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Jul 31 2011

Congressional Game of Chicken: Countdown to Default Part 2 (Up Date)

(10 am. – promoted by ek hornbeck)

There is no deal. The Reid bill failed to get the 60 votes needed for cloture. As expected it was blocked by Republicans and four Democrats. From CNN:

Senate Republicans on Sunday blocked a Democratic effort to end debate and move to a vote on Majority Leader Harry Reid”s debt ceiling proposal, extending consideration of the measure as negotiations continue on a deal to raise the federal debt ceiling and cut spending.

Reid had postponed the vote for 12 hours, until 1 p.m. Sunday, saying at the time there were “many elements to be finalized.” He plans to insert a negotiated final agreement into the proposal once a deal has been reached.

The Republican-controlled House rejected Reid’s plan on Saturday — partisan payback for the Democratic-controlled Senate’s rejection of GOP House Speaker John Boehner’s plan Friday night.

The Senate has been advised not to got to a ball game as there could be another vote later this afternoon with more sell outs to the hostage takers.

Paul Krugman on “This Week with Christiane Amanpour” said that this deal will cost jobs and decrease revenue worsening the crisis to even greater proportions:

    “From the perspective of a rational person, we shouldn’t even be talking about spending cuts at all now,” Krugman told ABC’s Christiane Amanpour. “We have nine percent unemployment. These spending cuts are going to worsen unemployment… If you have a situation in which you are permanently going to raise the unemployment rate – which is what this is going to do – that’s actually going to reduce future revenues.”

    “These spending cuts are even going to hurt the long-run fiscal position, let alone cause lots of misery. Then on top of that, we’ve got these budget cuts, which are entirely – basically the Republicans {saying}, ‘We’ll blow up the world economy unless you give us exactly what you want’ and the president said, ‘Okay.’ That’s what happened.”

    “We used to talk about the Japanese and their lost decade. We’re going to look to them as a role model. They did better than we’re doing,” he added. “There is no light at the end of this tunnel. We’re having a debate in Washington which is all about, ‘Gee, we’re going to make this economy worse, but are we going to make it worse on 90 percent the Republicans’ terms or 100 percent the Republicans’ terms?’ The answer is 100 percent.”

    H/t Raw Story for the transcript

    Up Date: 20:00 EDT There is a tentative deal that could be voted on tonight in the Senate but I wouldn’t count on that considering that back stabbing duplicity of the GOP leadership. Brian Buetler at TPM has the ugly details of the agreement. If this is accurate it will probably throw this country into a second recession with the jobless U-3 heading back into double digits.

    Keep in mind that no matter what the Senate may pass there is the renegade House and this time it isn’t just the tea party faction but the Progressive Caucus that is balking. This is not over yet.

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