Sunday, July 31, 2011

Domcrete debt dispute

President Obama will speak on the debt-limit impasse at 10:20 a.m. ET. We'll have more soon.

Our original post is here:

President Obama planned to make some kind of statement last night -- after the Republican House passed Speaker John Boehner's debt ceiling plan.

Instead, as he has for most of the week, Obama sat and waited as Boehner scrambled to find enough Republicans to get his plan through the House -- and eventually put off a final vote.

Largely sidelined since Boehner decided last week to break off direct White House talks, Obama and his team are constantly trying to plan the next moves in the debt ceiling dispute, hoping to avoid the prospect of a government default next week.

Administration officials expect the Boehner bill to pass today. They also expect the Democratic Senate to kill it, setting up even more talks on a potential compromise.

Officials said there are enough similarities between the Boehner plan and the proposal by Senate Majority Leader Harry Reid, D-Nev., to get a deal and avoid a government default next week.

"What a compromise looks like is pretty clear," White House spokesman Jay Carney said. "Significant deficit reduction; a mechanism by which Congress would take on the tough issues of tax reform and entitlement reform; and a lifting of the debt ceiling into 2013 so that we do not have the cloud of uncertainty that is hanging over our economy right now."

Obama has not spoken publicly on the debt impasse since his prime time speech Monday.

After a tense day of congressional floor fights and angry exchanges, Sen. Harry Reid, the majority leader, called off a planned showdown vote set for after midnight, but said he would convene the Senate at noon Sunday for a vote an hour later. He said he wanted to give the new negotiations a chance to produce a plan to raise the federal debt limit in exchange for spending cuts and the creation of a new congressional committee that would try to assemble a long-range deficit-cutting proposal.
"There are many elements to be finalized and there is still a distance to go before an arrangement can be completed," said Reid, who just a few hours earlier had played down talk of any agreement. "But I believe we should give everyone as much room as possible to do their work."
Reid's announcement set off an almost audible sigh of relief on Capitol Hill, where lawmakers and their aides had been bracing for an overnight clash over the debt following a day that had seen a heated House vote and lawmakers trudging from office to office in search of an answer to the impasse.
The first indication of a softening of the hard lines that have marked weeks of partisan wrangling over the debt limit came in the afternoon when the two leading congressional Republicans announced that they had reopened fiscal talks with the White House and expected their last-ditch drive to produce a compromise.
Following the House's sharp rejection of a proposal by Reid to raise the debt limit and cut spending, Sen. Mitch McConnell of Kentucky, the Republican leader and a linchpin in efforts to reach a deal, said he and Speaker John Boehner were "now fully engaged" in efforts with the White House to find a resolution that would tie an increase in the debt limit to spending cuts and other conditions.
"I'm confident and optimistic that we're going to get an agreement in the very near future and resolve this crisis in the best interests of the American people," said McConnell, who noted he was personally talking to both Obama and Vice President Joe Biden, a favorite partner in past negotiations.
Boehner, who would have to steer a compromise through the House, said he based his confidence on the prospect of an agreement on the sense that "we're dealing with reasonable, responsible people who want this crisis to end as quickly as possible."
A Democratic official with knowledge of the talks said that McConnell called Biden early Saturday afternoon, the first conversation between the two men since Wednesday. The official said they talked at least four more times on Saturday as they tried to work out an agreement.
The deal they were discussing, this person said, resembled the bill that Boehner won approval for in the House on Friday more than it did the one Reid had proposed.

After McConnell sounded a hopeful note, Reid called members of the Senate to the floor to hear him dispute the claims by his Republican counterpart and accuse Republicans of failing to enter into serious negotiations even as the Treasury risked running out of money to pay all its bills after Tuesday.
"The speaker and Republican leader should know that merely saying you have an agreement in front of television cameras doesn't make it so," Reid said after returning from a visit to the White House with Representative Nancy Pelosi of California, the Democratic leader in the House.
Trying to build momentum for his own proposal, Reid and fellow Democrats were working to win over Republican senators to support his plan to raise the debt ceiling through 2012 and circumvent McConnell.
"Americans are watching us and demanding a result that is balanced," Reid said.
The Senate Democrats' efforts were set back Saturday when 43 of the 47 Republican senators signed a letter to Reid saying they would not back his proposal, which would allow a $2.4 trillion increase in the debt ceiling in two stages while establishing a new congressional committee to explore deeper spending cuts. The numbers signaled that without changes in the plan, Reid would not be able to overcome a Republican filibuster, which requires 60 votes.
House Republicans signaled their disapproval of the Reid plan by holding a symbolic vote on Saturday, rejecting it by a 246 to 173 vote, in a move intended to show it had no chance of passing in that chamber. About a dozen Democrats joined Republicans in rejecting the Reid plan.
The pre-emptive vote could strengthen McConnell's hand as he seeks to shape any final compromise.
At the White House and in talks in congressional offices and corridors, most of the attention was focused on finding a way to define the precise conditions under which the President could get a second increase in the debt limit that would be needed early in 2012 under both Republican and Democratic proposals. Officials in both parties said another idea that had surfaced was to require a change in Social Security policy if the new committee deadlocked, providing an incentive for the new committee to act on its own.

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