Obama: Halt ‘3-ring-circus’ of debt-limit debate

Pres­i­dent Barack Obama addresses the nation from the East Room of the White House in Wash­ing­ton Mon­day on the approach­ing debt limit dead­line. (Asso­ci­ated Press | Jim Watson)

DAVID ESPO

AP Spe­cial Correspondent

WASHINGTON — Decry­ing a “par­ti­san three-ring cir­cus” in the nation’s cap­i­tal, Pres­i­dent Barack Obama crit­i­cized a newly minted Repub­li­can plan to avert an unprece­dented gov­ern­ment default Mon­day night and said con­gres­sional lead­ers must pro­duce a com­pro­mise that can reach his desk before the Aug. 2 deadline.

“The Amer­i­can peo­ple may have voted for divided gov­ern­ment, but they didn’t vote for a dys­func­tional gov­ern­ment,” the pres­i­dent said in a hastily arranged prime-time speech. He appealed to the pub­lic to con­tact law­mak­ers and demand “a bal­anced approach” to reduc­ing fed­eral deficits.

Obama stepped to the micro­phones a few hours after first Repub­li­cans, then Democ­rats drafted rival fall­back leg­is­la­tion Mon­day to avert a poten­tially dev­as­tat­ing gov­ern­ment default in lit­tle more than a week.

Obama said the approach unveiled ear­lier in the day by House Speaker John Boehner would raise the nation’s debt limit only long enough to push off the threat of default for six months. “In other words, it doesn’t solve the prob­lem,” he said.

The pres­i­dent had scarcely com­pleted his remarks when Boehner made an extra­or­di­nary rebut­tal car­ried live on the nation’s networks.

“The pres­i­dent has often said we need a ‘bal­anced’ approach, which in Wash­ing­ton means we spend more, you pay more,” the Ohio Repub­li­can said, speak­ing from a room just off the House floor.

“The sad truth is that the pres­i­dent wanted a blank check six months ago, and he wants a blank check today. That is just not going to happen.”

Directly chal­leng­ing the pres­i­dent, Boehner said there “is no stale­mate in Congress.”

He said the Repub­li­cans’ newest leg­is­la­tion would clear the House, could clear the Sen­ate and then would be sent to Obama for his signature.

The back-to-back tele­vised speeches did lit­tle to sug­gest that a com­pro­mise was in the off­ing, and the next steps appeared to be votes in the House and Sen­ate on the rival plans by mid-week.

Despite warn­ings to the con­trary, U.S. finan­cial mar­kets have appeared to take the polit­i­cal maneu­ver­ing in stride — so far. Wall Street posted losses Mon­day but with no indi­ca­tion of panic among investors.

With­out signed leg­is­la­tion by day’s end on Aug. 2, the Trea­sury will be unable to pay all its bills, pos­si­bly trig­ger­ing an unprece­dented default that offi­cials warn could badly harm a national econ­omy strug­gling to recover from the worst reces­sion in decades.

Obama wants leg­is­la­tion that will raise the nation’s debt limit by at least $2.4 tril­lion in one vote, enough to avoid a recur­rence of the acri­mo­nious cur­rent strug­gle until after the 2012 elections.

Repub­li­cans want a two-step process that would require a sec­ond vote in the midst of a cam­paign for con­trol of the White House and both houses of Congress.

There were con­ces­sions from both sides embed­ded in the com­pet­ing leg­is­la­tion, but they were largely obscured by the par­ti­san rhetoric of the day.

 Sen­ate Repub­li­can leader Mitch McConnell of Ken­tucky urged Obama to shift his posi­tion rather than “veto the coun­try into default.”

And Reid jabbed at tea party-backed Repub­li­cans who make up a sig­nif­i­cant por­tion of the House GOP rank and file. The Nevada Demo­c­rat warned against allow­ing “these extrem­ists” to dic­tate the country’s course.”

The mea­sure Boehner and the GOP lead­er­ship drafted in the House called for spend­ing cuts and an increase in the debt limit to tide the Trea­sury over until some­time next year. A sec­ond increase in bor­row­ing author­ity would hinge on approval of addi­tional spend­ing cuts some­time dur­ing the elec­tion year.

Across the Capi­tol, Reid wrote leg­is­la­tion that drew the president’s back­ing, praise from House Demo­c­ra­tic leader Nancy Pelosi — and crit­i­cism from Republicans.

By design or not, the two sides’ harsh remarks obscured con­ces­sions that nar­rowed the dif­fer­ences among the nation’s polit­i­cal lead­ers as they groped for a way to resolve the eco­nomic crisis.

With their revised plan, House Repub­li­cans backed off an ear­lier insis­tence on $6 tril­lion in spend­ing cuts to raise the debt limit.

And Obama jet­ti­soned his long­stand­ing call for increased gov­ern­ment rev­enues as part of any deficit reduc­tion plan.

Pend­ing the president’s tele­vised speech, the White House also declined repeat­edly to say whether Obama would veto the revised House measure.

White House com­mu­ni­ca­tions direc­tor Dan Pfeif­fer called the pro­posal “not a seri­ous attempt to avert default because it has no chance of pass­ing the Senate.”

Not all Repub­li­cans were happy with their leadership’s deci­sion to scale back leg­is­la­tion that had cleared the House last week, only to die in the Senate.

Among House con­ser­v­a­tives who have pro­vided the polit­i­cal mus­cle for the Repub­li­can drive to cut spend­ing, the revised leg­is­la­tion was a dis­ap­point­ment. “I can­not sup­port the plan,” said Rep. Jim Jor­dan of Ohio, one of the lead­ing advo­cates of leg­is­la­tion that cleared the House last week and died in the Senate.

But two rank-and-file Repub­li­cans said their con­stituents were voic­ing con­cerns other than the ris­ing fed­eral debt.

Rep. Tom Rooney, R-Fla., said his office is get­ting calls from con­stituents say­ing, “If I don’t get my Social Secu­rity check, it’s your fault.”

Rep. Tom Reed, a New York fresh­man, said many of his con­stituents are telling him to stand firm in his drive to cut spend­ing. “But I will admit there’s some anx­i­ety in the dis­trict” about Social Secu­rity and other pro­grams, he added.

As Boehner read­ied his leg­is­la­tion, Sen­ate Demo­c­ra­tic lead­ers called a news con­fer­ence to announce their own next steps.

The Democ­rats’ mea­sure would cut $2.7 tril­lion in fed­eral spend­ing and raise the debt limit by $2.4 tril­lion in one step — enough bor­row­ing author­ity to meet Obama’s bottom-line demand.

The cuts include $1.2 tril­lion from across a range of hun­dreds of gov­ern­ment pro­grams and $1 tril­lion in sav­ings assumed to derive from the end of the wars in Afghanistan and Iraq.

Boehner ridiculed the $1 tril­lion in war sav­ings as gim­micky, but in fact, they were con­tained in the bud­get the House passed ear­lier in the year.

The leg­is­la­tion also assumes cre­ation of a spe­cial joint con­gres­sional com­mit­tee to rec­om­mend addi­tional sav­ings with a guar­an­teed vote by Con­gress by the end of 2011.

Yet in the maneu­ver­ing it appeared another of the president’s long-held con­di­tions appeared to be in dan­ger of rejection.

Nei­ther Boehner’s mea­sure nor the one Reid was draft­ing included addi­tional rev­enue, accord­ing to offi­cials in both parties.

In addi­tion to a two-step approach to rais­ing the debt limit, the House mea­sure would require law­mak­ers in both houses to vote later this year on a con­sti­tu­tional amend­ment requir­ing a bal­anced fed­eral budget.

An ear­lier bill, passed in the House last week but then scut­tled in the Sen­ate, would have required Con­gress to approve an amend­ment and send it to the states for ratification.

That same bill would have made $6 tril­lion in spend­ing cuts in exchange for rais­ing the debt limit.

Obama promised to veto that bill even before the House voted on it.

Each side offered accounts of secret maneu­ver­ing designed to put the other side in a poor light.

Demo­c­ra­tic offi­cials said Obama called Boehner on Sat­ur­day night, one day after the col­lapse of com­pro­mise talks, and offered to reduce his demand for new tax rev­enue by $400 billion.

In return, Obama said that he wanted Repub­li­cans to aban­don their demand to can­cel parts of the year-old health care law if future deficit cuts did not materialize.

This offi­cial said Boehner rejected the pro­posal on Sunday.

Repub­li­cans dis­puted that account — and offered one of their own.

In their ver­sion of events, Reid agreed on Sun­day night to a two-step approach to rais­ing the debt limit that Obama has rejected.

Democ­rats denied it.

None of the offi­cials involved would agree to be quoted by name.

Posted by AP News on Jul 25 2011. You can follow any responses to this entry through the RSS Feed. Comments can be made below.