Tag: Budget Ceiling

And Then There Were Five . .

Sen. Tom Coburn (R-OK), he of the Sen. Ensign “put your pants on” club, has departed in a huff from the latest government attempt to come to a budget agreement on the backs of those who can least afford it. Coburn walked out when Dick Durbin refused to accept Coburn’s demand for $130 billion in Medicare benefit cuts for current beneficiaries on top of the $400 billion in savings already on the table. That half a billion is on top of the cuts already passed in the Obamacare bill. If enacted, these cuts would dismantle Medicare.

From Greg Sargent at the Washington Post:

The “Gang of Six” talks on deficit reduction broke down after Senators Dick Durbin and Tom Coburn got locked in a heated yelling match over Coburn’s demand for extremely deep cuts in Medicare that Durbin thought would “destroy” the popular program, a Senate aide familiar with the talks tells me.

The episode could prove at least somewhat reassuring to liberals who have worried that Durbin is open to a “grand bargain” that would include serious cuts in the popular program, which would undercut Dem efforts to draw a sharp contrast with Republicans on the issue. Durbin has insisted he’s at the “Gang of Six” table mainly to protect liberal priorities.

The episode also is a reminder of how much Republicans will insist on in Dem concessions as conditions for any deal.

Coburn apparently has been bringing up new issues at every meeting, or demanding to reconsider old ones and asking for sharper cuts to Social Security than had been previously agreed to even as the group appeared to be reaching a consensus. On Monday he threw the gauntlet down, like the loyal corporate puppet that he is, and when he couldn’t get his way, took his ball and went home to C Street. I give Durban some small iota of credit for not caving but considering the recommendations that will come from this right wing/blue dog packed “gang”, that is damning praise.

Another Congressional Game of Chicken: The Debt Ceiling

Will there be another “cave exploration by our Spelunker-in-Chief? Despite President Obama speech on Wednesday and his demand request for a “clean bill” to raise the debt ceiling, there are those who have their doubts about Obama resolve to stand his ground considering his past capitulations in the name of bipartisanship for the last two years.

Now Sen. Jim DeMint (R-SC) has threatened to filibuster the bill should it not contain “other fiscal reforms” like a balanced budget amendment.

A top conservative senator on Thursday indicated he is willing to go to extreme lengths to prevent a vote on raising the debt ceiling, even if it hurts the Republican Party politically.

Sen. Jim DeMint (R-S.C.) said on the conservative Laura Ingraham Show he is considering filibustering an upcoming vote to raise the nation’s $14.3 trillion debt limit if it doesn’t contain other fiscal reforms.

While the Senate Minority Leader Mitch “The Human Hybrid Turtle” McConnell (R-KY) has said that the ceiling should be raised to avoid the dire consequences, he would like to see it passed with only Democratic votes.

Mr. McConnell is discouraging his colleagues from filibustering a vote to increase the federal debt limit because he knows that, if push came to shove, some of his colleagues would almost certainly have to vote yea. He’d rather it pass in a 51-vote environment, where all of the votes could come from Democrats, than in a 60-vote environment, where at least seven Republicans would have to agree to a cloture motion.

In the same New York Times article by Nate Silver the consequences of failing to raise the debt ceiling would lead to another recession:

If the Congress does not vote to increase the debt ceiling – a statutory provision that governs how many of its debts the Treasury is allowed to pay back (but not how many obligations the United States is allowed to incur in the first place) – then the Treasury will first undertake a series of what it terms “extraordinary actions” to buy time. The “extraordinary actions” are not actually all that extraordinary – at least some of them were undertaken prior to six of the seven debt ceiling votes between 1996 and 2007.

But once the Treasury exhausts this authority, the United States would default on its debt for the first time in its history, which could have consequences like the ones that Mr. Boehner has imagined: a severe global financial crisis (possibly larger in magnitude than the one the world began experiencing in 2007 and 2008), and a significant long-term increase in the United States’ borrowing costs, which could cost it its leadership position in the global economy. Another severe recession would probably be about the best-case scenario if that were to occur.

The bill will not get to the Senate until sometime in May. When it does reach the “upper” chamber, it most likely will be loaded with hundreds of riders from the House Tea Party Republicans. The President and the Senate Democratic leaders have a limited choices. However, if that choose  to  stand their ground and push for that “clean bill”, there could be “savior”, Wall St., which stands to lose billions or more if the US  defaults on its debt. As David Dayen at FDL suggests this is a plausible solution. But is it possible  considering Obama’s inability to win at this “Congressional Game of Chicken”?