Politics – 2011 Michigan Debate Institutes – gls lab

Republicans are key to the debt ceiling – Boehner is in the driver’s seat

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GOP Key Republicans are key to the debt ceiling – Boehner is in the driver’s seat Wolf 6/16/11 (Richard, political analyst for USA Today, Debate over U.S. debt limit is going down to the wire, http://www.usatoday.com/news/washington/2011-06-15-debt-limit-debate_n.htm?csp=34news, MM) Republicans are in the driver’s seat For now, the nation's ability to borrow money is the big problem. The Treasury Department makes about 1 billion payments a year, 80 million a month. Without borrowing authority, some payments couldn't be made. Obama and Senate Democratic leader Harry Reid control two-thirds of the negotiations, but Republican House Speaker John Boehner is in the driver's seat. He's demanding that federal spending be trimmed by more than the debt ceiling is raised — perhaps $2 trillion or more, if the ceiling is to be raised enough to get past the 2012 elections. Republicans are insisting that entitlement programs such as Medicare and Medicaid be included in the cuts, but that tax increases be left out. Obama wants to target tax breaks enjoyed by oil companies and others, and he's pushing for a "debt cap" aimed at locking in the savings over five years by forcing automatic reductions if needed. House Majority Leader Eric Cantor, R-Va., says more than $1 trillion in spending cuts already has been identified by GOP and Democratic negotiators meeting regularly with Vice President Biden. Some of the proposals cited by both sides include reducing farm subsidies, overhauling the federal pension system and capping non-security spending for several years. As Aug. 2 nears, it becomes less likely that a deal to raise the debt limit can get through Congress in time. That means a short-term extension would be needed to avoid default. The deadlocked debate has spooked financial markets and all three major financial ratings agencies. Pimco, the world's largest bond investor, unloaded its U.S. government debt in March. "It's a very dangerous game of roulette that we're playing right now," says Neel Kashkari, Pimco's managing director. Standard & Poor's put the government on notice in April that its triple-A rating was in jeopardy. Moody's Investors Service warned this month of a similar downgrade. Fitch Ratings says Treasury bonds could be rated as "junk" by August. Among the world's nearly 20 AAA-rated nations, "the U.S. really is the only one that has not yet adopted a serious plan to reverse the upward path of the debt," says Steven Hess, senior credit officer at Moody's. Default clocks and payment plans That failure has at least some lawmakers preparing for default — something Congressional Budget Office director Douglas Elmendorf calls "a dangerous gamble." One school of thought: It would never happen. The Treasury Department would find some way to extend the clock. Geithner's Aug. 2 deadline isn't real. Geithner counters that as soon as the nation failed to pay any of its bills on time — from salaries and contracts to tax refunds — "the world would recognize it as a first-ever failure by the United States to meet its commitments." As the deadline gets closer, raising the specter of 'default clocks' on cable television for all the world to see, some lawmakers have introduced legislation that would determine who gets paid and who doesn't. Toomey has proposed that principal and interest owed to bond holders take priority. Sen. David Vitter, R-La., wants Social Security benefits given the same priority. Rep. Marlin Stutzman, R-Ind., would add military spending to the mix. What actually would happen in the event Congress doesn't raise the debt limit is unclear. Would federal workers be laid off, and would they be rehired and paid later? Would Social Security benefits be delayed? Would federal "prompt payment" rules require the government to pay interest on late payments? The whole mess could be avoided if Democrats and Republicans agree to work together — something Senate GOP leader Mitch McConnell says would prevent either side from gaining political advantage. "We can do something important for the country together, and this is the opportunity," he says. "That is the importance of this debt ceiling moment." Republican leadership key Financial Times 6/20/11 (leader in financial and business news, US budget impasse, http://www.ft.com/intl/cms/s/0/e0f57ee6-9b82-11e0-98f2-00144feabdc0.html#axzz1Ps4XiMLu, MM) Negotiators from the White House and Capitol Hill are stepping up their talks on raising the US debt ceiling. The Treasury says its measures to fend off default will be exhausted by August 2. The negotiators, led by Joe Biden, the vice-president, hope to reach agreement by the end of this month. The chances are that some kind of deal will be stitched together. The question is, what kind of deal? A fiscal patch is a good bet because no side sees political advantage in risking default. Only a handful of Republicans think that default, done carefully, might be salutary. The deal taking shape includes a “downpayment” of spending cuts and caps on future deficits. The fight is over the content of the downpayment and the design of the caps. The debate is therefore dangerously skewed. Further short-term stimulus should be on the table, married to firm commitments to cut borrowing in later years. With the economy close to stalling, it is risky to cut spending immediately. Any such cuts should be as mild as the politics allows and should be balanced with further payroll tax cuts (which Republicans might be inclined to accept) to keep the fiscal stance easy. For the future, automatic caps on deficits are worth trying but to be credible they must be spelt out. Once a path for borrowing has been set, do the caps trigger cuts in entitlements (such as Medicare and social security) or just in discretionary spending, or just non-defence discretionary spending? How, exactly, will they work? And, crucially, do they also trigger tax increases? It will be a challenge to come up with binding answers to these questions by the start of August, let alone in the next two weeks. But failure to agree on these issues should not prevent a raising of the debt ceiling. If these questions have to be finessed to get that done, so be it. Then, in restoring long-term fiscal health, balance is the key: find moderate savings everywhere and reform both entitlements and taxes. This will demand boldness all round. Perhaps, finally, Washington might rise to the task. Last week the Senate Republican leadership said it might think about curbing some tax expenditures as part of a wider deal, and the whole Senate voted overwhelmingly to cut billions in ethanol subsidies – a hugely wasteful policy that for years was nonetheless seen as untouchable. As the debt clock runs down, such signs are ­encouraging. Republicans key to the fight- Obama Spetalnick 6/14/11 (Matt, reporter for Reuters, Obama: If debt limit not raised, financial crisis possible, http://www.reuters.com/article/2011/06/14/us-usa-debt-obama-idUSTRE75D2SY20110614, MM) President Barack Obama warned on Tuesday there could be another global financial crisis if Congress failed to raise the national debt ceiling. But in an interview with NBC's "Today" show, Obama also said he took Republican leaders at their word that they want to avoid such a situation and he expects a deal to increase the debt limit "in a sensible way." "The full faith and credit of the United States is the underpinning not only of our way of life, it's also the underpinning of a global financial system. We could actually have a reprise of a financial crisis, if we play this too close to the line. So we're going be working hard over the next month," he said. Directory: files files -> Answer True False 2 points Question 2 files -> Integer programming and game theory files -> 4 Integer Programming files -> Bpa vehicle Window Repair Scenario #1 task: Procure vehicle window relacement. Objective files -> Pop Warner History files -> North Carolina Inclusion Initiative Mapping Where Children with ieps are Being Served Purpose files -> Fall 2013 Spring 2014 Program Data: Standard 1 Exhibit 4d files -> Hanban – asia society confucius classrooms network 2010 request for proposal files -> Northern England’s set-jetting locations Download 0.58 Mb. Share with your friends: