August 2nd is rapidly approaching, and Congress remains nowhere near an agreement to raise the debt limit and lower the deficit.We’ll be bringing you the latest on the negotiations here all day. (You can view our live blog from Sunday here.)
Read below for the day’s developments. Click here for the latest on the talks.
5:54pm | The Washington Post’s Ezra Klein says there is an easy compromise between the Reid and Boehner proposals. He says a proposal with Reid’s spending cuts and long-term debt limit increase, coupled with spending caps and an agreement to vote on a balanced budget amendment (which is dead in the Senate) may seal the deal. Read his take here.
5:52pm | The anti-tax group Americans for Tax Reform has endorsed the Boehner debt ceiling plan, saying “This plan is good for taxpayers, children and other living things.” Their statement can be found here.
5:47pm | Speaker of the House John Boehner will give the GOP response to President Obama’s address tonight. A response from congressional opposition as seen after the State of the Union is a bit unusual on policy matters.
4:11pm | Boehner still pushing for balanced budget amendment, says delaying vote to later this year will give GOP more time to build support to pass it. He called it “the ultimate enforcement mechanism” for reigning in government spending.
3:56pm | New York City Mayor Michael Bloomberg on the debt ceiling talks:
“There’s something profoundly wrong in Washington…Should Washington fail to raise the debt ceiling, the rest of the world would never again be as confident in America.”
3:50pm | Cantor added that he thinks Obama is opposing the GOP plan for political reasons:
“Though he has warned Congress not to call his bluff, I remain hopeful that he and his party will work with us to move forward on this common sense plan and won’t leave the strength of the economy and millions of American jobs hanging in the balance for election year political posturing.”
3:46pm | House Majority Leader Eric Cantor called on Democrats and President Obama to back the GOP proposal in a statement released Monday afternoon:
“The two-step framework that the Speaker and I laid out to our members today is not perfect – as we’ve said for months, we would have much preferred to vote to increase the debt limit only once, but the President and his party continued to make demands which we cannot meet – namely tax increases.“
3:20pm | Some GOP lawmakers are not ready to support the Boehner deficit reduction proposal, after the GOP caucus meeting this afternoon. They reportedly want more immediate spending cuts and a guaranteed balanced budget amendment, not just a promise of a vote.
3:12pm | More from White House Press Secretary Jay Carney:
“Senator Reid’s plan also reduces the deficit more than enough to meet the contrived dollar-for-dollar criteria called for by House Republicans, and, most importantly, it removes the cloud of a possible default from our economy through 2012.“
3:08pm | The White House has released a statement supportive of the Reid plan:
“Senator Reid’s plan is a reasonable approach that should receive the support of both parties, and we hope the House Republicans will agree to this plan so that America can avoid defaulting on our obligations for the first time in our history. The ball is in their court.“
3:07pm | Across the aisle, trouble is brewing for the GOP plan to be introduced later today by Speaker of the House John Boehner. The Cut, Cap & Balance coalition has rejected Boehner’s debt proposal, according to The Huffington Post’s Jennifer Bendery.
2:48pm | Schumer pushes back at Republican claims that war savings should not be included in deficit reduction claims, saying if the wars can increase the deficit, they can reduce it. Schumer notes that Rep. Paul Ryan included war savings in his budget plan, and that they have been scored by the Congressional Budget Office to produce $1 trillion in savings.
2:40pm | Reid says Republicans are trying to force Congress to have the same debate, on the same subject a few months from now. He says the short-term extension is “a non-starter in the Senate, and in the White House.“
2:29pm | The Reid Plan [link].
2:27pm | Reid’s plan would raise the debt limit through the end of 2012, while cutting the deficit by $2.7 trillion. His deficit reduction package would not include entitlement reform or tax increases, but includes $1 trillion in savings from the wars in Iraq and Afghanistan. $400 billion would come from interest savings.
2:24pm | White House Communications Director Dan Pfeiffer said Monday afternoon that “stories saying that POTUS rejected a bipartisan proposal are false, Sen Reid never agreed to a short term deal,” per his spokesman.
2:05pm | Charles Gasparino is claiming the White House is reaching out to bankers to tell them the government will not default if the debt ceiling isn’t raised by August 2nd. By most accounts the government has enough money to prioritise payments for at least a week.
1:43pm | Rep. Steve King (R-IA) warned today that President Obama could be impeached if the government defaulted:
“STOP talking about default. The 1st dime of each $1 of revenue services debt. Obama would be impeached if he blocked debt payments. C C & B!”.
12:50pm | Senate Majority Leader Harry Reid will hold a press conference at 2:30 today to present his debt limit plan. House Republicans will be briefed on their own deficit reduction package at that time. It appears Reid is looking to get a jump on Boehner with his newser.
12:30pm | More details are also emerging on the GOP plan introduced by Boehner. It would reportedly cut $1 trillion from the deficit now, and raise the debt limit into the first part of 2012.
A second vote to raise the borrowing ceiling would be required next year, after Congress acts on steeper deficit reduction proposed by a bipartisan fiscal commission.
12:25pm | According to The Huffington Post’s Sam Stein, the Reid debt plan would not include entitlement reforms, and includes $1 trillion in savings from the wars in iraq and Afghanistan. Both items will likely prove objectionable to Republican lawmakers.
12:08pm | Democrats are seizing on this quote from a Bloomberg article published today on the debt limit debate to argue against any short-term increase:
“Christian Cooper, head of U.S. dollar derivatives trading in New York at Jefferies & Co., said markets view a two-stage plan as a “non-starter because we now know it is amateur hour on Capitol Hill and we don’t want to be painted in this corner again.”
11:53am | Bank of America is expecting a downgrade of the U.S. credit rating to AA within the next year. The investment note, obtained by POLITICO’s Ben Smith, reads:
“We expect the US credit rating to remain on negative outlook and for a downgrade to AA to occur only when the rating agencies believe there will be no serious follow through. This means a downgrade would not likely occur until after the six month period of negotiations which puts us in early next year.”
11:43am | The Washington Post reports today that House Majority Leader Eric Cantor’s hardline position on new taxes in the debt limit negotiations is a boon for hedge funds and private equity firms. The paper reports that Cantor walked out of talks with Vice President Joe Biden last month over disagreements about new taxes on investments. Read the full story here.
11:38am | The Washington headquarters of Americans for Tax Reform, the anti-tax group, was briefly evacuated today after a bomb threat. The group’s leader Grover Norquist, has been criticised for pushing Republican lawmakers to reject any debt limit deal that includes new taxes.
10:48am | We just heard from Senate Majority Leader Reid’s office via Twitter. A spokesman wrote that Reid “does not want short-term deal that could cause credit rating downgrade,” adding that his “2.7T plan stretches through 2012.“
10:45am | In a blog post, Speaker of the House John Boehner called President Barack Obama’s demand for a debt limit increase through the end of 2012 “indefensible ” because he is not ensuring spending is being cut by an equal amount to the borrowing increase. He added that Obama’s plan is a “blank check.”
10:36am | We’re still waiting to hear back on requests for official comment from Reid’s office, though congressional sources are confirming that Reid did agree to a deal with Boehner for a short term debt limit increase, only to be rebuffed by Obama last night. The news was first reported by Cox Radio’s Jamie Dupree.
10:14am | Democrats have said they will not support a balanced budget amendment, and they voted down the GOP “Cut, Cap, and, Balance” plan because it made raising the debt limit contingent on passing one through Congress. It is unclear if they would similarly oppose legislation that just calls for a vote.
9:48am | Citing GOP sources, Dupree reports that the plan would have included $1 trillion in cuts, while creating a deficit commission to pursue more changes later this year. Obama has threatened to veto any debt limit increase that doesn’t increase the debt limit through the 2012 election.
9:46am | Cox Radio’s Jamie Dupree is reporting that President Obama rejected a bipartisan short-term debt limit increase. The plan was reportedly agreed to by Boehner, McConnell and Reid. Reid brought it to Obama, who rejected it last night.
9:28am | McCarthy did seem open to including some sort of balanced budget amendment in the GOP proposal for show, for the Senate to remove and send back to the House for a final vote. The extra step would add to the amount of time it would take to pass a debt limit increase, and if the House is to go about this route, they have little choice but to release their proposal today for a Wednesday vote.
9:24am | Speaker of the House John Boehner admitted that the “Cut, Cap, and Balance” bill is dead on a call with GOP lawmakers yesterday. For his proposal to pass the Senate he will have to significantly deviate from that bill’s “framework,” something McCarthy did not seem to embrace.
9:18am | GOP Majority Whip Kevin McCarthy (R-CA) tells NBC’s Chuck Todd on “The Daily Rundown that the Republican plan will be similar to the plan they passed last week. “We’re going to use the same framework as “Cut, Cap, and Balance” to come up with something that can pass the Senate,”he said.
8:59am | Among the points of contention are whether the debt limit should be raised through the 2012 election, and if savings from the wars in Iraq and Afghanistan should be counted. In both cases Democrats say yes, while Republicans say no.
8:46am | White House Communications Director Dan Pfeiffer writes in a blog post that Republican leaders once opposed a short-term increase in the debt limit before embracing it. The White House position is that the borrowing ceiling must be raised through the end of 2012 in a single vote, or risk economic turmoil.
8:41am | A spokesman for House Majority Leader Eric Cantor emails a statement pushing back on reports that Cantor opposed a short-term increase in the debt limit last week (as the White House and Democrats have contended). Brian Patrick writes:
“To be clear, Speaker Boehner, Leader Cantor and House Republicans have repeatedly said that the best path forward is a long term solution with spending cuts equal to (or greater than) a debt limit increase without tax increases. However two weeks ago when the White House kept insisting on tax increases, Leader Cantor tried to find a middle ground. He offered a middle-ground solution with cuts equal to the debt limit increase, to which President Obama responded “don’t call my bluff.
8:28am | White House Communications Director Dan Pfeiffer and Boehner Spokesman Brad Dayspring found themselves in a Twitter war of words last night. The transcript below:
Pfeiffer: “Three times the GOP has walked away from a deficit deal bc they wouldnt ask wealthy and corps to pay a little more. Too bad for the country.”
8:11am | Currently no talks are scheduled at the White House today. Speaker of the House John Boehner is expected to release his deficit reduction plan this afternoon. We also expect more details on Senate Majority Leader Harry Reid’s plan today.
8:01am | Congressional leaders are divided over two plans to avoid default, as the time to reach an agreement is best measured in hours, not days, do to strict House and Senate rules. The latest on those plans here.
7:53am | There’s only a 50-50 chance of getting this done by next week. That’s what a senior White House official tells ABC News’ Jake Tapper. “We may be here as we tick down to midnight,” the official said.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.