What could be worth walking away from the negotiating table? Tax breaks for wealthy oil companies and corporate jets.

Republicans have gone to the mat for Big Oil – fighting again and again to preserve wasteful taxpayer-funded giveaways to companies that made $32 billion in profits in the first quarter of this year alone. And Republicans walked away from the negotiating table to save tax breaks for corporate jets.

So, which big industries and special interests will they fight for next? Oil companies? Companies that ship jobs overseas? Corporate jets?

If they were truly serious about reducing the deficit, they would admit this kind of waste must end.

Yet some top Senate Republicans say eliminating these subsidies shouldn’t even be part of the discussion as we find a way to reduce the deficit and avoid a catastrophic default.

Several rank-and-file Senate Republicans have said handouts to oil and gas companies and other wasteful tax breaks should be on the table as we negotiate. And 34 Republicans endorsed the view that ending taxpayer giveaways should be part of the solution when they voted to eliminate subsidies for ethanol.

It seems Republicans can’t even agree among themselves whether subsidies and giveaways are sacrosanct.

The one thing they can agree on: they’re willing to balance the budget on the backs of seniors instead. They’re willing to end Medicare as we know it. They’re willing to slash Medicaid, jeopardizing coverage for 80 percent of American seniors in nursing homes.

Republicans’ priorities are clear. They’re also dead wrong.

Democrats know we need to make difficult spending cuts to reduce our deficit. But to dig ourselves out of this financial hole, we must also create jobs to spur our economy. And we must break the cycle of wasteful giveaways – not break our promise to seniors.

The junior Senator from South Carolina, a Republican, threatened that any Republican who votes to avert a default crisis will be “gone” – voted out in a wave of Tea Party anger. This kind of inflammatory language is irresponsible. There is simply too much at stake.

Also, he didn’t mention that 235 Republicans in the House and 40 in the Senate – including the junior Senator from South Carolina – have already voted to increase our debt this year. Their ideological budget would have increased the debt by more than 60 percent over the next 10 years. That’s nearly $9 trillion in a decade.

And what did Americans get for their $9 trillion? A plan that ends Medicare as we know it. A plan that would slash Medicaid, jeopardizing coverage for 80 percent of American seniors in nursing homes. A plan that protects tax breaks for billionaires and oil companies while putting millions of seniors at risk.

The psychologist Alfred Adler once said that “it is easier to fight for one’s principles than to live up to them.” Republicans shouted loudly and repeatedly about reducing the debt. Then they gave us 9 trillion reasons not to trust their rhetoric.

The time for empty rhetoric is over. Now it is time for my Republican colleagues to put the good of our economy ahead of their own good politics.

 
TRUE: Kyl Says GOP’s Own Budget Increases National Debt By Trillions of Dollars. “The Ryan Budget That Passed The House and that most of us on the Republican side voted for over here adds $5 trillion to the debt over the next ten years.”  [Kyl Floor Statement, 6/27/11]

• House GOP Budget Would Raise the Debt By More Than 60%, to $23.1 Trillion. The federal debt ceiling currently stands at $14.3 trillion. Under the House Republican budget, the amount of public debt subject to the limit would be $23.1 trillion in Fiscal Year 2021, meaning the GOP plan forces an $8.8 trillion in additional debt – an increase of more than 60% – over ten years. [H. Con. Res. 34 (Page 5); Los Angeles Times, 4/15/11]
• LA Times: ‘Do House Republicans Realize They Just Endorsed a Higher Debt Limit?’“As far as I could tell, no amendments were offered to reduce the levels of spending outlined in the budget to hold that level of debt at or below $14.3 trillion. So, I guess that means Republicans won’t object to raising the current debt ceiling within the next few weeks so that the federal government can honor the commitments it has already made?” [Los Angeles Times, 4/15/11]

FALSE: Kyl Says GOP’s Budget Increases National Debt By Only $5 Trillion. “The Ryan Budget That Passed The House and that most of us on the Republican side voted for over here adds $5 trillion to the debt over the next ten years.”  [Kyl Floor Statement, 6/27/11]

• GOP Budget Called For Almost $9 Trillion Worth of Debt Limit Increases Over the Next Ten Years. [H. Con. Res. 34]

YOU WON’T BELIEVE WHO IS SUDDENLY THE VOICE OF REASON

POLITICO: “GOP SPLIT OVER DEBT STRATEGY”

McConnell Proposes:

McConnell Proposed Short Term Debt Ceiling Hike. McConnell said, “The president and the vice president, everybody knows you have to tackle entitlement reform.  If we can’t do that, then we’ll probably end up with a very short-term proposal over, you know, a few months, and we’ll be back having the same discussion again in the fall.”  [Face the Nation, 6/22/11]

Cantor Smacks Down:

Cantor “Pushed Back Hard” On Notion of Short Term Debt Limit Increase. “House Majority Leader Eric Cantor pushed back hard Tuesday against Senate Republican suggestions of a scaled-back, short-term debt deal, saying it’s ‘crunch time’ in White House budget talks and ‘if we can’t make the tough decisions now, why … would [we] be making those tough decisions later.  I don’t see how multiple votes on a debt ceiling increase can help get us to where we want to go,’ the Virginia Republican told reporters. ‘It is my preference that we do this thing one time. … Putting off tough decisions is not what people want in this town.’”  [Politico, 6/22/11]

McConnell Proposes:

Senator McConnell Opposed Eliminating Tax Breaks In Debt Limit Deal.

SCHIEFFER: “Well, let me just ask you this. As part of a deal to raise the debt ceiling, would you be willing and open to eliminating some tax breaks if Democrats will go along with some spending cuts?”

MCCONNELL: “Well, we’re really interested in corporate tax reform, for that matter, tax reform across the board. It’s very hard, Bob, to deal with a big subject like tax reform within a month. We need to do it. But it’s hard to squeeze that into this time limit we have in connection with the deficit. So we need to concentrate on cutting spending.” [Face the Nation, 6/19/11]

Cantor Smacks Down:

Majority Leader Cantor Said “We Are Not Opposed To Revenues.” “And while Republicans have stuck with the talking point that the government doesn’t have a revenue problem; it has a spending problem, GOP leaders have left the door open to finding more money in the tax code. ‘We are not opposed to revenues. We are just opposed to tax increases,’ Majority Leader Eric Cantor (R-Va.) told reporters.” [Politico, 6/21/11]

I am happy to see Republicans opening up to what Democrats have being saying all along: cutting wasteful subsidies to big oil should be on the table if we are going to reduce the deficit.

Yesterday my friend, the senior Senator from Tennessee, said we should consider ending taxpayer subsidies for oil companies making record profits.

Democrats agree. Handouts like these – to companies that made $36 billion in the first quarter of this year alone – must be part of the discussion as we get our fiscal house in order.

As we decide where to cut, we will need to make some tough choices. But not every choice has to be difficult.

If we are serious about reducing spending, ending tens of billions in taxpayer giveaways to big oil companies shouldn’t be one of the difficult decisions.

And when the other side says the alternative is to end Medicare, slash Medicaid and put millions of seniors at risk, the choice is that much clearer.

We cannot take with one hand from those who can least afford it and give with the other to those who can.

Before we end Medicare as we know it or eliminate Medicaid funding for nursing homes, as the Republicans have proposed, we should cut wasteful spending.

During the course of a year, one in five Americans will be on Medicaid. The cuts Republicans propose affect real people.

The elderly man in the nursing home. The child missing her yearly checkup. The pregnant woman whose baby depends on proper prenatal care. The person with a disability who is able to live alone thanks to the helping hand Medicaid provides.

And these cuts will affect you, too. Cutting Medicaid simply shifts costs – it doesn’t lower them.

Each patient who doesn’t get the care he needs from a doctor today will get it tomorrow for twice the price in an emergency room. And you and I will foot the bill.

The American people have spoken loudly and clearly. They do not want to balance the budget on the backs of seniors, children or people with disabilities.

I am glad to one of my Republicans colleagues is finally getting the message.

“Republicans are holding the United States’ credit hostage to ram through their plan to end Medicare. They are now saying they won’t accept any plan to reduce the deficit unless it also cuts Medicare. Voters have resoundingly rejected this ideological agenda. Republicans should drop it and move on.”

###

McConnell: I Won’t Agree To Raise The Debt Limit Without Medicare Cuts

Brian Beutler | May 27, 2011, 12:17PM

Senate Minority Leader Mitch McConnell (R-KY) says substantial Medicare cuts must be part of a spending and deficit cut package to get his support to raise the debt limit.

In a Capitol briefing with reporters Friday, McConnell declared affirmatively that unspecified Medicare cuts are on the table in bipartisan debt limit negotiations, led by Vice President Joe Biden, and, he expects, will be part of the solution. But in response to a question from TPM, he went further than he has in the past in laying down a marker on that issue. Medicare cuts must be part of that deal to get his support — even if negotiators manage to find trillions of dollars in savings elsewhere, even if his other priorities are met.

“To get my vote, for me, it’s going to take short term [cuts, via spending caps]… Both medium and long-term, entitlements.,” McConnell said. “Medicare will be part of the solution.”

To clarify, I asked “To clarify, if [the Biden group] comes up with big cuts, trillions of dollars worth of cuts, but without substantially addressing Medicare, it won’t get your vote?”

“Correct,” McConnell said.

That’s not a filibuster threat, but it is a clear indication of what the GOP is demanding in private deliberations. McConnell repeatedly cited Bill Clinton and House Minority Whip Steny Hoyer, who this week acknowledged — as have many Democrats — that resolving the long-term deficit problem will require addressing Medicare. Hoyer in particular said that Medicare will be on the table in current debt negotiations, and with revenues off the table — that means they’re talking politically dangerous cuts. And for Republicans, that’s the point.

Here’s how McConnell described it, in response to a different question about the political cost to Republicans of having voted already to privatize Medicare.

“I think the 2012 election will take care of itself — it’s about a year and a half from now,” he said. “I would think that we will hopefully have done something significant in this area by then, and the American people can decide whether they want to punish both sides for having done that, because it will take both sides to do it. It will come out of the conversations that are going on now led by the Vice President.”

Of course, not all Medicare cuts are created equal, and Medicare spending can be reduced without necessarily cutting seniors’ benefits. But the idea here is clear: if the country’s to avoid defaulting on its debt, there has to be a bipartisan vote to cut Medicare. And the hope for McConnell and the GOP is that this will obscure the test vote they took on phasing the program out entirely.

The question now is whether Democrats will be on board with this, or whether they’ll try to call the GOP’s bluff.

http://tpmdc.talkingpointsmemo.com/2011/05/mcconnell-medicare-must-be-cut-to-raise-debt-limit.php

WASHINGTON, DC—House Majority Leader Eric Cantor on Wednesday became the latest and highest-ranking Republican so far to dismiss the looming threat of a U.S. default as no big deal, joining a chorus of Republicans who continue to downplay the fallout of a default as they seek leverage to impose their plan for ending Medicare.

“House Republicans are so fixated on imposing their plan to end Medicare as we know it that they are trying to wish away what every credit market analyst says would be an utter catastrophe for our economy,” U.S. Senator Charles E.Schumer said.

A round-up of recent Republican statements denying the consequences of a default appears below.

UPPING ANTE IN BID TO END MEDICARE, HOUSE GOP DENIES DEFAULT WOULD COUNT AS CRISIS

Washington Post; “Cantor is latest Republican to dismiss importance of debt-ceiling deadline for financial markets.” House Majority Leader Eric Cantor (R-Va.) told reporters in Richmond Wednesday that financial markets watching discussions over raising the nation’s debt limit are looking to see progress on cutting spending in Washington — rather than a resolution of negotiations by any deadline.  ‘What I think is that the markets are looking to see credible progress on changing the fiscal trajectory in Washington,’ Cantor said, after a job forum for local business executives at Virginia Commonwealth University. ‘The markets are not fooled by some date imposed to say that that is the trigger for the collapse.” [Washington Post, 5/18/11]

More Than One Hundred House and Senate GOPers Have Signed Onto Bill to Prioritize Payments of Debt Over All Other Spending, Including Troop Pay and Social Security. “Almost 100 House members and 22 senators have since signed onto Toomey’s Full Faith and Credit Act, which would require Treasury to first make interest payments on the debt. The bargaining positions of congressional Republican leaders have hardened. And the philosophy taking hold among conservatives is that if the country tips into a default, Geithner is to blame, not Republicans who held out for a better deal.”  [Politico, 5/17/11]

Toomey Not Worried About Negative Effects on Social Security Recipients or The Economy If Republicans Force Default. “Andy Sullivan of Reuters asked Toomey if he worried it ‘would push the country back into recession if, for example, we have to suspend Social Security payments.’ Toomey wasn’t worried. ‘I don’t think it’s going to have an adverse impact on the economy in the days, weeks or perhaps even months that this would continue,’ he said, allowing that ‘this is not an optimal arrangement indefinitely.’”  [Washington Post, 5/18/11]

·         Toomey: “I want to say categorically that is absolutely false: Failure to raise the debt limit upon the deadline submitted by the Treasury Secretary does not equate to a default on our debt at all.” [Washington Post, 5/18/11]

·         Toomey A US Default Would be not be a “Catastrophe.” “They acknowledge the administration will need to make deep and painful spending cuts but argue that Geithner can avert default if he prioritizes which bills to pay. It would be more like a partial government shutdown, Toomey said.   “That’s disruptive; that’s not optimal,” Toomey conceded in an interview. ‘But it’s not a financial crisis. It’s not a default on our debt. It’s not a catastrophe. It’s a disruption.’” [Politico, 5/17/11]

Republican Study Committee Chair Jim Jordan: “Keeping the debt ceiling at its current level would force Congress to prioritize spending, but it would not force a default on our debt.  The only thing forcing a default would be Treasury Secretary [Timothy] Geithner allowing such a catastrophe to take place.”  [Washington Post, 5/16/11]

Arizona Rep. David Schweikert: “The one acting like his hair is on fire is Mr. Geithner.  It’s absolutely silly. We have plenty of cash flow to pay debt, which means I’m trying to figure out how credibly the administration can keep using that language.”  [Politico, 5/17/11]

“Imagine there’s a choice Congress has to make.  We’re standing before two doors, and have to pick one.  Behind door number one is a choice the Chairman of the Federal Reserve calls ‘catastrophic.’

“The Secretary of the Treasury says that if we open that same door, it could lead to a financial crisis ‘more severe than the crisis from which we are only now starting to recover.’

“And the majority of the American people we represent say opening that door would be ‘disastrous.’  Not just a bad idea, not one that would lead to discomfort – but one that would lead to disaster.

“It wouldn’t be just irresponsible to make that choice.  We would be out of our minds.

“Well, we’re going to have to make up our minds sooner rather than later.  That’s because today, America has hit a milestone, but it isn’t one anyone’s celebrating.  Today is the day we hit our debt limit, which means we’ve reached the maximum amount the United States is allowed to borrow.

“It means that with each passing day, we’re that much closer to the disaster that would come from defaulting on our debts – the day we would forfeit, for the first time ever, the full faith and credit of the United States.

“This is the crisis Chairman Bernanke called ‘catastrophic,’ what Secretary Geithner warned would make the Great Recession look small, and what the American people demand we avoid.

“Defaulting on our obligations would be unprecedented.  But it’s not unavoidable.  We can be responsible leaders and choose to open the other door.  It might not be ideal, but we have to make a choice.  And door number two is a much better, safer and smarter choice.

“Let’s be clear about what the debt limit does and doesn’t mean.  Raising the debt limit when it’s absolutely necessary – and right now, it is – lets us pay the bills that have already come due.

“We borrow a lot of money in this country.  That’s not a new phenomenon, or unique to one party.  It’s how America has done business for centuries.  And borrowing a lot of money means we owe a lot of money.  We cannot cut off our own ability to pay those debts.

“Here’s what it doesn’t mean.  The emergency we enter today isn’t about a penny of new spending.  It’s not about new programs or new taxes.  It’s not about creating new obligations, only meeting existing ones.  The debt limit is about paying what we already owe.

“If we don’t act – if we allow the United States to default – the day of reckoning will be much, much worse than today.  Things will be much, much worse for Americans jobs, families and businesses than they already are.  And the fallout will be felt around the world.

“Right now, a lot of people are reaching for that first door – the one that leads to catastrophe and crisis.  They’re looking at this choice through a political lens, not an economic lens.  And they’re willing to risk the strength of our economy just to make a political point.

“We can’t afford to play these political games and trigger a default crisis that would lead to catastrophe.  We can’t afford to make unrealistic demands or hold hostage policies that affect real people.

“Speaker Boehner recently asked everyone to act like adults and reach a solution.  I second that request.  Let’s open the second door, and honor our obligations.

“Once we avert this crisis, we can have another important, adult conversation – a conversation about saving money.

“One good way to do that – not the only way, but a good, easy, obvious way – is to cut wasteful spending.  Taxpayer giveaways to companies pulling in record profits are the epitome of wasteful spending.

“We all know which companies I’m talking about – the five biggest oil and gas companies.  It’s time to take away incentives that they don’t need and we can’t afford.

“That’s the question that will come before the Senate this week.  It’s a question of fairness.

“The bonus checks taxpayers are writing to Big Oil are absurd and obscene.  They defy common sense.

“Big Oil isn’t hurting.  It doesn’t need a hand.  In the first three months of this year, the oil industry made $36 billion in profits alone.  Not revenues – profits.  That’s $12 billion a month.  That’s $3 billion a week.  That’s pretty good money.

“Meanwhile, the American taxpayer is giving these same successful companies $4 billion a year.

“So when you take these companies’ profits and add in the handout you, me and every taxpayer gives them, America is saying to Big Oil: You make $3 billion a week for 52 weeks, and we’ll basically give you a 53^rd week for free.

“But what about the average American taxpayer – the one who’s footing the bill for this Big Oil bonus?  ExxonMobil now pays a smaller share of its income in taxes than the average taxpayer.

“This isn’t because the average American is paying more in taxes – it’s because Big Oil is paying less.

“Over the last four years, since Democrats have controlled the Senate, we’ve cut taxes for middle-class families nine different times.  The Democratic Senate has passed a trillion-and-a-half dollars in tax cuts.  And now families pay less in federal taxes as a share of the economy since 1950, when Harry Truman was President.

“So this is a question of fairness – it’s about Big Oil paying its fair share.

“It’s also a question of priorities.  The people who want to keep giving their Big Oil buddies four billion taxpayer dollars a year are the same ones who want to take the social safety net away from the sick, seniors and the poor.  These people kick and scream about investing in cancer research, or protecting student loans that help so many afford the rising costs of college.

“But ask them to recognize the absurdity of giving Big Oil taxpayer money it doesn’t need, and they cover their eyes and plug their ears.  Ask them to defend it, and they can’t do it.

“That’s what happened last week.  The nation watched the Big Oil bosses try to defend it.  Frankly, they didn’t do a very good job.  It’s not their fault for doing so poorly – they were trying to defend an indefensible position.  But I do hold him responsible for holding that position.

“So this is a question of fairness and a question of priorities.  It’s certainly a question of economics.  But it is not a question of gas prices.

“Independent, nonpartisan experts – and even some of the CEOs themselves – say taking away these giveaways doesn’t have a thing to do with the price at the pump.  Anyone who claims otherwise is simply not telling the truth.

“Those distractions are disruptive to this debate.  So are gratuitous attacks on the patriotism of the debaters.

“One of these companies, ConocoPhillips, said using taxpayer money to pay down the deficit rather than pad Big Oil’s pockets was ‘un-American.’  That’s ConocoPhillips’ word, not mine.

“Attacking another’s patriotism has no place in this debate.  It’s offensive that this company has done that, and shameful that its CEO refuses to recant it or apologize for it.

“I disagree strongly with his position on this issue.  I disagree with his claim that only one side of this debate loves its country.  I question his sense of fairness, and I question his priorities.  But I don’t question his patriotism.  He shouldn’t question mine.”

STATEMENT FROM SENATOR CHARLES E. SCHUMER:

“The Speaker is entitled to his own opinions about how to reduce our debt, but not his own facts. We will never cure what ails our economy

if the Republicans keep misdiagnosing the problem because of their ideological blinders.”

WHAT THEY’RE SAYING ABOUT BOEHNER SPEECH …

Washington Post: Boehner’s Remarks Undergirded By a “Incoherent, Impervious-to-Fact Economic Philosophy.” “Even more alarming, because it has consequences beyond the debt-ceiling debate, is the incoherent, impervious-to-facts economic philosophy undergirding Boehner’s remarks…Listening to Boehner, I began to think the country suffers from two deficits: the gap between spending and revenue, and the one between reality and ideology. The first cannot be solved unless we find some way of at least narrowing the second.”  [Washington Post, Marcus Column, 5/10/11]

New York Times: Boehner Speech Devoid of Accurate Diagnosis or Rigorous Prescriptions for the Debt Issue. “Even before the White House and the Republicans began talks on the debt limit, John Boehner made clear that he was looking for a political fight, not a compromise. There is no way to solve the country’s fiscal ills without an accurate diagnosis and rigorous prescriptions for a cure. Mr. Boehner’s speech was devoid of both… [Boehner’s argument] makes no economic sense.” [New York Times, Editorial, 5/10/11]

Bloomberg: Boehner’s Views on Economy Contradicted by Studies.  “House Speaker John Boehner, giving Wall Street leaders his prescriptions for growing the U.S. economy and reducing the nation’s debt, built his case on several assertions that are contradicted by market indicators and government reports.”  [Bloomberg, 5/11/11]

BOEHNER’S RHETORIC VS. REALITY

Boehner Rhetoric:

“We’re calling for an end to the government spending binge that is crowding out private investment and threatening the availability of capital needed for job creation.” [Boehner Speech, 5/9/11]

Reality:

Business Investment Up Over 15 Percent in 2010 and up over 11 Percent in First Quarter of 2011. [Bloomberg, 5/11/11]

Economist: Very Hard to Come to a Conclusion That There’s Any Kind of Crowding Out. Nariman Behravesh, chief economist of IHS Inc., a research firm based in Englewood, Colorado  said, “Look at interest rates. Look at capital spending.  It’s very hard to come to a conclusion that there’s any kind of crowding out.”  [Bloomberg, 5/11/11]

Boehner Rhetoric:

“The recent stimulus spending binge hurt our economy and hampered private sector job creation in America.”  [Boehner Speech, 5/9/11]

Reality:

Non Partisan Congressional Budget Office: The Bipartisan American Recovery and Reinvestment Act…

·         Raised GDP by up to 3.5 Percent.

·         Decreased Unemployment Rate by up to 1.9 Percentage Points.

·         Increased the Number of Employed People by up to 3.5 million.

·         Increased the Number of Jobs by up to 5 Million Than Otherwise Would Have Been Created. [CBO, 2/23/11]]

BLS 2.1 million Jobs Created Since February 2009. [Bureau of Labor Statistics, 5/6/11]

Boehner Rhetoric:

“It’s possible to make changes in a way that will ensure future beneficiaries will have access to the same kinds of options as Members of Congress currently have.  The budget put forth by our Budget Committee Chairman, Paul Ryan of Wisconsin, accomplishes this.” [Boehner Speech, 5/9/11]

Reality: CBO Projection: GOP Plan Covers Seniors’ Health Benefits at Less Than Half the Amount They Cover for Members of Congress. “The CBO projected in an April 5 report that under the Republican plan, by 2030 the government would pay 32 percent of the health-care costs of a typical 65-year-old. The U.S. Office of Personnel Management’s benefit handbook says the government pays as much as 75 percent of the health-care costs of federal workers, including members of Congress.”  [Bloomberg, 5/11/11; CBO, 4/5/11]

STATEMENT FROM SENATOR CHARLES E. SCHUMER:

“The Speaker is entitled to his own opinions about how to reduce our debt, but not his own facts. We will never cure what ails our economy

if the Republicans keep misdiagnosing the problem because of their ideological blinders.”

WHAT THEY’RE SAYING ABOUT BOEHNER SPEECH …

Washington Post: Boehner’s Remarks Undergirded By a “Incoherent, Impervious-to-Fact Economic Philosophy.” “Even more alarming, because it has consequences beyond the debt-ceiling debate, is the incoherent, impervious-to-facts economic philosophy undergirding Boehner’s remarks…Listening to Boehner, I began to think the country suffers from two deficits: the gap between spending and revenue, and the one between reality and ideology. The first cannot be solved unless we find some way of at least narrowing the second.”  [Washington Post, Marcus Column, 5/10/11]

New York Times: Boehner Speech Devoid of Accurate Diagnosis or Rigorous Prescriptions for the Debt Issue. “Even before the White House and the Republicans began talks on the debt limit, John Boehner made clear that he was looking for a political fight, not a compromise. There is no way to solve the country’s fiscal ills without an accurate diagnosis and rigorous prescriptions for a cure. Mr. Boehner’s speech was devoid of both… [Boehner’s argument] makes no economic sense.” [New York Times, Editorial, 5/10/11]

Bloomberg: Boehner’s Views on Economy Contradicted by Studies.  “House Speaker John Boehner, giving Wall Street leaders his prescriptions for growing the U.S. economy and reducing the nation’s debt, built his case on several assertions that are contradicted by market indicators and government reports.”  [Bloomberg, 5/11/11]

BOEHNER’S RHETORIC VS. REALITY

Boehner Rhetoric:

“We’re calling for an end to the government spending binge that is crowding out private investment and threatening the availability of capital needed for job creation.” [Boehner Speech, 5/9/11]

Reality:

Business Investment Up Over 15 Percent in 2010 and up over 11 Percent in First Quarter of 2011. [Bloomberg, 5/11/11]

Economist: Very Hard to Come to a Conclusion That There’s Any Kind of Crowding Out. Nariman Behravesh, chief economist of IHS Inc., a research firm based in Englewood, Colorado  said, “Look at interest rates. Look at capital spending.  It’s very hard to come to a conclusion that there’s any kind of crowding out.”  [Bloomberg, 5/11/11]

Boehner Rhetoric:

“The recent stimulus spending binge hurt our economy and hampered private sector job creation in America.”  [Boehner Speech, 5/9/11]

Reality:

Non Partisan Congressional Budget Office: The Bipartisan American Recovery and Reinvestment Act…

·         Raised GDP by up to 3.5 Percent.

·         Decreased Unemployment Rate by up to 1.9 Percentage Points.

·         Increased the Number of Employed People by up to 3.5 million.

·         Increased the Number of Jobs by up to 5 Million Than Otherwise Would Have Been Created. [CBO, 2/23/11]]

BLS 2.1 million Jobs Created Since February 2009. [Bureau of Labor Statistics, 5/6/11]

Boehner Rhetoric:

“It’s possible to make changes in a way that will ensure future beneficiaries will have access to the same kinds of options as Members of Congress currently have.  The budget put forth by our Budget Committee Chairman, Paul Ryan of Wisconsin, accomplishes this.” [Boehner Speech, 5/9/11]

Reality: CBO Projection: GOP Plan Covers Seniors’ Health Benefits at Less Than Half the Amount They Cover for Members of Congress. “The CBO projected in an April 5 report that under the Republican plan, by 2030 the government would pay 32 percent of the health-care costs of a typical 65-year-old. The U.S. Office of Personnel Management’s benefit handbook says the government pays as much as 75 percent of the health-care costs of federal workers, including members of Congress.”  [Bloomberg, 5/11/11; CBO, 4/5/11]

House GOP’s ‘Escalating’ Threats On Debt Ceiling Ring Hollow Since Reckless Budget GOP Passed Just Last Week Calls For More and More Borrowing Into Future

HOUSE GOP IS ‘ESCALATING’ THREATS TO NOT RAISE DEBT CEILING …

Politico: ‘Republicans Escalate Demands on Debt Ceiling.’ “One day after being named to a presidential task force to negotiate deficit reduction, House Majority Leader Eric Cantor fired off a stark warning to Democrats that the GOP ‘will not grant their request for a debt limit increase’ without major spending cuts or budget process reforms.” [Politico, 4/20/11]

… BUT, IN AN INCONVENIENT TWIST SURE TO UPSET TEA PARTY, HOUSE GOPBUDGET APPROVED LAST WEEK ALREADY CALLS FOR DEBT LIMIT INCREASES

House GOP Budget Would Raise the Debt Limit By More Than 60%, to $23.1 Trillion.The federal debt ceiling currently stands at $14.3 trillion. Under the House Republican budget, the amount of public debt subject to the limit would be $23.1 trillion in Fiscal Year 2021, meaning the GOP plan forces an $8.8 trillion in additional debt – an increase of more than 60% – over ten years. [H. Con. Res. 34 (Page 5); Los Angeles Times, 4/15/11]

LA Times: ‘Do House Republicans Realize They Just Endorsed a Higher Debt Limit?’“As far as I could tell, no amendments were offered to reduce the levels of spending outlined in the budget to hold that level of debt at or below $14.3 trillion. So, I guess that means Republicans won’t object to raising the current debt ceiling within the next few weeks so that the federal government can honor the commitments it has already made?” [Los Angeles Times, 4/15/11]

If They Had Not Changed Their Own Rules, GOP Budget Vote Last Week Would Have Been a Vote to Raise the Debt Limit. “Under House Rule XXVII (commonly referred to as the Gephardt rule after its author, former Representative Richard Gephardt), a joint resolution specifying the amount of the debt limit contained in the budget resolution automatically is engrossed and deemed to have passed the House by the same vote as the conference report on the budget resolution, thereby avoiding a separate vote on the debt-limit legislation.” That means that, under the Gephardt rule, the House Republican budget passed last Friday would have been considered a vote to raise the debt limit. When Republicans took control of the House of Representatives in January 2011, they eliminated the so-called Gephardt rule. [CRS, 6/26/08; Washington Post, 1/5/11]

GOP BUDGET NOT ONLY ENDORSES IMMEDIATE $2T HIKE IN DEBT LIMIT, IT CALLS FOR NEARLY $9T IN INCREASES OVER NEXT DECADE

[H. Con. Res. 34 (Page 5)]

Washington, D.C. – Nevada Senator Harry Reid made the following statement today regarding budget negotiations. Below are his remarks as prepared for delivery:

“Republicans in the House have a very clear choice to make – and not much time to make it.

“They can keep their word on our agreement to significantly cut the budget and the deficit – or they can shut down America’s government over women’s access to cancer tests.

“If that sounds ridiculous, that’s because it is.

“The federal budget is complex.  This choice should be simple.  A lot of the cuts in our proposal were tough choices.  This choice should be easy.

“We use the word ‘riders’ around here.  Let’s remember what’s really riding on Republicans’ choice:

“If the government shuts down over women’s access to cancer screenings, our fragile economy will reverse its momentum.  In five weeks, our GDP could lose a whole percentage point.

“Our intelligence and diplomatic activities around the world would be damaged – and our image and credibility would be severely hurt.

“Families won’t be able to get home loans.  Small businesses won’t be able to get the loans they need.  Taxpayers won’t get their tax refunds.

“A federal government shutdown doesn’t mean they lock the doors to the Capitol building in Washington.  It has real consequences for everyday Americans all over the country.

“All this to stop women from getting the regular tests and preventative services that could save their lives?  What a terribly sad statement.

“If Speaker Boehner can’t sell that to his fellow Republicans in the next few hours, it will be crystal clear to the American people that Democrats were reasonable and Republicans were responsible for the shutdown.

“The issue here is funding for local health clinics that provide services like cancers tests that save women’s lives and save money down the road by catching diseases that are expensive to treat.

“The fact that Republicans have made this about women’s health – and not about money, or anything controversial – is a shame.”

“We’re now 38 hours away from the deadline.  We have fewer than two days to put politics aside, put the American people first and reach an agreement.

“Last night, Speaker Boehner and I met again with the President.  We met for more than an hour and a half.  The meeting was adequate.

“Then we worked through the night – my staff and the President’s people continue to work together.

“We are very close on the numbers.  Our differences are no longer over how much savings to get out of government spending.

“The only thing – the only thing – holding up agreement is that the Republicans are drawing the line on ideology.

“The Republicans are insisting on extraneous restrictions on women’s health in the name of abortion.  They want to roll back the Clean Air Act.

“These matters have no place on a budget bill.  This is a bill to keep the country running.  It is not a family planning bill or an environmental bill.

“The bottom line is this: I can see us sitting down at the negotiating table and coming away with an agreement on numbers.

“But no one can realistically think that we will walk out of a room and suddenly agree to roll back women’s access to health care or protections for the environment.  We will not solve in one night a disagreement this country has been having for four decades.  That’s not realistic.

“Right now, we have to be realistic.  We cannot be distracted by ideology.

“Speaking of distractions, the House is going to pass a short-term stopgap today.  As I said here last night, that is a non-starter in the Senate.

“It’s not just bad policy – it’s fantasy.  We all heard the President say that he won’t accept anything short of a full solution.

“The President is right.  We can’t keep funding the country with one stopgap after another.  The United States of America shouldn’t have to live paycheck to paycheck.”

“We have narrowed the issues, however, we have not yet reached an agreement. We will continue to work through the night to attempt to resolve our remaining differences.”

Washington, D.C. – A group of 16 moderate Democratic senators, led by Mark Udall of Colorado, today sent a letter to House Speaker John Boehner, urging him to prevent a shutdown of the federal government that would hurt our country’s still-fragile economy and distract from the need to work together to address greater, long-term fiscal challenges.  The senators agree that addressing the nation’s debt requires urgent action, and they added their voices to those who are extremely concerned that a minority in the Republican Party are pushing for a government shutdown solely to assert a political point.

In addition to Mark Udall, the letter was signed by senators Tom Carper (DE), Michael Bennet (CO), Kay Hagan (NC), Tim Johnson (SD), Mark Begich (AK), Jon Tester (MT), Mark Warner (VA), Ben Nelson (NE), Kent Conrad (ND), Jim Webb (VA), Amy Klobuchar (MN), Mary Landrieu (LA), Claire McCaskill (MO), Bob Casey (PA), and Chris Coons (DE).

Not only would a shutdown distract Congress from focusing on a comprehensive, bipartisan approach to debt reduction, economists have warned that it would stunt productivity, erode confidence in the U.S. economy and hamper job growth, the senators wrote.  At a time when the economy is still recovering, they said, the federal government and Congress “should be single-mindedly focused on supporting economic development and job growth.”  Senate Democrats have shown significant flexibility, agreeing to Republicans’ original proposal to keep the government running through the year while protecting jobs.

“Knowing that a bipartisan deal is within reach to cut tens of billions of dollars from current funding levels, it would be irresponsible to shut down the government and punish our constituents solely to assert a political point,” the senators continued.  “We stand ready to resolve this short-term funding debate in a common-sense way and work with you on tackling the even more daunting fiscal challenges our country must confront.  The American people expect no less.”

A copy of the letter follows:

Dear Speaker Boehner,

We recognize the difficult task you face in seeking a budget compromise for the remainder of Fiscal Year 2011.  While we all agree that Congress must address our long-term structural deficits, we also share a responsibility to govern, support the economy and provide critical services for the American people.

Although we have had 13 straight months of private-sector job growth and added 1.8 million such jobs in that time, the U.S. economy is still fragile and too many Americans continue to struggle.  The federal government and Congress should be single-mindedly focused on supporting economic development and job growth.  But some members within your caucus continue to seek sustained confrontation and are interested in shutting down the government as a misguided sign that they are serious about debt reduction.

However, a government shutdown at this time will only serve as a counterproductive attack on our economic recovery.  Economists note that a suspension of services would have a measurably detrimental impact on our economic output, while business leaders warn about a shutdown’s impact on confidence in the U.S. economic recovery.  A setback of this nature would prevent the growth we need to tangibly address our long-term fiscal imbalances.  Knowing that a bipartisan deal is within reach to cut tens of billions of dollars from current funding levels, it would be irresponsible to shut down the government and punish our constituents solely to assert a political point.

We know you understand the importance of this issue and share our desire to avoid shocks to our fragile economy that would inhibit job growth and hurt our fellow citizens.  We stand ready to resolve this short-term funding debate in a common-sense way and work with you on tackling the even more daunting fiscal challenges our country must confront.  The American people expect no less.

Washington, DC—Nevada Senator Harry Reid made the following remarks today regarding budget negotiations. Below are his remarks as prepared for delivery:

“As the deadline looms, our budget negotiations continue nonstop.  The Speaker and I met with the President yesterday morning, and we met with one another yesterday afternoon.

“Like in any ongoing negotiation, the status of those talks is constantly evolving.  But I’ll give the Senate a snapshot of where we stand at this moment in time.

“Our bottom line has been the same all along.  It is this: We want to avoid a shutdown.  We want to pass a budget that makes smart cuts – cuts that save money, but that don’t cost jobs.  This has been our bottom line throughout this process.

“So we’ve made tough choices.  We’ve made those choices because we know that at this late stage of the game, reality is more important than ideology.  We know that sacrifices are the cost of consensus, and we think they’re worth it.

“Our bottom line hasn’t changed because our objective hasn’t changed: We want to keep the country running and keep the momentum of an economic recovery that’s creating jobs.

“I wish I could say the same about those on the other side of the negotiating table.  The Republicans’ bottom line has changed at almost every turn.

“First, Republicans refused to negotiate until we tried it their way.  We gave the reckless House-passed proposal was a vote.  The Senate resoundingly rejected it.

“Then, once talks began, Republicans staked out their position: they asked for $73 billion in cuts.  When we said, ‘Let’s meet in the middle,’ they said, ‘No.’  Then we said, ‘In the interest of getting this done, we’ll agree to your number.’  And still they said, ‘No.’  Republicans refused to take yes for an answer.

“Every time we agree to meet in the middle, they move where the middle is.  They said no when we met them halfway.  Now they say, ‘It’s our way or the highway.’  That’s no way to move forward.

“People ask why this is so difficult.  They ask, ‘Can’t you just get it done?’  I understand and share their frustration.  But this is why it’s so tough.  It’s like trying to kick a field goal through moving goalposts.

“Democrats’ bottom line hasn’t changed.  Republicans’ bottom line hasn’t stayed still.

“Our bottom line hasn’t changed because our priorities haven’t changed.

“We all want to lower the deficit.  But Democrats will not sacrifice seniors’ retirement security, women’s health, our children’s education or our nation’s veterans.  The cuts we make have to be smart cuts, and those aren’t smart.  They’re radical.  We want an agreement that’s reasonable and responsible.

“I wish I could say the same about those on the other side of the negotiating table.  They forget that not one of these people led us into recession – and punishing seniors, women, children and veterans will not lead us to recovery.  Their budget would cost 700,000 jobs and slow economic growth.  It would take us backward, not forward.

“That’s as counterproductive as it comes.  The point of this entire exercise is to help the economy.  Democrats won’t stand for a budget that weakens it.

“Our bottom line – our strong desire to reach an agreement – hasn’t changed because our willingness to compromise hasn’t changed.

“We long ago accepted the reality that getting something done means not getting 100 percent of what we want.  We long ago accepted the fact that the only way to reach consensus between a Democratic Senate and a Republican House is to compromise.

“I wish I could say the same about those on the other side of the negotiating table.  The Republicans have demanded a budget that can pass with only Republican votes.  Instead of seeking a bipartisan budget, they are actively seeking the opposite.

“The Republican Leadership has the Tea Party screaming so loudly in its right ear that it can’t hear what the vast majority of the country demands.  The country demands we get this done.

“As I’ve said before, the biggest gap in these negotiations isn’t between Republicans and Democrats.  It’s between Republicans and Republicans.

“So the Speaker has a choice to make, and not much time to make it: He can do either what the Tea Party wants, or what the country needs.

“I’ll close with two pieces of advice we would we be wise to heed today – one from American history, and one from ancient history.

“Henry Clay served in both houses of Congress.  He actually held the same seat the Republican Leader holds – he was a Senator from Kentucky.  He also held the same gavel that Speaker Boehner now holds – at three different times, Henry Clay served as Speaker of the House.  In his esteemed career he earned the nickname ‘The Great Compromiser.’

“So Henry Clay knew what he was talking about when he said that ‘all legislation is founded upon the principle of mutual concession.’  This legislation – this budget – is no exception.

“But it’s important to remember that the most important word in that quote isn’t ‘concession.’  It’s ‘mutual.’  We all have a responsibility to be reasonable.

“Which brings me to the second piece of advice: To everything, there is a season.

“To paraphrase a passage we all know well – a passage much older than the old statesman Henry Clay: There’s a time to campaign, and a time to govern.  There’s a time to be partisans, and a time to be partners.

“We stand here with fewer than 72 hours on the clock.  It’s time to get to work.  It’s time to get the job done.  This is the season for action.”

“While Republicans ratchet up their rhetoric and once again threaten to shut down the government, Democrats remain focused on finding common ground and working out a bipartisan compromise that cuts government spending while protecting jobs. As Sen. Reid said, we are making progress as we work to cut more than $70 billion in government spending.  As we get closer to a final agreement, we are confident that in the end Republicans will reject cries from the Tea Party to shut down the government and work with us on a solution that makes smart cuts while protecting our economy’s recent gains.”

“The time we have left to work on a budget agreement is short.  The window in which we can avoid the terrible consequences of a shutdown is closing quickly.  It is no longer measured in months or weeks.  We are now just days away from the deadline.  And the time we have to get the long legislative process started in both houses is measured in mere hours.

“It’s clear that those sitting at the negotiating table have different priorities.  That’s true of any negotiation.  But we all should share the same goal: to keep the country running, and to keep the momentum of our economic recovery.  And we all want to cut the deficit.

“Last week we agreed upon a number on which to base our budget cuts – $73 billion below the President’s proposal.  But disagreements remain on where we should make those cuts.  We worked through the weekend to bridge the gap.  We’ve made some progress, but we’re not there yet.

“There is another way in which the sides remain separated.  Democrats have demonstrated throughout this process that we are willing to meet in the middle.

“But Republicans and the Tea Party continue to reject reality, and insist instead on ideology.  Let me give the Senate two examples.

“First, they refuse to recognize that H.R. 1 – that is, the budget the House passed – isn’t going to happen.  The Tea Party pushed it through the House, over the objections of some Republicans and all Democrats.  Then the Senate soundly defeated it, and we all know the President would never sign it into law.

“So the Republican Party and the Tea Party need to admit what Democrats have proven and what the country already knows: That neither party can pass a budget without the other party, and neither chamber can send it to the president without the other chamber.  Democrats stand ready to meet Republicans halfway, and the Senate stands ready to meet the House halfway.  We hope our partners on the other side are willing to be just as reasonable.

“Second, Tea Party Republicans refuse to recognize that their budget is a simply appalling proposal.  They stomp their feet and call ‘compromise’ a dirty word, and insist on a budget that will hurt America rather than help it.

“It slashes programs for the sake of slashing programs.  It chops zeroes off the budget for nothing more than bragging rights.  The authors and advocates of the Republican budget either completely ignore the practical impact of their dangerous cuts, or they know the damage they will do and simply don’t care.  Either way, it’s not right.

“Their budget won’t do a thing to lower unemployment.  In fact, it will cost the country 700,000 jobs through 2012.  That’s not my estimate – that’s the estimate of the head of Moody’s, an independent economist who has worked for both parties.

“It will also hurt seniors.  It slashes funding for the Social Security Administration, which means seniors and disabled Americans who count on the benefits they’ve earned over a lifetime of hard work will have to wait for them.  In many cases, those Social Security checks are seniors’ only source of income.  In some cases, they’re the only thing keeping them out of poverty.  And those checks have nothing at all to do with the deficit.  Nothing.

“The Republican budget will hurt women and their families.  It cuts nutritional programs for women, infants and children.  It makes cuts to Planned Parenthood that are based on ideology, not economics.  Planned Parenthood doesn’t contribute to the deficit – it contributes in great measure to the health and safety of women of every age, in every state.

“Their budget also will hurt our veterans.  There is a successful program in this country that helps homeless veterans afford housing.  Democrats think our nation’s veterans deserve a roof over their heads, and we think it’s a worthy program.  The Republican budget cuts it.

“It will also hurt students.  The Tea Party plan kicks hundreds of thousands of boys and girls out of Head Start, cuts college students’ Pell Grants and slashes job-training programs.  That’s no way to recover.

“And independent economists have analyzed the Tea Party’s plan and found that it will actually slow economic growth.  The point of this whole exercise is to help the economy.  Democrats will not stand for a budget weakens the economy.

“None of the people I’ve just mentioned led us to recession.  Punishing innocent bystanders like seniors, women, veterans and students will not lead us to recovery.

“This is what we mean when we say their budget is based on ideology, and not reality.  This is what we mean when we say the Republican and Tea Party budget cuts irresponsibly.  And when they refuse to relent on these dangerous cuts – many of which have nothing to do with the deficit – that’s what we mean when we say the other side simply isn’t being reasonable.

“Our national budget reflects our values and the tough choices we make.  Democrats have made many tough choices because we know that sacrifices are the cost of consensus – and we believe they’re worth it.  But we’ve never forgotten that what we cut is more important than how much we cut.

“In addition to the many choices about what to cut and what to keep, the Republican Leadership has another very big choice to make: It has to decide whether it will do what the Tea Party wants it to do, or do what the country needs it to do.

“I’m hopeful it will make the right choice and that we can come to an agreement.  But the bottom line is this: At the end of the day we’re all on the same side.  Time, however, is not on our side.”

“A compromise on the budget is right there for the taking, assuming the Speaker still wants one. We take it for granted that because of the intense political pressure being applied by the Tea Party, the Speaker needs to play an outside game as well as an inside game. As long as he continues to negotiate, it’s OK by us if he needs to strike a different pose publicly. Since last week, the two sides have made steady progress on a package of $33 billion in cuts. This is an historic level of spending cuts, it is the halfway mark between the two sides, and the Speaker has already agreed to this number privately. Differences may remain over where exactly the cuts should come from, but the only real question left is whether the political will exists to buck the Tea Party. At this point, we are so far down the road towards an agreement, and so little time remains before Friday’s deadline, that it would be a dramatic about-face for the Speaker to suddenly let things devolve into a shutdown, as many in the Tea Party are urging. As a result, we remain hopeful a deal will be reached.”

Washington, DC—Nevada Senator Harry Reid made the following remarks today regarding budget negotiations. Below are his remarks as prepared for delivery:

“We’re continuing to work hard to avoid the terrible consequences that would come with a shutdown.

“As Vice President Biden announced last night, Democrats and Republicans have agreed upon a number on which to base our budget cuts – $73 billion below the President’s budget proposal.

“Now we have to figure out how to get there.

“But as I’ve said all along, this isn’t just about dollars and deficits.  It’s about principles and priorities.  What we cut is much more important than how much we cut.

“The media is very concerned with which party will win this fight politically.  I’m much more concerned with making sure the America people don’t lose out.

“Let me once again remind the Senate: children, students, teachers, nurses and seniors would be significantly hurt by the cuts in the Republican-passed H.R.1.  But not a single child, not a single student, not a single teacher, not a single nurse and not a single senior led us to recession.  And punishing innocent bystanders will not lead us to recovery.

“We’ll continue talking and continue working to find a middle ground.  I hope an agreement can be reached.  But it will not come on the backs of middle-class families and the jobs they need.  And it will not come if the other side continues to insist on unreasonable and unrealistic cuts.

“I appreciate Speaker Boehner’s participation in these talks.  I’m sure it’s not easy trying to negotiate with the Tea Party screaming in his right ear.

“We have a lot more work to do.  I hope that this latest development is the beginning of the end of this crisis.”

“I am extremely disappointed that after weeks of productive negotiations with Speaker Boehner, Tea Party Republicans are scrapping all the progress we have made and threatening to shut down the government if they do not get all of their extreme demands. The division between the Tea Party and mainstream Republicans is preventing us from reaching a responsible solution on a long-term budget that will make smart cuts while protecting American jobs, and prevented negotiations from taking place over the weekend even as the clock ticks toward a government shutdown. Apparently these extremists would rather shut down the government and risk sending our economy back into a recession than work with Democrats or even their own leadership to find a responsible compromise.

“For the sake of our economy, it’s time for mainstream Republicans to stand up to the Tea Party and rejoin Democrats at the table to negotiate a responsible solution that cuts spending while protecting jobs.”

“I am glad that we were able to come to an agreement with Republicans on a three-week Continuing Resolution made up of cuts already proposed by Democrats that will also be free of any ideological, special-interest legislation. However, we can’t continue to run our government two or three weeks at a time. I believe it’s crucial that we avoid a government shutdown, but continually resorting to stopgap spending bills is bad long-term policy and could be bad for our economy. If Republicans are serious about cutting the deficit, they should be open to new solutions and ideas instead of clinging to extreme policy positions. It’s time to work together toward a long-term solution that makes smart, responsible cuts but doesn’t threaten our economic future.

“This week’s Senate vote sent a clear message that the Republicans’ irresponsible, $100 billion plan to slash aid for homeless veterans, kick kids out of Head Start and risk border security simply won’t fly. It’s too dangerous for our recovering economy and would cost 700,000 American jobs. So, with the clock ticking, it’s time for Republicans to do what they have been avoiding: come to the table with a serious proposal and a willingness to work with us on a long-term budget free of extraneous legislation.”

By Lisa Lerer - Feb 17, 2011 3:16 PM ET

·

Former Alaska Governor Sarah Palin, weighing a presidential bid next year, said she opposes raising the U.S. debt ceiling and welcomes a government shutdown in the fight over federal spending.

Speaking today to business executives and civic leaders in Woodbury, New York, Palin said Republicans shouldn’t be deterred by Democratic “scare tactics” over a possible government shutdown.

It would force President Barack Obama to work with Republicans, she said. “Not necessarily would that be a bad thing on either side.”

The U.S. debt is projected by the Treasury Department to reach its authorized ceiling of $14.3 trillion within a few months, setting the stage for a congressional showdown over lifting the borrowing limit. Also, current government funding runs out March 4 as lawmakers battle over the budget for the rest of the fiscal year that ends Sept. 30.

Raising the debt ceiling isn’t the answer, Palin said as she took questions from a meeting held by the Long Island Business Association, one of New York’s largest business groups.

“To me, all that’s going to do is create this allowance for more big spenders to get in there,” she said. “It’s an overstatement to say that we are even making a dent in the national debt,” she said. Obama’s “spending plan does add to the debt, and it does allow in the next 10 years, still, deficit spending.”

Obama on Feb. 14 proposed a $3.7 trillion budget for next fiscal year. Republicans said they will demand deeper cuts.

Palin said she hasn’t made up her mind about running for president in 2012. She said her decision last week to hire a chief of staff was intended to help better organize her professional life.

“To tell you the truth, Todd is getting tired of doing it all for me,” she said, referring to her husband.

http://www.bloomberg.com/news/2011-02-17/palin-says-shutdown-of-government-may-spark-will-to-fight-rising-u-s-debt.html

Even though Republican Senators have historically been among the strongest and most vocal champions of such “earmarks,” many are now threatening to vote no on this bill in order to appease certain factions of the Republican party.  Moreover, Republicans are now using the deficit as an excuse to oppose $8 billion for Congressionally-directed funding, even though they did not care about exploding the deficit in order to fight for $830 billion in extra tax breaks for the wealthiest few._[2]

$8 billion for local projects (including aid for hospitals, battered women, law enforcement, foster children, job training for homeless families, small business incubators)	$830 Billion in Extra Tax Breaks for the Wealthiest Few

Supposedly outraged Senate Republicans must have forgotten that Congressionally-directed spending requests have been online for six months, that this bill was put together in bipartisan fashion, and that Congressionally-directed spending has decreased by 75 percent since Democrats took control of the Senate._[3] In fact, it was Democrats who put a stop to the earmark abuse that festered while Republicans controlled the White House and Congress for six years.

Below are just a few examples of the recent Congressionally-directed funding that Republican Senators have sponsored.  Will the Senate GOP vote against the upcoming appropriations bill just to appease the right wing of their party – and despite that fact that doing so will kill valuable new funding for their constituents back home?

Alabama

• Children’s services provided by United Methodist Children’s Home of Alabama and West Florida in Selma, AL [FY2010]
• Services for homeless families provided by the Jimmie Hale Mission in Birmingham, AL [FY2009]
• After school math and science tutoring programs provided by the Cleveland Avenue YMCA, in Montgomery, AL [FY2009]

Arizona

• Fire/crash rescue station, in Davis-Monthan Air Force Base [FY2009]
• Mobile prenatal clinic for the MoMobile program at the Saint Joseph’s Hospital, in Phoenix, AZ [FY2008]
• Law enforcement initiative to target meth in the San Carlos Apache Reservation [FY2008]

Georgia

• Assistance for survivors of domestic violence and sexual assault, provided by the YWCA of Northwest Georgia [FY2009]
• Douglas County Court Team for maltreated infants and toddlers, in Douglasville, GA [FY2010]
• Small business incubator at the University of West Georgia, Carrollton, GA [FY2010]
• A Child is Missing, to assist law enforcement in finding missing children in Georgia [FY2008]

Idaho

• Idaho State Police’s participation in the Criminal Information Sharing Alliance Network [FY2010]
• Dental services for low-income children [FY2010]
• Child neglect and abuse prevention at the Nez Perce Tribe [FY2009]
• Educational materials for the Literacy Matters! Program [FY2008]

Iowa

• Dislocated worker training and job placement in financial services, health care, and construction [FY2010]
• Multi-tier interdiction initiative to combat drug distribution networks [FY2009]
• Coordinated care for abused and neglected infants and toddlers [FY2009]
• Housing and vocational education program for older foster children [FY2008]

Kentucky

• Severe weather warning sirens in populated areas of Henderson County, where no systems currently exist [FY2009]
• Heart disease prevention initiative in rural Kentucky [FY2010]
• Technology to assist trauma victims without immediate access to emergency medical care [FY2008]

Louisiana

• Pre-natal clinic at the CHRISTUS St. Francis Cabrini Hospital, in Alexandria, LA [FY2009]
• Community Nursing Elder Trauma Response Program demonstration project in Metairie, LA [FY2009]
• Mobile unit for the Miles Perret Cancer Services, in Lafayette, LA, to use in rural areas [FY2009]

North Carolina

• Program to combat domestic violence in Mecklenburg County, NC [FY2008]
• Racial disparities and cardiovascular disease initiative at the University of North Carolina, Chapel Hill, NC [FY2010]
• Regional public safety communications systems, for use by the City of Fayetteville, NC [FY2010]

South Dakota

• Meth reduction programs sponsored by the Minnehaha County Sheriff’s Office [FY2008]
• Residential substance treatment center for women and their children in Sioux Falls, SD [FY2009]

Tennessee

• Joint effort by the University of Memphis, Shelby County, the City of Memphis, and the State District Attorney General to deal with growing gang numbers and increased violent crime [FY2009]
• Facilities and equipment at the Jellico Community Hospital in Jellico, TN [FY2010]
• The Gang and Violent Crime Reduction Program at the University of Memphis [FY2008]

Texas

• Homeless job training program in Bexar County, TX [FY2010]
• Juvenile delinquency prevention by Kids Averted from Placement Services [FY2008]
• Facilities and equipment including STAN fetal heart monitors at Harris County Hospital District, Houston, TX [FY2010]

Wyoming

• Efforts to fill gaps in substance abuse treatment and transitional services in the state [FY2009]
• Wyoming Meth Project for fighting the methamphetamine problem [FY2009]

[1] Senate Appropriations Committee, 12/14/10

[2] Center for American Progress, 7/29/10

[3] Senate Appropriations Committee