With Clock Ticking, Washington Debt Talks Move Past a “Grand Bargain”

The President met with leaders of both parties yesterday to continue talks about raising the debt limit.  John Boehner and Mitch McConnell nixed any idea of a ‘grand bargain’ which President Obama had pushed for…

Time Magazine

President Obama and congressional leaders met again on Sunday night for 75 minutes at the White House as they tried to hash out an agreement on a deficit reduction deal tied to the impending deadline to raise the federal debt limit. No deal was reached except to agree to meet again on Monday.

Obama and the Democrats in the room — House Minority Leader Nancy Pelosi, House Minority Whip Steny Hoyer, Senate Majority Leader Harry Reid and Senate Majority Whip Dick Durbin – continued to push for a grand bargain that would achieve some $4.5 trillion in savings. They also insisted that entitlement reforms — changes to Medicare and Social Security — remain on the table. “We came into this weekend with the prospect that we could achieve a grand bargain,” Pelosi said in a statement. “We are still hopeful for a large bipartisan agreement, which means more stability for our economy, more growth and jobs, and more deficit reduction over a longer period of time.”

House Speaker John Boehner, who had pushed for a bigger deal when negotiators convened last Thursday, reversed course on Saturday night, announcing he would seek a smaller package of just over $2 trillion in cuts. In Sunday’s meeting, House Majority Leader Eric Cantor did most of the talking for the GOP, insisting that all revenue increases in any deal be offset by tax cuts. Also present at Sunday’s gathering were Senate Minority Leader Mitch McConnell and Senate Minority Whip Jon Kyl. “It’s baffling that the President and his party continue to insist on massive tax hikes in the middle of a jobs crisis while refusing to take significant action on spending reductions at a time of record deficits,” said Don Stewart, a McConnell spokesman. “Sen. McConnell believes we need to reduce Washington spending, reform and strengthen entitlement programs, and prevent the more than trillion dollars in tax hikes that Democrats want to add at a time of rising unemployment.”

Before the grand bargain broke down, Democrats had demanded that $1 trillion in revenue increases be coupled with $3.5 trillion in spending cuts. About $300 billion of that would have come from ending corporate tax breaks and another $700 billion would’ve come from letting some of the Bush tax cuts for the wealthiest Americans expire. Boehner had argued the Bush tax cuts, along with other issues, should be left to a comprehensive tax reform package that could be taken up immediately following the deficit reduction deal. Obama had insisted that the Republicans should have to share in the sacrifice for a larger deficit reduction package. And, indeed, on Sunday night, Democrats argued that any package would have to include some concessions from Republicans.

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10 comments

  1. If you didn’t catch Keith Olberman’s end of the July 11th show’s Special Comment on Obama’s debt limit negotiations you should find a way to view it.

    Very powerful stuff.

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  2. I’ll catch it for sure. Now, did you see Lawrence O’Donnell’s assessment of the genius of Obama’s strategy in negotiating with the repugs?

    Now that is a must see. I got a feeling that KO will be bashing the prez as usual, while Lawrence praises his genius of negotiating right into the Repugs talking points and true to form, once the prez adapts their idea, they change their mind.

    If you haven’t seen it, check it out:

    Obama’s Rope-A-Dope Strategy

    Step-by-step, Lawrence explains President Obama’s approach to the debt negotiations and why he’s masterfully winning the fight.

    http://www.msnbc.msn.com/id/21134540/vp/43719752#43719752

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  3. Yeah, I already saw it – shorttly after watching Olberman’s comment. I found Olberman more persuasive. You have to see it. Please do, kstreet, and let us know what you think – compared to O’Donnell’s view.

    My sense is that the Republicans will eventually agree to some token tax “adjustments” or tightening of “loopholes” in return for substantive changes in SS and Medicare that they will attempt to trivialize. After all what difference does it make if your SS doesn’t start until you’re 67 instead of 65? A hell of a lot of difference if you’ve made major plans for your life based on the promise of receiving your SS at 65.

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  4. I saw Olbermann’s special comment on Democratic Underground. I, too found it to be compelling…however, being the analytical and political person that I am, O’Donnell’s analysis was spot on in my opinion.

    I have always been a fan of KO and will continue to be, but KO’s special comment spoke to the heart and soul of our country and it’s draconian policy against other less fortunate citizens. (I think that’s what you liked about it LTL.) I’m a liberal! I agree 100%. But tonight, my preferance, in terms of delivery and top notch analysis goes to O’Donnell, hands down.

    (Geminis are analytical by nature…)

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    1. But O’Donnell’s entire analysis was premised on the notion that Obama will “out-bluff” the Republicans by getting them to reject his offer of “compromise” – one which cuts spending at about 5 times the amount that additional revenues will be raised – an unprecedented ratio. Only problem with that strategy, though, is what happens if they accept his offer, considering that his “compromise” is such bad news for senior citizens? Would that still constitute a “win”? Put yourself in the shoes of the unfortunate senior who has to count each penny and decide whether to eat or purchase medication. I’m predicting the Republicans will “cave” and “reluctantly” accept Obama’s offer as they high five each other on the way out the door. And many American seniors will stay home come 2012 because they will not have funds for transportation to the polls.

      Talk about a pyrrhic victory ….

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  5. I’m predicting the Republicans will “cave” and “reluctantly” accept Obama’s offer as they high five each other on the way out the door. And many American seniors will stay home come 2012 because they will not have funds for transportation to the polls.

    Talk about a pyrrhic victory ….

    Ok, LTL…this is the thing:

    I agree that O’Donnell’s analysis depends on an outcome that is anti-senior citizen and KO’s special comment is definately pro-senior citizen. I get it, I promise, I get it!

    I don’t disagree with KO’s position.

    I don’t like the possible outcome of Lawrence O’Donnell’s analysis.

    My interpretation of O’Donnell’s analysis was like diagramming a sentence. The sentence itself did not get my full attention but the analysis of the sentence did.

    O’Donnell peeled off each layer of Obama’s actions in such a way that it simply gave me a little more “hope” about the President’s future.

    Two things stood out that bothered me though…one was the 2/3rds concession of depleting senior benefits and the other was the fact that the POTUS might have to concede to a short-term debt raise.

    O’Donnell implied that Obama may have purposely positioned himself with the senior concessions knowing that the GOP would reject ANY idea Obama might have. Thus allowing Obama to drop the concession altogether at some point…

    LTL, keep in mind that everyone has been beating up on this president for one thing or other. For the first time in a long time I heard some positive feedback about Obama. I simply enjoyed listening to that particular narrative.

    I’m a senior, I really do get what you are saying.

    It was all about the excellent analysis that O’Donnell presented and a respite from Obama bashing on both sides of the aisle.

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    1. Yeah, it’s certainly refreshing to hear someone applaud the President for a change. But we will soon see what happens.

      Oh, the drama! :)

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      1. LTL, after a while, people like Jane Hamsher (Firedoglake), Keith Olbermann, Ed Schultz and even Rachel, from time to time annoy me with their Obama bashing. They say they are liberals but they jump on him for the slightest thing…especial KO and Hamsher. I, personally refuse to watch or read superfluous Obama bashing (as opposed to legitimate debate over some of his policies.)

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  6. Yeah, it’s certainly refreshing to hear someone applaud the President for a change. But we will soon see what happens.

    Oh, the drama!

    Ahhh! Alas, we agree…sort of. LOL

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