Obama calls for compromise amid stalemate in debt talks
President Barack Obama called on...
President Barack Obama called on the American public to pressure elected officials to work out a compromise to raise the federal debt ceiling and avoid a potentially devastating default, according to CNN.
A deal would allow the government to continue borrowing money to pay its debts after August 2.
The challenge came during the president`s seventh prime-time televised address Monday night.
The president singled out House Republicans for intransigence and said the political showdown is "no way to run the greatest country on Earth."
"The American people may have voted for divided government, but they didn`t vote for a dysfunctional government," Obama said. "So I`m asking you all to make your voice heard. If you want a balanced approach to reducing the deficit, let your member of Congress know. If you believe we can solve this problem through compromise, send that message."
Shortly after the president`s address, problems were reported on the web pages of at least two high-profile Republicans -- House Speaker John Boehner and Rep. Michele Bachmann.
An error message on Boehner`s site said "The web page cannot be found," and Bachmann`s website said the "Server is too busy."
"There were temporary issues with sites hosted by outside vendors -- many have been resolved," a spokeswoman for House Administration Committee said.
Both websites were operating normally by early Tuesday.
The president`s political speech was intended to convince an increasingly frustrated and concerned public that Obama`s approach to dealing with mounting deficits is better for working class Americans and the nation as a whole.
In a televised response, Boehner argued the opposite, saying in televised remarks that excessive government spending caused the problems the nation faces and cutting that spending is the only way to solve the problem.
"The sad truth is that the president wanted a blank check six months ago, and he wants a blank check today," Boehner said. "That is just not going to happen."
If Congress fails to raise the $14.3 trillion debt limit by August 2, Americans could face rising interest rates and a declining dollar, among other problems. As the cost of borrowing rises, individual mortgages, car loans and student loans could become significantly more expensive.
Officials also warn that, without an increase in the debt limit, the federal government will not be able to pay all its bills next month. Obama recently indicated he could not guarantee Social Security checks would be mailed out on time.
Months of increasingly tense negotiations have failed to bring a deal that can win approval from all of the necessary players -- the Republican-led House, Democratic-led Senate and the White House.
Obama has pushed for a comprehensive plan that included spending cuts, increased tax revenue and entitlement reforms, while Republicans sought to shrink government by proposing spending cuts and reforms without increased revenue.
Obama said "it`s not fair" to make massive cuts to programs affecting the poor and middle class without asking for sacrifices from wealthy Americans and large corporations as well. As he has in recent weeks, the president called for "a balanced approach" that includes large spending cuts along with revenue hikes -- including a halt to Bush-era tax cuts for families earning more than $250,000 a year -- to address the nation`s deficit.
"The only reason this balanced approach isn`t on its way to becoming law right now is because a significant number of Republicans in Congress are insisting on a cuts-only approach -- an approach that doesn`t ask the wealthiest Americans or biggest corporations to contribute anything at all," Obama said. "And because nothing is asked of those at the top of the income scales, such an approach would close the deficit only with more severe cuts to programs we all care about -- cuts that place a greater burden on working families."
To Boehner, the overall long-term health of the U.S. economy is the issue, and he showed no sign of moving off his party`s opposition to any kind of increase in taxes.
"The president has often said we need a `balanced` approach -- which in Washington means: we spend more . . . you pay more," Boehner said in his response. "Having run a small business, I know those tax increases will destroy jobs."
Earlier Monday, Democratic and Republican congressional leaders unveiled separate new proposals that the other side quickly rejected, demonstrating the cavernous partisan divide that exists.
Both plans -- one by Senate Majority Leader Harry Reid, D-Nevada, and the other by Boehner, R-Ohio -- provide a path to raise the debt ceiling through the end of 2012, but they differ in scope and over key components involving requirements for future congressional action.
Obama endorsed Reid`s plan, but acknowledged it has little chance of getting passed in the House, just as the competing Republican plan unveiled by Boehner is unlikely to get passed by the Senate.
The president pushed for the two parties to work out an acceptable deal, and called for Americans to demand that their congressional representatives put aside short-term politics to reach a compromise.
Reid`s blueprint calls for roughly $2.7 trillion in spending cuts over the next decade while raising the debt limit by $2.4 trillion -- an amount sufficient to fund the government through 2012, which means past next year`s election.
The plan excludes major provisions of a comprehensive deficit-reduction strategy, such as increased revenue and reforms to politically popular entitlement programs -- such as Medicare, Medicaid and Social Security -- that face skyrocketing growth in costs.
Specifically, Reid`s plan includes $1.2 trillion in savings from various domestic and defense programs, along with $1 trillion in savings from winding down the wars in Iraq and Afghanistan. It also generates $400 billion in interest savings on the debt, and another $40 billion by rooting out waste, fraud and abuse.
It also would establish a congressional committee made up of 12 House and Senate members to consider additional options for debt reduction. The committee`s proposals would be guaranteed a Senate vote with no amendments by the end of the year.
Obama immediately endorsed the Reid plan, with White House Press Secretary Jay Carney calling it a "responsible compromise ... that should receive the support of both parties."
Reid stressed that his plan doesn`t include tax hikes and would cut spending more than it increases the debt ceiling -- two key GOP demands.
"I hope my colleagues on the other side will still know a good deal when they see it. I hope they`ll remember how to say yes," Reid said. "Democrats have done more than just meet Republicans in the middle. We`ve met them all the way."
Boehner, however, argued at an afternoon news conference that Reid`s plan is "full of gimmicks."
The package "doesn`t deal with the biggest drivers of our deficits and debt, and that`s entitlement programs," Boehner said.
Boehner`s plan would require two separate votes by Congress. The first would approve approximately $1.2 trillion in spending cuts over the next decade while raising the debt ceiling through the end of 2011, two GOP leadership aides told CNN. Any failure on the part of Congress to enact the mandated spending reductions would trigger automatic across-the-board budget cuts.
The second vote would raise the debt limit through 2012, but only if Congress approves a series of major tax reforms and entitlement changes outlined by a bipartisan committee composed of Senate and House members.
The proposed structural changes -- a focal point of intense ideological conflict in Washington -- would have to generate between $1.6 trillion and $1.8 trillion in savings, according to a House Republican aide familiar with the package.
Boehner`s plan, while allowing a total debt-ceiling increase of roughly $2.6 trillion, also would require both a House and Senate vote on a balanced budget amendment to the Constitution between October 1 and the end of the year.
This plan is "less than perfect," Boehner said, but "reflects bipartisan negotiations" conducted with Senate Democrats over the weekend.
Democrats as a whole are vehemently opposed to the idea of holding more than one vote to raise the debt limit through the 2012 election, arguing that such a requirement is politically unrealistic and could prove to be economically destabilizing.
Republicans want to lock in long-term tax and spending changes, and argue that Obama is trying to avoid politically tough decisions in a presidential election year.
Meanwhile, top senators from each party said Monday night that behind-the-scenes talks continue to try to reach a deal that would avoid Congress voting on either the Reid or the Boehner proposals.
As leaders from the two parties continue to bicker, analysts warn that financial markets are growing increasingly nervous about the prospect of a national default. The Dow Jones Industrial Average dropped more than 100 points almost immediately after opening Monday morning, although it later cut that loss. Most Asian markets were trading higher on Tuesday.
As the debt ceiling debate drags on, a new CNN/ORC International Poll reveals a growing public exasperation and demand for compromise. Sixty-four percent of respondents to a July 18-20 survey preferred a deal with a mix of spending cuts and tax increases. Only 34% preferred a debt reduction plan based solely on spending reductions.
As in Congress, the public is sharply divided along partisan lines. Democrats and independents, according to the CNN/ORC Poll, are open to a number of different approaches because they think a failure to raise the debt ceiling would cause a crisis of major problems for the country. Republicans, however, draw the line at tax increases, and a narrow majority of them oppose raising the debt ceiling under any circumstances.
Fifty-two percent of Americans think Obama has acted responsibly in the debt ceiling talks so far, but nearly two-thirds say the Republicans in Congress have not acted responsibly. Fifty-one percent would blame the GOP if the debt ceiling is not raised; only three in 10 would blame Obama.