So if McConnell goes for it, or something based on it where does it put the House?

The CBO say his plan cuts $2.2Tn, it has no net tax increases, it matches cuts to any debt limit uplift.

If Boehner can't even persuade enough of his caucus to support a plan that cuts less, what are the alternatives?

danivon wrote:So if McConnell goes for it, or something based on it where does it put the House?

The CBO say his plan cuts $2.2Tn, it has no net tax increases, it matches cuts to any debt limit uplift.

If Boehner can't even persuade enough of his caucus to support a plan that cuts less, what are the alternatives?

The CBO has to accept the presuppositions in it--including the inflated spending.

I just read another article that was illuminating. The "future cuts" are almost worthless. Future Congresses rarely abide by them.

What do you mean by "no new net tax increases"? Does that mean there are more new taxes on some, and less taxes on others?

Btw, as an example of how large and out of control the government is, how about this one(and yes, it took place during the Bush Administration):

The National Institutes of Health (NIH) sent more than $90 million of U.S. taxpayers’ money overseas to China for various public health research projects, a new report shows.

For example, in a $17 million study, a Chinese researcher from the Chinese Center for Disease Control and Prevention investigated whether 420 prostitutes and 241 of their clients were willing to use “microbicides” (a class of medications that includes nonoxynol-9) during sexual activity in order to combat sexually transmitted diseases. Some of the prostitutes were only 14 years old.

Between 2003 and 2008, the NIH spent more than $17 million funding the study of AIDS and HIV in Kaiyuan County, Yunnan Province, China. According to the Traditional Values Coalition, which dug up these and other grant records, the single published result of this research is an article titled “Microbicide Acceptability and Associated Factors Among Female Sex Workers and Male Clients in Kaiyuan County, Yunnan Province, China.”

I know, I know. It's a very small amount. That's not the point. Our government spends so much money in so many ways, I don't think anyone knows how much money is simply wasted.

The only way to reel it in is to start cutting and keep on cutting until we finally notice a difference. All these "insignificant" amounts taken together, plus all the pinheaded bureaucrats "required" to think up and administer these expenditures could add up to real money.

Simple animation that shows why this matters--and it has nothing to do with Obama.

Great news: Neither plan works, so both are back to the drawing board.

Btw, Democrats want to borrow $2.7T over the next 17 months. That's an 18.6% increase (currently, it's at appx. $14.5T) in less than a year and a half. Can anyone tell me how that makes us more financially secure? I understand not wanting to default, but taking on more debt in this manner seems very likely to hurt our credit rating anyway.

One way that I've been looking at these numbers is to compare them to the stock market capitalization of our biggest companies. If you combine the market caps of Exxon, Apple, Microsoft, GE, and Google (to pick 5 of our largest), you'll get a total value of about $1.4 Trillion. That's how much our federal government loses in a year. Every year they use value equivalent to 5 of our biggest companies. I can't imagine any way in which that is sustainable.

bbauska wrote:What do you mean by "no new net tax increases"? Does that mean there are more new taxes on some, and less taxes on others?

I don't know the details so I was cautious. I think the. Claim is no tax increases at all, but I can't verify it.

Meanwhile, the Democrats have not been slack in demagoguery:

Pelosi: What we're trying to do is save the world from the Republican budget..We're trying to save life on this planet as we know it today.

Of course, the DNC Chair is in a class by herself. If demagoguery were an Olympic event, she would take gold, silver, and bronze, nearly every day.

“Aren’t we at the point where the closer we get to chaos, the more concern that there should be about coming to the table and compromising with Democrats?” Wasserman Schultz asked. “This is not leadership. This is almost like dictatorship. I know they want to force the outcome that … their extremists would like to impose . . .

DNC Chairwoman Rep. Debbie Wasserman Schultz (D-FL) strongly chided the GOP today for using a movie clip from the film “The Town,” in which two criminals agree to a revenge attack, in order to rally lawmaker support for Speaker Boehner’s new debt bill currently being rewritten in the House.

The playing of the clip, organized by members of House Majority Whip Kevin McCarthy’s (R-CA) staff, happened in a closed-door caucus meeting on Tuesday. It features Ben Affleck’s character asking for a friend’s aid in order to “hurt some people.”

“Who are they planning to hurt?” demanded Wasserman Schultz, adding: “Unfortunately that short clip from ‘The Town’ tells you everything you need to know about their approach to the negotiations over the debt ceiling,” she said, after showing the clip to the attending media…

“With such legislation Republicans certainly would hurt some people,” she said. “In fact they would hurt quite a lot of people. The craziest part is that they expect us to get into that car and go with them. We want no part of it.”

This is the woman the President handpicked to run the DNC. Very impressive!

So, Steve, did the GOP use such a clip to 'rally the troops', or not? A revenge motif seems inappropriate if you are negotiating a solution to a major crisis of government. It's appropriate if it's all about partisanship, though.

Thanks for demonstrating that both sides have their share of idiots, Steve. Why are you only keen on slagging off the ones with Donkey buttons?

Anyway, let's get this straight. In terms of cutting the deficits the plans that I've seen are as follows:

Boehner. Saves $0.915Tn over ten years. No tax increases
Reid. Saves $2.2Tn over ten years. No tax increases
Gang of 6. Saves c.$4Tn, includes c.0.8Tn in tax increases

So what would the fiscally responsible path be if the prime goal is to reduce deficits?
If you take the principled position of not increasing any taxes, which would it be?

I understand that Reid's plan includes 'savings' from post-surge Afghanistan. So, are you saying that these should be 'priced in' to any plan?

By the way, the markets are not happy about this wrangling. Bond prices went up (now higher than the UK's), meaning that the cost of borrowing has gone up - in response to the faffing about on the ceiling. The ceiling is not new borrowing, it's a revision in the overdraft limit. It enables new borrowing, sure, but as not one plan by anyone seems to be able to deliver a deficit reduction of $1.4Tn in one year, the US is going to need to borrow more.

A plan that means that another debate like this is likely in the next year is not going to make the market happier. From US debt deadlock hits world shares

A short-term deal also raised the chances of America losing its AAA credit rating, warned Michael Hewson of CMC Markets. "Politicians do appear to be making some progress, however a major sticking point would appear to be the Republican insistence of a second vote on a debt ceiling rise before the 2012 election. Given recent comments by ratings agency S&P this may not be wisest course of action by US leaders and could well precipitate a ratings downgrade in the coming months," Hewson said.

Gary Jenkins of Evolution Securities was also concerned that the US was flirting with a downgrade, although rating agencies could be placated by a credible long-term fiscal plan to tackle America's debt.

"On the current proposals a downgrade is still likely in my opinion, but at this stage of more concern is the possibility that they don't even raise the debt ceiling. Surely they couldn't be that stupid?" Jenkins wrote in a research note.

You all need to grow up.

danivon wrote:So, Steve, did the GOP use such a clip to 'rally the troops', or not? A revenge motif seems inappropriate if you are negotiating a solution to a major crisis of government. It's appropriate if it's all about partisanship, though.

Thanks for demonstrating that both sides have their share of idiots, Steve. Why are you only keen on slagging off the ones with Donkey buttons?

Both sides have used movies in the past. Would you like to review?

Of course, you nicely gloss over what Debbie said--a dictatorship, really? In recent days, Democrats have encouraged Obama to: raise the debt ceiling without Congressional approval, grant backdoor amnesty to illegal aliens without consulting Congress, and take one other action (memory fails atm). How can a party that runs 1/2 of Congress be a "dictatorship?"

They're not out to "hurt" anyone. They're trying to save the country. How so? Well, have you seen what S & P said today?

(Reuters) - A U.S. deficit reduction plan that promises $4 trillion in savings over time would be a "good down payment" on getting the country's strained public finances under control, ratings agency Standard & Poor's said Thursday.

While more savings would be needed over time, $4 trillion "takes you pretty far along, and I think a grand bargain of that nature would signal the seriousness of policymakers to address the fiscal position of the United States," said John Chambers, chairman of S&P's sovereign ratings committee, on a conference call with clients.

"Four trillion dollars would be a good down payment," he said.

S&P has warned it may cut the United States' top AAA credit rating even if a deal on raising the government's debt ceiling is not accompanied by a credible plan to cut the deficit.

Note those words: $4T would be "a good down payment" and our credit rating would get cut anyway. So, again, I ask, where is the Great Man on this?

Democrats don't want to cut anything "real." They're willing to "cut" increases or pretend that current war funding would continue for the next ten years, but they talk about lives being over if we cut anything in a "real" sense.

Anyway, let's get this straight. In terms of cutting the deficits the plans that I've seen are as follows:

Boehner. Saves $0.915Tn over ten years. No tax increases
Reid. Saves $2.2Tn over ten years. No tax increases
Gang of 6. Saves c.$4Tn, includes c.0.8Tn in tax increases

The Gang of Six thing was a couple of pages. In other words, when it got fleshed out, we would see a lot of "savings" like the $1T we save by reducing our footprint in Afghanistan--something that is happening in any event.

I understand that Reid's plan includes 'savings' from post-surge Afghanistan. So, are you saying that these should be 'priced in' to any plan?

Yes, because you can't "save" what you weren't going to spend anyway.

By the way, the markets are not happy about this wrangling. Bond prices went up (now higher than the UK's), meaning that the cost of borrowing has gone up - in response to the faffing about on the ceiling. The ceiling is not new borrowing, it's a revision in the overdraft limit. It enables new borrowing, sure, but as not one plan by anyone seems to be able to deliver a deficit reduction of $1.4Tn in one year, the US is going to need to borrow more.

No, we need to spend less. There is no way we can borrow our way out of this. We have to have "shared sacrifice," which is nothing like what the President describes. Genuine shared sacrifice means my generation needs to look for ways to cut Medicare and Social Security for ourselves--not for those already receiving it. Genuine shared sacrifice means we have to do what the President said before he was elected--go through the budget line by line and cut what makes no sense. Sen. Coburn has a list of $9T in cuts we can make. I'd say about $4T in real cuts, entitlement reform (higher ages, means testing, etc.) and some tax reform (closing loopholes, lowering rates) would actually get the job done. Then, we do need an Amendment to force balanced budgets minus declared wars or "national emergencies" (requiring a 2/3 vote of Congress and Presidential approval).

A plan that means that another debate like this is likely in the next year is not going to make the market happier. From US debt deadlock hits world shares

A short-term deal also raised the chances of America losing its AAA credit rating, warned Michael Hewson of CMC Markets. "Politicians do appear to be making some progress, however a major sticking point would appear to be the Republican insistence of a second vote on a debt ceiling rise before the 2012 election. Given recent comments by ratings agency S&P this may not be wisest course of action by US leaders and could well precipitate a ratings downgrade in the coming months," Hewson said.

I think this is a done deal--and Obama should have led on this issue two years ago. Instead, he pretended as if borrowing and spending could lead us to prosperity. When that didn't work, he was out of ideas, thus explaining why he has no plan now except borrowing more.

You all need to grow up.

The conservatives are fine. We understand vast changes need to be made. The President? He thinks simply raising the debt ceiling will bring "financial stability."

He's the man-child.

Dan:

Anyway, let's get this straight. In terms of cutting the deficits the plans that I've seen are as follows:

Boehner. Saves $0.915Tn over ten years. No tax increases
Reid. Saves $2.2Tn over ten years. No tax increases
Gang of 6. Saves c.$4Tn, includes c.0.8Tn in tax increases

The other difference between the Reid plan and the Boehner plan is how much (and long) they extend the credit limit. Boehner extends by $900 billion (which is only 6 to 8 months!) whereas Reid extends by $2.2 trillion which gets us past the next election. If there aren't a lot of specific cuts, than a short leash makes sense given our profligate ways. Frankly, I prefer much larger cuts accompanied by small tax increases for the wealthy (over $1 million of income). I haven't seen the details of the gang of 6 plan, but I probably be comfortable with that sort of approach.

The other important point here is that none of these plans have passed any chamber of the legislature or have been approved by the President. We should get a vote on Boehner's plan tonight, and it will be close. I hope it passes.

If Obama and Reid veto it without an alternative, I don't see how you can conclude this is anyone's fault but theirs. They are against the Republican plan, but they haven't put forth a specific one of their own, and it's not clear that they have the necessary votes in either chamber to pass it.

Ray Jay wrote:We should get a vote on Boehner's plan tonight, and it will be close. I hope it passes.

If Obama and Reid veto it without an alternative, I don't see how you can conclude this is anyone's fault but theirs. They are against the Republican plan, but they haven't put forth a specific one of their own, and it's not clear that they have the necessary votes in either chamber to pass it.

So given that it didn't even get to a vote, where are we now?

I think we are going past the deadline. It doesn't look like Obama will employ the 14th Amendment since that risks impeachment. I'm a bit over my depth here, but this is my understanding:

There will be 2 challenges. The first is that bonds come due throughout August, and the Treasury will auction new bonds to replace them. It will be difficult and more expensive to issue those new bonds.

The next challenge is August 15th when interest is due on many outstanding bonds. To have enough money to pay the interest, we will have to hold payments throughout August. I imagine social security and veteran payments will be made. Essential employees will be kept on, and probably be paid, but I'm not sure we can. Others will be furloughed. I would expect medicare and medicaid payments to hospital and doctors to be held short term. It 's going to be very complicated; no doubt the decisions will be challenged in the courts.

Even at that point, it's not clear to me which side will blink.

I tend to be an optimist, but I am having a hard time envisioning a positive outcome.

Yeah, the 14th thing looks risky. He could invoke it later if things get bad, but to do it now or early next week would invite a challenge.

I get that people want a detailed plan, but surely there isn't time to write one, let alone find 227 sane House Reps and 51 sane Senators to pass it.

What with the continuing saga over Greece, I have to say I fear the markets could react to cause a second recession. :-(