The US Debt Crisis...A $14.3 Trillion question!

The US Debt Crisis...A $14.3 Trillion question!

[h=1]Senate Quickly Kills Boehner Debt Bill[/h]
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Jewel Samad/Agence France-Presse - Getty Images
Speaker John A. Boehner left the Capitol after voting in the House Chamber.

[h=6]By CARL HULSE, MICHAEL D. SHEAR and ROBERT PEAR[/h] [h=6]Published: July 29, 2011[/h]




WASHINGTON - House Republicans muscled through a revised debt limit plan without a single Democratic vote on Friday night and the Senate quickly killed it by tabling the bill indefinitely and moving to start consideration of a Democratic plan to avoid default.



The move now sets up an uncertain 72 hours as the Congress moves ever closer to the Tuesday deadline when the Treasury Department says the country will default on its financial obligations without an increase in the debt ceiling.
Senator Harry Reid, the majority leader, said he intends to start the legislative clock ticking on Friday on a new plan to raise the debt ceiling, though it was also possible to allow time for negotiation.
The two votes came about 24 hours after the first Republican proposal backed by Speaker John A. Boehner stalled. On Friday, the House voted 218 to 210 in favor of a revised plan that would increase the federal debt ceiling in two stages, with the second installment of $1.6 trillion contingent on Congressional approval of a Constitutional amendment requiring a balanced federal budget. The Constitutional amendment provision was added to attract conservatives who balked Thursday.
"To the American people, I would say we tried our level best," Mr. Boehner said as he concluded a debate that had been abruptly halted Thursday evening. "We tried to do our best for our country, but some people still say no."
Although 22 Republicans opposed the bill, it cleared the House after it had appeared for a time on Thursday night that the Republican leadership had been thwarted in its efforts to send a take-it-or-leave-it offer to the Senate.
After a caucus meeting to round up the votes needed for House passage, Mr. Boehner agreed to modify his plan, which raises the debt ceiling only enough to last a few months. Senate Democrats have taken up a measure of their own, which would raise the debt ceiling until after the election, and prepared for debate and possibly votes on it over the weekend.
The changes by Mr. Boehner won enough votes to allow him to pass his bill with only Republican votes, including those of many, but not all, from the Tea Party faction. Urging its passage, an emotional Mr. Boehner angrily accused President Obama and his Democratic allies of negotiating in bad faith for weeks and called the bill the only way to "end this crisis now."
"All they would do was criticize what I put out there," Mr. Boehner said, his voice rising during a rare appearance on the floor. "I stuck my neck out a mile to get an agreement with the president of the United States. I stuck my neck out a mile. I put revenues on the table."
He added: "A lot of people in this town can never say yes."
The vote brushed aside Mr. Obama's plea earlier in the day for quick passage of a compromise bill that could attract support from both parties.
Democrats said the changes the House approved only made the House bill more unpalatable. "This is the most outrageous suggestion I have heard," said Senator Richard J. Durbin, the assistant Democratic leader.
Mr. Obama said: "Any solution to avoid default must be bipartisan. I urge Democrats and Republicans in the Senate to find common ground on a plan that can get support from both parties in the House, a plan that I can sign by Tuesday."
He urged Republicans in the House and Senate to abandon a bill that "does not solve the problem" and has no chance of passage in the Senate.
"There are a lot of crises in the world that we can't always predict or avoid," he said. "This isn't one of those crises."
In an effort to break the logjam, Mr. Reid, the majority leader, had called on Senator Mitch McConnell, the Republican leader, to meet with him on Friday to try to resolve to the stalemate.
"My door is open," Mr. Reid said as the Senate convened. "I will listen to any idea to get this done in a way that prevents a default and a dangerous downgrade to America's credit rating. Time is short, and too much is at stake, to waste even one more minute.
"The last train is leaving the station," he said. "This is our last chance to avert default."
It appeared that the Senate would be in session around the clock this weekend.
The Democrats said they would file a motion on Friday that would start the Senate debate, running down the procedural clock while Republicans, presumably, filibustered against the Reid proposal. The first vote on breaking the filibuster would come after midnight Saturday. Unless the Democrats can win over enough Republicans to cut off debate and move to approving the Reid bill or some variant, the Republicans would be forced to hold the floor continuously, awaiting some kind of deal.
Mr. McConnell, who had been working with Mr. Reid on a fallback plan, abandoned that attempt and has been supporting the effort by Mr. Boehner to push through a proposal that would raise the debt limit in two stages - an approach flatly rejected by Senate Democrats and the White House even before it was toughened with the latest demand for a constitutional amendment.
Mr. McConnell, too, came to the Senate floor on Friday and offered little indication that he was ready to deal, accusing Democrats of devoting recent days to undermining the House plan. "Our Democratic friends in the Senate have offered no solutions to the crisis that can pass either chamber," he said.
Mr. Reid said he would be making changes to his measure to attract more support but made clear that he considered the Senate plan the final effort to avert a default next week.
"There will be no time left to vote on another bill or consider another option here in the Senate," he said. "None."
Mr. Reid said he had also had a "sobering" conversation on Friday with Treasury Secretary Timothy F. Geithner about the consequences of a default.
"It is really precarious for our country," he said.
Until now, the White House and Senate Democratic leaders had been waiting for the House to act before making their next move with an eye on the Tuesday deadline set by the Treasury Department for raising the debt ceiling or facing the possibility that the government would not be able to meet all its financial obligations.
Failure to pass his proposal would have represented a significant defeat for Mr. Boehner, the first-year speaker who has invested significant political capital in trying to get his fractious majority behind the legislation, which had the strong support of the entire leadership team.
Facing that prospect, he adjusted his proposal to the right, and his opposition within the caucus evaporated.
 
Sasa ndiyo mazungumzo rasmi ya debt ceiling yataanza, mwisho wa game ni leo. wakitaka kuwa down graded to AA basi waendelee na mchezo wa chicken. Republicans now they have been brought to the point of no return, walitaka kucheza mchezo halafu mwisho wasifanye chochote kuhusu kupunguza debt ila debt ceiling ingekuwa raised ili 2012 watumie kukampeni. Credit rating agents wanasema if no deal to reducing debt is reached US will be down to AA. Maana yake ni kwamba this problem should be off the table in 2012 kwani ni lazima deal lifikiwe.

Republican presidential candidates waliwataka jamaa zao wasikate deal kwa kuwa Debt and deficit plays well on trail. Sasa upepo umebadilika, wanaanza kuonesha kuwa Obama is not leading. GOP will lose big in 2012 if they are not careful though Obama also is vulnerable but if a third party candidate is strong not GOP.
 
Finally!!! There is a deal! This was very scary not only for USA but the whole World.
 

[h=1]Obama announces deal to end US debt crisis[/h] Obama says a deal has been reached with Republican and Democratic Congressional leaders and urged members of Congress to get behind the proposed legislation




  • Ewen MacAskill in Washington
  • guardian.co.uk, Monday 1 August 2011 02.38 BST Article history
    President-Obama-Discusses-006.jpg
    President Barack Obama says that he and Republican members of Congress have reached a compromise to solve the debt limit impasse prior to the August 2 deadline. Photograph: Chip Somodevilla/Getty Images

    Barack Obama declared on Sunday he had reached agreement with Republican and Democratic Congressional leaders aimed at ending the US debt deadlock that has threatened to throw the US and world economy into chaos.
    However, in an address from the White House, he added cautiously, "We are not done yet."
    Although the Senate is almost certain to pass it, the vote in the House could be a nailbiter, facing opposition from both hardline Republicans and disenchanted, left-wing Democrats who feel Obama has conceded too much.
    Obama urged members of Congress to get behind the proposed legislation, which will raise the country's debt ceiling and cut federal spending.
    With time fast running out, Congress may have left it too late to meet the Tuesday deadline set by the Treasury for raising the debt ceiling above its current $14.3tn limit.
    The US Treasury had said that if the ceiling was not lifted by 2 August, America would no longer have the cash needed to pay all its bills and faced the prospect of defaulting for the first time in its history.
    Obama, after weeks of frustrating negotiation in Washington, said: "This process has been messy and taken too long."
    The White House hinted yesterday that the deadline could be extended for a few days to allow Congress to get legislation through.
    The Democratic leader in the Senate, Harry Reid, said he was "cautiously optimistic" a deal would be made, a view echoed by his Republican counterpart, Mitch McConnell.
    The Senate could vote on the proposed legislation Monday.
    The bill would then have to go to the House, where the vote could be tighter.
    McConnell has scheduled a meeting with Republican senators for Monday morning to discuss the details of the deal. Speaking minutes before the president, he said: "I think I can say with a high degree of confidence that there is now a framework to review that will ensure significant cuts in Washington spending. And we can assure the American people tonight that the United States of America will not for the first time in our history default on its obligations."
    The deal will raise the country's $14.3tn debt ceiling by about $2.4tn. It sparked an immediate backlash from the left of the Democratic party because it also includes about $2.5tn in spending cuts, much of it almost certain to come from welfare benefits.
    The left-leaning grassroots organisation MoveOn described it as "grotesquely immoral".
    The White House and congressional leaders were anxious to get some sort of compromise under way, fearful that uncertainty could lead to huge market falls today. The Nikkei rose after Obama's statement.
    Experts warned that even if a deal was struck, the world's largest economy was likely to be stripped of its triple-A debt rating by Standard & Poor's.
    The head of the world's largest bond investor – Mohamed El-Erian of Pimco – told US broadcaster ABC: "Things that need to happen are not happening fast enough. If S&P sticks to what it said, it will downgrade." Julian Jessop, chief international economist at Capital Economics, said: "It looks like they will get a deal done to lift the debt ceiling but it looks like none of the numbers are going to reassure the debt rating agencies. I'm pretty sure America will lose its triple-A rating."
    Such a move is likely to prompt a big jump in the cost of borrowing for the US.
    The Democratic leader in the House, Nancy Pelosi, praised Obama's for his role behind-the-scenes in securing the compromise but said that she had not seen the details yet. She was planning a meeting of House Democrats today to discuss the package and warned there should be nothing in it that hits benefits and working-class.
    "We all may not be able to support it, or none us may be able to support it," Pelosi warned.
    Raising the debt ceiling is normally routine but Republican members of Congress, especially a hard core allied to the Tea Party movement, have used it over the last month to hold the White House hostage.
    David Plouffe, a White House adviser, told ABC yesterday it was not clear if there would be enough House Republicans to get a deal through.
    The deal is mainly a victory for Republicans whose mission has been to cut the huge federal spending budget and undermine Barack Obama in his bid for re-election next year. The crisis has already hurt Obama, with a poll last week showing his approval ratings drop from 45% to 40%. But the Republicans may be hurt, too, by their association with the Tea Party.
    The US's financial reputation has suffered as well, particularly over the last week, and even though a debt ceiling rise is now on the cards, the country could still see its credit rating being downgraded.
    The deal also postpones a lot of the hard spending decisions by handing over negotiation to a bipartisan Congressional committe to decide. It is due to report by the end of November and will have to weigh cuts in military spending against cuts in benefits.
    The deal emerged late on Saturday after fractious public exchanges earlier in the day between Republicans and Democrats. Pelosi, in a feisty speech on Saturday, accused the Republican speaker, John Boehner, of having gone over to the "dark side" in courting Republicans allied to the Tea Party. But after a series of negotiations involving Obama, Joe Biden, the vice-president, Reid, McConnell, Boehner and Pelosi, they reached an agreement on the broad principles of a deal.
    The Senate, which remained in session over the weekend because of the crisis, voted on a mainly procedural issue yesterday to end a Republican filibuster on the subject. In what may be a last act of defiance on this issue, Republican senators mustered enough votes to block the Democratic move. Although that seemed ominous for bipartisan co-operation, Republican senators were on course to vote for the deal.

 
my feeling is that there still twists and turns still to come and deceive even the faithful to the American system..................
 

[h=1]US debt talks - the winners and losers[/h] Who won, who lost? Was it the Tea Party or the Republicans? And what about the Democrats and Barack Obama, Harry Reid and Nancy Pelosi?




  • Ewen MacAskill
  • guardian.co.uk, Monday 1 August 2011 20.05 BST Article history
    House-Democratic-Leader-N-007.jpg
    US debt crisis talks: House Democratic Leader Nancy Pelosi. Photograph: Harry Hamburg/AP

    [h=2]Barack Obama[/h]A clear loser. The latest Gallup poll last week saw the president drop from 45% approval ratings to 40%. The danger is he will be seen as weak for failing to resolve the crisis sooner and being left largely on the sidelines as Congressional leaders worked on the deal. A lot of left-leaning Democratic supporters will be dismayed by the scale of the spending cuts he has agreed to. His one plus is he defeated Republican attempts to engineer a rerun of the debt crisis next year, in the midst of the White House election campaign.
    [h=2]John Boehner[/h]Another casualty. On the surface, he has led the Republicans to a remarkable victory. But he suffered a humiliation on Thursday, from which it will be hard to recover, when hardliners refused to back his compromise. After promising a vote he had to abandon it, though he got it through the next day. He is vulnerable to a future challenge from his rightwing deputy, Eric Cantor.
    [h=2]Tea Party[/h]The verdict will not be clear until the polls are in. The danger is that they and the Republican members of the House affiliated to them will be seen as extremist, prepared to put the economy at risk to fulfil their mission of reducing the national debt. But some will cheer them, glad to see the spending cuts, democratic politics at work. How the Tea Party fares will impact on the presidential hopes of Michele Bachmann, the Congresswoman who has consistently held out against a debt deal.
    [h=2]Nancy Pelosi[/h]The House Democratic leader has managed to balance her credentials as a progressive Democrat with supporting Obama in reaching an eventual deal. She turned in a good performance on the House floor on Saturday, denouncing Boehner for giving in to the Tea Party wing of his party and saying he had gone over to "the dark side". She expressed her unease about the impact of spending cuts on the working class but, loyally, promised to work to find the Democrats to get the bill through.
    [h=2]Harry Reid[/h]The Democratic leader is often portrayed as a grey man. But Reid is an old-style member of Congress, prepared to compromise. He comes out of this not a loser, even if not quite a winner: the pragmatism of the Senate contrasting with the histrionics of the Tea Party in the House. For Reid the priority was to prevent America defaulting, and the deal does that.

 
the real winners are the left center of American politics because they almost got everything they had aspired to.....................
 
[h=1]Debt crisis: Republicans scent victory with 'sugar-coated Satan sandwich'[/h] Both sides express unease at the deal,but it is Democrats who have given most ground to raise debt ceiling




  • Ewen MacAskill in Washington
  • guardian.co.uk, Monday 1 August 2011 19.45 BST Article history
    Eric-Cantor-Republican-Ca-007.jpg
    US debt crisis: Republicans such as Eric Cantor are full of smiles on Capitol Hill at the prospect of a deal renegotiated in their favour. Photograph: Joshua Roberts/Reuters

    It was easy wandering round the corridors of Congress yesterday to spot who had won the debt standoff. In huddles with party colleagues or heading off to caucus meetings to discuss the details of the deal or standing in front of TV cameras, it was the Republicans who had all the smiles.
    Democratic members of Congress looked uneasy, at times shifty; and some downright were angry. "If I were a Republican, this is a night to party," Emanuel Cleaver, a Democratic member of the House from Missouri, told MSNBC. Cleaver, a Methodist pastor and chairman of the Congressional Black Caucus, which met to discuss its reaction to the deal, dismissed it as a "sugar-coated Satan sandwich".
    Even the Democratic leader in the House, Nancy Pelosi, who helped negotiate the compromise with Barack Obama and the Republican leaders at the weekend, had serious reservations. Pelosi, a Californian on the liberal wing of the party on many issues, picked up on Cleaver's food metaphor and expanded on it. The deal, she told ABC, was a "Satan sandwich with Satan fries on the side". She voted last night for the bill to raise the debt ceiling, which passed by 269 to 161, but told colleagues in advance she would leave it to their consciences how they voted. Democrats came into the House chamber in a subdued mood, walking slowly as if at a funeral. The near silence on their side of the chamber contrasted with the noise on the Republican side, as members chatted away and hugged one another.
    The 15-minute vote began at 6.50pm. Unlike parliament, there is a screen above the chamber with all the names of members in lights and their votes recorded electronically with either a green Y or red N. The Republicans watched cheerfully; the Democrats could barely watch.
    Republicans aligned to the Tea Party movement voted against but even they did not appear unhappy with the deal. In return for Congress raising the debt ceiling, normally a routine matter, the Republicans have secured more than $2 trillion in spending cuts and forced the Democrats to do this without any tax rises. The Tea Party Republicans did not get all they wanted but they got most of it, and sacrificed almost nothing in return.
    The decisive day in Congress after weeks of a standoff was Sunday, when the Republican and Democratic leaders in the House and Senate, in negotiation with Barack Obama, reached agreement on the broad outline of a deal. Congress itself was eerily quiet. The Democratic leader in the Senate, Harry Reid, warned his fellow Democratic senators to remain on Capitol Hill. "I would not suggest [going to] a ball game," he said.
    Even though they were around, the place was far from full of frantic politicians running up and down staircases and corridors, as might have been expected in a major crisis. Congress felt almost empty, occupied mainly by journalists, sitting at the foot of the statues of dead politicians and military leaders waiting for the leaders to come out.
    By yesterday the place was packed, and there was excitement, the staircases and corridors filled with politicians discussing the merits of the deal and the looming votes. Obama opted against marching from the White House up Pennsylvania Avenue to Congress, as Jed Bartlet did in the West Wing, and instead sent vice-president Joe Biden, a Senate veteran. His job was to sell the deal to disenchanted members in the Senate and the House.
    Getting the vote through the Senate was regarded by the Republican and Democratic leaderships as relatively easy. The House was the potential problem, with a revolt on the Republican side by Tea Party Republicans and a revolt from Democrats fearful of the impact on the poor. One of the left-leaning Democrats in the House, Raul Grijalva, from Arizona, reflected the view of many of his party colleagues, that the White House had surrendered too much: "This deal trades people's livelihoods for the votes of a few unappeasable right-wing radicals, and I will not support it. This deal weakens the Democratic party as badly as it weakens the country.
    "We have given much and received nothing in return. The lesson today is that Republicans can hold their breath long enough to get what they want."
    What is galling for Democrats is that they hold the White House and the Senate while the Republicans hold only the House, the more junior of the two chambers. And yet is it the House that appears to be dictating events.
    The House, which saw the Republicans take control in November, when there was an influx of members backed by the Tea Party movement, secured a win earlier this year when it threatened to shut down the federal government and Obama gave in. Now it appears he has again. "Capitulation" and "Cave-in" summed up the mood of many left-leaning Democrats.
    One of the few independents in the Senate and one of the few American politicians to describe himself as a socialist, Bernie Sanders from Vermont, voted against. Expressing worry about the impact on social security, Medicare, Medicaid, community health centres, education and other programmes, he said he could not support a proposal that "balances the budget on the backs of struggling Americans while not requiring one penny of sacrifice from the wealthiest people in our country".
    The House Speaker, John Boehner, addressing his own members, said that while the Republicans had not got everything they had wanted (such as an assurance that the Pentagon will not be a major victim of spending cuts), they had got most of it and changed the debate in Washington.
    But his stance failed to sway the Tea Party Republicans, such as Michele Bachmann, the Congresswoman who is seeking the party's nomination to take on Obama for the White House next year. She voted against.
    "Throughout this process the president has failed to lead and failed to provide a plan," she said. "The 'deal' he announced spends too much and doesn't cut enough. Someone has to say no. I will."
    Boehner had better luck with other potential rebels. First he used policy arguments, but he saved his best for last: He told his colleagues that if they voted for the bill they could embark on a five-week holiday immediately afterwards. For a few waverers, that might have done the trick.

 
@sherrif, yes defaulting is not bankruptcy! but why there is a quanotation of defaulting while they have a healthy iconomy??
why are they worried?? if not heading to hell??
something to learn is how they are transparent in dealing with issues of nationo interest
 
Finally!!! There is a deal! This was very scary not only for USA but the whole World.

Inasemekana Biden kawalingania Teabaggers na Terrorists, they were ready to blow up the whole US and world economy if they don't get what they believe. I hope Americans realised that it was a mistake to let Repblicans capture the house 2012. Japokuwa bado ni mbali ila uchaguzi wa 2012 sijui kama wengi wao watarudi tena. I hope in a long run this will give Obama an edge in 2012 election. GOP have shown that they are not fit to govern, from states level (e.g Wisconsin, Ohio) to National level (Teabaggers). Kina John McCain wameliona hilo na kuanza kuwashambulia, "Teaparty hobbits". Hoping 2012 campaign would be tougher than 2008. GOP are betting on Obama's colour, hoping that Americans will never re-elect a blackman again.
 
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