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Tag: cut cap and balance bill

Republican Business Lobbies and Tea Party Disagree On Debt Plan

The debt ceiling debate continues to reveal a deep rift in the the Republican Party between the business elite (including former Bush Administration officials who raised the ceiling without controversy or chaos) and the grassroots, anti-establishment Tea Party base. The split — which pits a single-minded focus on keeping business running smoothly against a single-minded focus on bringing the federal government to its knees — was previously masked by a unified front of opposition to Democratic policies such as health care reform and stricter environmental regulations.

On Tuesday, the Chamber of Commerce sent a letter to Congress encouraging them to vote for Speaker of the House John Boehner’s plan to raise the debt ceiling for six months. But the Republican Study Committee, a group of over 170 conservative members of the House, announced that they opposed the bill. Rep. Jim Jordan (R-OH), chairman of the Republican Study Committee, doubted that Republicans would accept the plan. “We think there are real problems with this plan,” he told the AP. Michele Bachmann, presidential candidate and chairman of the Tea Party Caucus in the House, continues to oppose all attempts to raise the debt ceiling.

Instead of Boehner’s plan, the Republican Study Committee supports the Cut, Cap, and Balance Act, which has already passed the Republican-dominated House but has no chance of passing the Senate. The Cut, Cap, and Balance Act is a darling of ultra-conservatives and Tea Party lawmakers because it forces Congress to pass the Balanced Budget Amendment — an amendment to the U.S. Constitution that would require massive cuts to entitlements and social welfare programs like Medicare and Social Security — before raising the debt ceiling. Boehner’s plan requires a vote on the Balanced Budget Amendment after the debt ceiling has been raised, but does not require Congress to pass the amendment first. This does not satisfy conservatives in the House, who prefer the pure vision of the Cut, Cap, and Balance Act. “The Senate should resume debate on the Cut, Cap, and Balance Act, amend it if necessary, and pass it, so we can provide the American people a real solution,” Rep. Jordan said in a statement

The Chamber of Commerce, on the other hand, is more concerned with protecting the interests of Big Business than fidelity to ultra-conservative ideology. In 2008, they supported Obama’s stimulus package, which most grassroots conservatives fiercely opposed. And now they support Boehner’s plan to raise the debt ceiling and avoid the government defaulting on its debt. In a letter sent to Congressmen on Monday, they underlined the severe risks to the economy of such a default. “A default on the obligations of the United States,” the letter reads, “would most assuredly cause severe, immediate, and pervasive economic harm ” and “political brinksmanship is no longer an acceptable strategy for either the White House or congressional leaders.” The Chamber may not be thrilled with Boehner’s plan, but they are not willing to oppose it and risk default.

It may turn out that none of this matters. Obama has already promised to veto the Boehner plan since it only raises the debt ceiling until December, which would force put the government into the same situation it’s in now — legislative gridlock and a real threat of default — in six months. Obama has pushed instead for Senate Majority Leader Harry Reid’s plan, which raises the debt ceiling through 2013.

Meanwhile, the latest polls show that most voters (86%) are worried about the consequences of default, and a majority (56%) believe that a plan to reduce the deficit should include some spending cuts and some revenue increases — which both business-friendly and Tea Party Republicans strongly oppose.

Obama Makes The Case For Sanity While Boehner Keeps His Foot On The Pedal

Barack Obama and Speaker John Boehner may have gone back and forth on the debt ceiling Monday night, but the market and rating agencies have already delivered a clear verdict: the House Republican bill — which they call “Cut, Cap and Balance” — will not prevent a downgrade of U.S. Treasury securities. Passage of the latest plan offered by Senate Majority Leader Harry Reid might not prevent a downgrade either. As President Obama explained, directly and eloquently, that will mean higher interest rates, larger deficits, diminished economic growth, and likely a worse recession. With apparent reluctance, the President endorsed Reid’s plan as far more accomodating than Boehner’s, because it foregoes the revenue increases that Democrats consider necessary and fair. Pleading repeatedly for compromise and balance, which he portrayed as a great tradition of American democracy, he warned that strict adherence to ideology would risk the future of the nation.

What the President’s speech offered, if voters listened closely, was historical context that underlies the current stalemate. If Boehner was listening, he ought to have blushed beneath his tan, knowing that he was about to claim the high moral ground on spending. Neither the Speaker nor any of his partisan colleagues can deny that their party voted to extend two wars and hugely expand Medicare spending, while cutting taxes on the wealthy — a series of acts that squandered the surplus earned by the Clinton Administration. Boehner won’t give this president a “blank check” to raise the debt limit, he blustered, although that is exactly what he and his colleagues gave George W. Bush on seven separate occasions.

Now Boehner wants the poor, the young, the elderly, and working families to pay for those gross and costly mistakes while insisting the wealthy to escape any such sacrifice. And he wants to be applauded for it, but polls show that nobody is clapping except his own party’s hardline base. The latest CNN survey indicates that 51 percent blame the Republicans for the default risk, while only 30 percent blame the President.

Whether or not they can comprehend the confusing series of leaks, proposals, claims and complaints emanating from Capitol Hill and the White House, voters seem to be realizing now what they risk might entail and why we are forced to confront it. Most Americans now evidently understand why Obama believes, as he said on Monday evening, that default would be “a reckless and irresponsible outcome to this debate” – and they may well understand that Boehner’s plan, which would only extend the debt ceiling for six months, will provide no viable solution. He warned that repeating the same political drama early next year would only pose “a greater danger” to economic growth and security, leaving the American people as “collateral damage” in the unremitting ideological warfare waged by his adversaries.

Yet despite the growing political isolation of the House Republicans, the President seems unwilling to follow the logic of his own argument to its real conclusion. If it is true that there is no will to compromise on the other side of the aisle, and if it is true that both default and the Republican plan would place the nation at unacceptable risk, then why has he foresworn unilateral presidential action to raise the debt limit? It is time to put that option on the table as fair warning to the Republicans that this president will not permit them to dictate a ruinous outcome – and accept the consequences, come what may.