President Obama has threatened to veto GOP legislation the House will vote on Tuesday that would require Congress to pass a balanced budget amendment in exchange for raising the nations borrowing limit.
Just about two weeks remain before an Aug. 2 deadline to raise the $14.3 trillion debt limit and this week could largely be consumed by the GOPs attempt to pass cut cap and balance legislation that is being pushed by the partys right flank particularly the dozens of freshmen backed by the Tea Party.
The GOP bill requires two-thirds approval by both chambers. It is not likely to pass the Senate where Democrats rule the majority.
The bill underscores the gaping divide between the two parties on how to resolve the debt ceiling debate with Republicans resisting any effort to raise taxes and Democrats refusing to go forward with a plan that doesnt include them.
In addition to requiring passage of a balanced budget amendment the cut cap and balance proposal would make $111 billion in cuts in fiscal 2012 and place caps on future spending.
Democrats say the bill would require drastic cuts to Social Security and Medicare and they argue there is no need for a balanced budget amendment to get the federal governments spending under control.
But the biggest divide is over taxes.
Any deal of significant size has to be balanced because there are not enough spending cuts to make White House spokesman Dan Pfeiffer told reporters in a conference call Monday afternoon. There would need to be revenues too.
While debate on the balanced budget legislation takes place on the House floor the two parties are working on a solution behind the scenes in a frantic effort to reach a deal to raise the debt ceiling before the Aug. 2 deadline.
House Speaker John Boehner R-Ohio and Majority Leader Eric Cantor R-Va. met with Obama on Sunday to try to hammer out a deal and Senate Majority Leader Harry Reid D-Nev. and Minority Leader Mitch McConnell R-Ky. are working on their own plan to give Obama the authority to raise the debt ceiling by $2.5 trillion.
That plan could include up to $1.5 trillion in cuts and would set up a commission that would come up with proposals to reduce the debt that the House and Senate would vote on later.
Reid announced Monday he plans to keep the Senate in session every single day including weekends until an agreement is reached.
Treasury Secretary Tim Geithner has warned of dire economic consequences if the debt ceiling is not raised by the deadline. On Monday financial markets reflected growing panic that a deal is unreachable.
Default would be a plague that would haunt our nation for years to come Reid said on the Senate floor. Our credit rating would take years to rebuild. The country would never be the same.
But even as the two sides try to scramble to put a compromise together some in the GOP are seeking a path to deficit reduction that would make the kind of massive cuts Republicans pledged to make during the 2010 midterm elections.
Sen. Tom Coburn R-Okla. on Monday produced a 600-page plan that would cut the deficit by $9 trillion by slashing spending across the board and reforming entitlement spending. Coburns plan would also raise $1 trillion by getting rid of certain tax breaks including those for the ethanol industry.
sferrechio@washingtonexaminer.com
President Obama has threatened to veto GOP legislation the House will vote on Tuesday that would require Congress to pass a balanced budget amendment in exchange for raising the nations borrowing limit.
Just about two weeks remain before an Aug. 2 deadline to raise the $14.3 trillion debt limit and this week could largely be consumed by the GOPs attempt to pass cut cap and balance legislation that is being pushed by the partys right flank particularly the dozens of freshmen backed by the Tea Party.
The GOP bill requires two-thirds approval by both chambers. It is not likely to pass the Senate where Democrats rule the majority.
The bill underscores the gaping divide between the two parties on how to resolve the debt ceiling debate with Republicans resisting any effort to raise taxes and Democrats refusing to go forward with a plan that doesnt include them.
In addition to requiring passage of a balanced budget amendment the cut cap and balance proposal would make $111 billion in cuts in fiscal 2012 and place caps on future spending.
Democrats say the bill would require drastic cuts to Social Security and Medicare and they argue there is no need for a balanced budget amendment to get the federal governments spending under control.
But the biggest divide is over taxes.
Any deal of significant size has to be balanced because there are not enough spending cuts to make White House spokesman Dan Pfeiffer told reporters in a conference call Monday afternoon. There would need to be revenues too.
While debate on the balanced budget legislation takes place on the House floor the two parties are working on a solution behind the scenes in a frantic effort to reach a deal to raise the debt ceiling before the Aug. 2 deadline.
House Speaker John Boehner R-Ohio and Majority Leader Eric Cantor R-Va. met with Obama on Sunday to try to hammer out a deal and Senate Majority Leader Harry Reid D-Nev. and Minority Leader Mitch McConnell R-Ky. are working on their own plan to give Obama the authority to raise the debt ceiling by $2.5 trillion.
That plan could include up to $1.5 trillion in cuts and would set up a commission that would come up with proposals to reduce the debt that the House and Senate would vote on later.
Reid announced Monday he plans to keep the Senate in session every single day including weekends until an agreement is reached.
Treasury Secretary Tim Geithner has warned of dire economic consequences if the debt ceiling is not raised by the deadline. On Monday financial markets reflected growing panic that a deal is unreachable.
Default would be a plague that would haunt our nation for years to come Reid said on the Senate floor. Our credit rating would take years to rebuild. The country would never be the same.
But even as the two sides try to scramble to put a compromise together some in the GOP are seeking a path to deficit reduction that would make the kind of massive cuts Republicans pledged to make during the 2010 midterm elections.
Sen. Tom Coburn R-Okla. on Monday produced a 600-page plan that would cut the deficit by $9 trillion by slashing spending across the board and reforming entitlement spending. Coburns plan would also raise $1 trillion by getting rid of certain tax breaks including those for the ethanol industry.
sferrechio@washingtonexaminer.com
