Debt Ceiling Debate Updates: Congress Has Until August 2 To Raise Debt Limit

Boehner, Obama and Reid (Whitehouse.gov)
This post will provide updates on the debt ceiling debate, mainly links to articles and press conference videos until the day of reckoning occurs. Congress has until August 2, 2011 to raise the debt limit or they run the risk of defaulting on their debt not paying important bills (*see comment below). Either way, the markets will probably use debt ceiling updates as catalysts. On July 21, S&P said there was a 50-50 chance that they'd downgrade U.S. Treasury debt. Mohamed El-Erian of PIMCO also thinks it is a possibility.

"If an agreement is reached to raise the debt ceiling but nothing meaningful is done in terms of deficit reduction, the U.S. would likely have its rating cut to the AA category, S&P said." (Reuters)

"The U.S. government may lose its AAA credit rating even if lawmakers reach a plan to avoid a default, said Mohamed A. El-Erian, whose Pacific Investment Management Co. is the world’s largest manager of bond funds." (Bloomberg)

Monday July 25, 2011

*Harry Reid's plan vs. John Boehner's "Cut, Cap & Balance" plan (Bloomberg)

"Boehner’s two-step plan would raise the U.S. borrowing limit by up to $1 trillion, with larger spending cuts, and require a new vote on more reductions before an additional $1.6 trillion debt-limit increase next year. It could be voted on in the House within two days. Obama and Senate Democrats oppose a short-term extension, which could lead to another debt standoff next year. 

By contrast, Reid’s proposal would cut $2.7 trillion in spending and give Obama the full $2.4 trillion in additional borrowing authority he seeks, enough to get through the 2012 elections."

Speaker Boehner's response to Obama's address (CSPAN.org, 7/25/2011)
President Obama's statement to the nation on the debt limit (CSPAN.org, 7/25/2011)
House Speaker John Boehner's news conference (CSPAN.org, 7/25/2011)
Senator Harry Reid's news conference (CSPAN.org, 7/25/2011)
No endgame in sight as debt default looms (Reuters)

Sunday July 24, 2011

‘Gang of Six’ Plan Derails Boehner-Obama Deal (Bloomberg)
Republicans, Democrats Prepare Rival Debt Plans (Bloomberg)
Republicans Back Short-Term Debt-Limit Agreement, Risking Veto From Obama (Bloomberg)

John Boehner on Fox News: Debt Limit Solution Must Adhere to Principles of "Cut, Cap, & Balance" (Youtube, 7/24/2011)

Cut, Cap & Balance = "spending cuts and reforms exceed any debt limit increase; the cause of a balanced budget amendment to the Constitution is advanced; and there are no tax hikes"

Reid Statement On Status Of Debt-Ceiling Negotiations (Senate.gov)

"Washington, D.C. – Nevada Senator Harry Reid released the following statement on the status of debt-ceiling negotiations.

“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.”"

Barack Obama accuses the US Congress of risking a global banking catastrophe as debt talks collapse (Guardian

Comments

  1. "... or they run the risk of a defaulting on their debt (not paying their bills)."

    Come on, this overly expansive definition of default (not paying their bills) is ridiculous. A default is the failure to make the scheduled payment on a loan. Being a slow pay on a bill is not a default.

    The government averages about $200 billion in monthly revenue. That's more than enough money to pay for interest on the debt, Social Security, Medicare and Medicaid, active duty troop pay, and veterans affairs programs.Some tough choices will have to be made with the several tens of billions left over, but there's no reason to default.Don't raise the debt limit, force the government to live like the rest of us, not spending more than they take in.

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  2. My bad.. Kind of reckless on my part. Here's another article for people to read: 
    Will the U.S. Face Crisis If Debt Ceiling Is Not Raised?
    http://www.christianpost.com/news/will-the-u-s-face-crisis-if-debt-ceiling-is-not-raised-52416/

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  3. For God's sake just get this done one way or another, and let's face the consequences. Hating all politicians who are holding not the US, but the WORLD hostage. AND THAT IS REPUBLICANS> THIS FROM A STUANCH DEMOCRAT.

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  4. Agree to Trader Kevin's post...  Place the cut backs on the Governments exspenses, raises, and bonuses.  If the government can't be treated like the rest of the country then they shouldn't be in office!!!  If i'm late or unable to pay my mortgage then the lean hold will foreclose. I cant go out there and increase my limit just because I cant afford my debt.  Government is spending OUR NATIONS money in wrong areas.  Hire somebody to assess the situation and allocate there spendings in the right way.  But they should take back from their own employees (government offices) instead of punishing the intire country by having the people pay more in taxes and cutting back on social security.  I am terrified to have any children in fear of them not having much of a life in this country we live in now......

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