We’ve been live-blogging the latest developments in the debt ceiling negotiations all day.Read below for Tuesday’s developments.
8:32pm | Executives from Moody’s and S&P will testify tomorrow before the House Financial Services Oversight subcommittee on the debt limit and the threat of downgrade. The hearing begins at 10 a.m.
Click here for the agenda
8:16pm | POLITICO is reporting Republicans will delay their scheduled vote on the Boehner debt limit plan from Wednesday to Thursday to allow time for it to be rewritten to include more spending cuts.
8:10pm | The White House is defending the Boehner plan from CBO scoring, saying all sides have used the January (higher) figured during the deficit reduction negotiations, not the latest (March) numbers. The White House knows that Reid’s plan will also have to be scored, and is looking to make that plan seem as good possible.
Read the statement from OMB Director Jack Lew here.
7:49pm | But even those predicting the government will have a few extra days warn that failure to raise the debt limit by August 2nd would be playing with fire. The credit rating agencies have set that date as their deadline for seeing the borrowing cap raised.
7:46pm | As late as Tuesday afternoon, the White House has denied there is any “wiggle-room” to the August 2nd deadline, when the nation will no longer be able to borrow. The New York Times report shows that the government will not have to decide which bills to prioritise in the event the debt ceiling isn’t raised until August 10th.
7:40pm | The New York Times is reporting that unexpected tax inflows may provide some flexibility to the August 2nd borrowing limit deadline.
“The consensus is that the government won’t run short of money until Aug. 10, when it would be unable to cut millions of Social Security checks without borrowing more money.” Read the full report here:
7:17pm | Larry Kudlow is interviewing S&P analyst David Beers who will be a one of the executives considering whether to downgrade U.S. debt. Beers says there is still a greater than 50 per cent chance of a downgrade of U.S. debt.
7:10pm | On CNN earlier today, White House senior advisor David Plouffe sees a compromise between the Reid and Boehner plans:
“The Boehner and Reid proposals have quite a lot of similarities,” he said. “You can see how there could be the contours of compromise.”
6:45pm | NBC’s Chuck Todd reports that House Democrats are convinced they will lose no more than five votes to Republicans on the Boehner proposal — making the revisions all the more important for the Speaker.
6:40pm | Boehner Spokesman Michael Steel responds to the CBO numbers:
“We’re here to change Washington – no more smoke-and-mirrors, no more ‘phantom cuts.’ We promised that we will cut spending more than we increase the debt limit – with no tax hikes – and we will keep that promise. As we speak, Congressional staff are looking at options to re-write the legislation to meet our pledge. This is what can happen when you have an actual plan and submit it for independent review – which the Democrats who run Washington have refused to do.”
5:23pm | Among the “sweeteners” being floated for the Reid plan to make it more palatable to Republicans in the absence of the Boehner proposal are the “triggers” included in the “gang of six” plan. .
4:34pm | Tea Party-backed Sen. Jim DeMint (R-SC) told Sean Hannity’s radio program earlier that he believes that the Boehner plan “is the best we can do before Aug. 2nd.” His support is surprising, given how many more-moderate Republicans are lining up in opposition to the plan.
4:17pm | House Republicans have called another meeting of the caucus tonight to meet with policy experts as Boehner and Cantor try to convince members of their party to back the GOP plan to raise the debt limit.
4:14pm | Rep. Heath Shuler (D-SC), who voted with Republicans on the “Cut, Cap, and Balance” plan, will not join them on the Boehner plan. With no Democratic help, it appears the plan will not reach 217 votes tomorrow. He said it is “nothing more than political posturing that threatens the economic security of our country”.
4:03pm | Boehner spokesman Brendan Buck emails on Obama’s veto “threat”: ““The House plan is the only one with a pathway to the President’s desk, and we appreciate his apparent willingness to sign it. By signing the House bill, the President could quickly end the crisis atmosphere he’s created and demonstrate he’s serious about cutting spending.”
3:36pm | Rep. Paul Ryan (R-WI) the chairman of the House budget committee has endorsed the Boehner plan. HIs support will help Boehner rally his caucus to support his plan for raising the debt limit. [link]
2:42pm | The White House formally issued a veto threat on Speaker of the House John Boehner’s plan to raise the debt limit. In a Statement of Administration Policy from the Office of Management and Budget, officials said if the bill “is presented to the President, the President’s senior advisors would recommend that he veto this bill.” [Link]
2:26pm | Reid says he tried to include a “trigger” that would include penalties if the bipartisan fiscal commission was not able to reach an agreement on major deficit reduction later this year, adding that Republicans would only agree to cuts.
2:07pm | Club for Growth is the latest conservative organisation to oppose the Boehner plan.
“It cuts almost nothing immediately, it caps only discretionary spending, and it does not require passage of a balanced budget amendment.”
“Additionally, and perhaps more importantly, it simply doesn’t fix the country’s fiscal problems. We strongly oppose it and we urge a NO vote.”
1:52pm | House Republicans are revolting against the Boehner debt ceiling plan, The Washington Times reports. In addition to their dissatisfaction with the magnitude of spending cuts, they also want assurances that a balanced budget amendment will be sent to the states — a nearly impossible task with Democrats controlling the Senate.
12:48pm | Jay Carney is beginning the briefing now. He says Obama believes the American people overwhelmingly believe that Washington should compromise on a “balanced” approach. White House takes credit for crashing the House servers/phone lines.
12:46pm | Bloomberg’s Lizzie O’Leary quotes an S&P spokesman pushing back on CNN’s report last night that S&P backs the Reid plan: S&P Spokesman to me: “S&P has been very clear not to comment on any particular plan proposed.”
12:08pm | NBC News is reporting President Obama is on his way to the Capitol to continue negotiations on raising the debt limit. This would be a highly unusual move, as all previous discussions involving the president have taken place at the White House.
12:04pm | While some conservative groups are opposing the Boehner plan, National Review is claiming victory over the Reid proposal. Yuval Levin writes that “Something between the [Boehner and Reid] bills, which is now perhaps the most that Democrats can hope for, would be an extraordinary win for Republicans”. Read the post here:
11:57am | The GOP “Cut, Cap, and Balance” plan got five Democratic votes, but it is not clear whether they or any other Democrats would support the Boehner plan against their party’s will. Democrats didn’t “whip against” the CCB plan since it was guaranteed to pass. That won’t be the case tomorrow.
11:52am | If Democrats are capable of holding their caucus together, it appears the Boehner debt limit plan will fail to pass the House of Representatives if brought to a vote. Rep. Jim Jordan (R-OH) says Boehner’s plan does not have the support of 218 Republicans as of this morning.
11:46am | White House economic advisor Gene Sperling refused to say Obama will veto a short term debt limit increase. “Look, we’re facing a stalemate right now,” he said. “Our issue now is not what happens if legislation comes to the president’s desk,” Sperling said. “Our issue is that we’re in stalemate, and we need some kind of a compromise to break the stalemate.”..
11:43am | Conservative groups are rallying in opposition to the Boehner proposal, telling their members to call their representatives. “Regrettably, the Boehner plan is insufficient to addresses the fiscal challenge we currently face,” wrote Heritage Action for America in a message to supporters, adding “CALL CONGRESS and tell them to remain strong, and fight for real cuts and real reforms.”
11:38am | The Hill newspaper quotes a Republican source saying Eric Cantor told his caucus today to “stop grumbling and whining and to come together as conservatives and rally behind the speaker and call the president’s bluff.”
11:33am | Republicans calling on Obama to publicly say the nation will not fail to pay its debt obligations. Saying “the President is being irresponsible not reassuring the markets we will not default.”
11:26am | Conservative Republicans are pushing legislation that would prioritise payments in the event the debt limit isn’t raised. Neither Republican nor Democratic leadership want to acknowledge this may be necessary as they try to reassure markets that the debt limit will be raised in time.
10:08am | Apparently President Obama’s call for people to contact their representatives is working. “Due to high volume of external calls, House telephone circuits serving 202-225-XXXX phone numbers are near capacity”.
10:07am | Reid is quoting Republican lawmakers saying they would prefer a long-term solution to raising the debt limit. He adds “The Republican plan, they know, will not pass the Senate of the United States.”
9:54am | Bloomberg is reporting that the Treasury Department and the Fed can work together to prevent thee government from defaulting on its debt through September, by prioritizing payments. Read the report here:
9:47am | Just how similar are the GOP and Democratic debt plans? Not only do they have the same name, but they also have the same fiscal target for the federal spending for fiscal year 2013. Is a compromise near? Our take here:
9:00am | Today’s schedule so far:
- 10:00: Republican Press Availability
- 11:15: Republican Study Committee Chairman Rep. Jim Jordan (R-OH), one of the most conservative Republicans, and an opponent of the Boehner plan, will speak.
- 12:30 White House Press Secretary Jay Carney will brief the press
- The Senate will begin debate on the Reid plan this afternoon.
- No meetings between President Obama and congressional lawmakers are currently scheduled.
8:52am | The New Republic’s Jonathan Chait’s ominous prediction after listening to Obama and Boehner last night:
“I’m not really sure what Obama was trying to accomplish in his speech. I thought he would try to find some kind of lowest common denominator between the Reid and Boehner plans that would stand a chance of passing Congress. He didn’t. Instead he appealed once again to the Grand Bargain. If Obama thinks Congress will pass something like that, he’s nuts. … The most rational explanation for Obama’s speech is that he’s positioning himself for failure. He’s explaining his position so that when Congress fails to lift the debt ceiling, Americans will blame the Republicans and not him. … I expect a week from now we’ll be bracing for disaster.” Read the full article here.
8:49am | In case you missed it, sources point to S&P favouring the Democratic debt limit plan over the one introduced by Speaker of the House John Boehner because it cuts more from the deficit initially, and raises the debt limit in one shot. More here.
8:13am | Per Mike Allen’s Playbook, White House officials are going on a media blitz today to push a compromise solution, as it becomes clearer that a plan will develop without the input of President Obama.
8:03am | Good Tuesday morning and welcome to D-Day -7. Congressional leaders have under 160 hours to reach a deal to raise the debt limit to ensure the government can pay all of its bills on August 3rd.
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