“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.

“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]