07.30.11

Obama, Congressional Leaders Reach Debt Compromise

President Obama ended the tense weekend by announcing Sunday night he and Congressional leaders had made a deal to raise the debt ceiling. While Harry Reid and John Boehner both threw their support behind the plan, Nancy Pelosi seemed more ambivalent.

U.S. Could Still Lose Credit Rating: Analysts

Has all this last-minute debt drama been for nothing? Some analysts say yes: The U.S. could still lose its AAA credit rating even after a last-minute debt deal was reached late Sunday night. The proposed $2.4 trillion in cuts over the next decade—especially with so many happening later—could have only a “minimal impact” on the economy, said economics professor Peter Morici. About $1.5 trillion of the planned savings will be decided by a bipartisan Congressional committee, leaving questions about whether the U.S. politicians will agree on how to decrease the country’s debt. Even with the bleak outlook, Asian markets opened high Monday on the news of the debt deal.

Obama: We’ve Reached a Debt Deal

President Obama announced Sunday night that a compromise had been reached on the debt deal. The proposed deal will cut $3 trillion in spending over 10 years, and he also said it will have “modest adjustments” to spending programs such as Medicare. “From the beginning, I said the ultimate solution had to balance,” Obama said. “But we’re not done yet,” he said, possibly alluding to the ambivalence that House Democrats have shown toward the plan. The Senate’s approval seemed all but assured Sunday night.

Pelosi ‘May Not’ Support Debt Plan

Just as Washington breathed a sign of relief, House Minority Leader Nancy Pelosi said not so fast. Hours after Senate Majority Leader Harry Reid said he would support the debt compromise congressional Republicans and the White House had hammered out, Pelosi said she "may not" be able to get House Democrats to support it. “We all might not be able to support it, or none of us may be able to support it," she told reporters Sunday night. Liberal Democrats voiced their displeasure with the proposed compromise, which aims to cut $3 trillion in spending over 10 years but reportedly has no tax increases for the wealthiest Americans.

5 Great Opinion Reads on the Debt Crisis

As the debt-ceiling deadline nears, The Daily Beast rounds up some of the most interesting takes on the debate, from a Cuban missile crisis comparison to why states will lose, no matter what.

White House, GOP Close to Debt Deal: Sources

Sources told the Associated Press late Saturday night that Republicans leaders and the White House were close to a deal on the debt ceiling that will raise the debt ceiling by $2.4 trillion and implement spending cuts in two phases. They also said the proposed deal would require Congress to vote on a balanced budget amendment, but would not impose it without a vote. Meanwhile, many on Capitol Hill said the late postponement could be the first real sign of progress in partisan showdown that has gripped Washington--and the rest of the nation. Senate Majority Leader Harry Reid postponed the Senate debt vote until Sunday afternoon as Republicans said they "fully engaged" with the White House over a deal. If a deal can be reached before Tuesday, the country will avoid going into default.

Howard Kurtz: House Kills Reid’s Plan

Speaker John Boehner’s loyal troops in the House stomped on the Democratic debt bill Saturday afternoon to retaliate for Friday’s Senate vote against the speaker’s plan. Howard Kurtz writes on how the 11th-hour debt brawl could lead to default.

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What Republicans Will Cross the Aisle?

If Senator Harry Reid’s plan is to pass in the Senate, it will need 60 votes to overcome a filibuster—but what Republicans will cross the aisle and vote with him? He needs at least 7 Republican votes, as he currently has only 51 Democrats and two independents that caucus with him. Four Republicans, including Scott Brown and Lisa Murkowski, refused to sign a letter voicing opposition to Reid’s bill, so they are considered possiblities. Other senators who could cross the aisle: Mark Kirk of Illinois, Kay Bailey Hutchinson of Texas, Lamar Alexander of Tennessee, Bob Corker of Tennessee, John McCain of Arizona, Charles Grassley of Iowa, and Richard Lugar of Indiana.

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Mullen: Default Could Affect Army Wages

After being asked by an active-duty soldier Saturday in Afghanistan if troop wages would be affected by a government default, Admiral Mike Mullen said he does not have an answer to that. “I honestly hope we don’t get there,” Mullen said. He indicated that a default should not affect operations in the immediate future, but he warned that “the single biggest threat to national security is this growing debt.”

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Boehner and Reid’s Dueling Press Conferences

It was press-conference afternoon on Capitol Hill. Only minutes after Senate Majority Leader Harry Reid pleaded with Republicans to come to a compromise, House Speaker John Boehner and Senate Minority Leader Mitch McConnell said they had been working with the president for a compromise. But the House still rejected Reid’s plan in a largely symbolic vote as payback for the Senate shooting down Boehner’s proposal.

How Republicans Screwed the Pooch

After another plea for compromise from Obama on Friday, Boehner passed a right-wing bill—only to have it quashed in the Senate. Now, as last-ditch negotiations take place to pass Harry Reid’s plan before Monday, Senate Democrats will need the votes of seven Republicans. The GOP says it wants to save the country from Obama’s reckless spending. But as Paul Begala argues, it was instead a Republican House, a Republican Senate, and a Republican president who squandered the surplus and drove the nation into the ground.

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Demolition Debt Derby’s Final Lap

After another plea for compromise from Obama, Boehner passed a right-wing bill that was promptly killed by the Senate. Howard Kurtz on warring debt plans and the brutal weekend ahead.

Apple Has More Money Than U.S. Treasury

Maybe Steve Jobs could help solve the debt-ceiling crisis. The U.S. Treasury Department announced on Thursday that it now has an operating balance of just $73.8 billion. At the moment, Apple has a cash reserve of $75.9 billion. Apple’s market capitalization is $365.3 billion, making it the second-largest company in the world. The numbers aren’t perfectly comparable—the Treasury’s number refers to how much cash the U.S. has before it hits the debt ceiling—but they should certainly be striking enough to cause a little concern in Washington.