President Obama told CBS News’s Scott Pelley that if the Republicans don’t agree to raise the debt ceiling he can’t guarantee that American senior citizens will receive their Social Security checks. He included veterans, but nothing about all of the young, able-bodied people on food stamps. He has sunk to an all new low.
“I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it,” Mr. Obama said in an interview with CBS Evening News anchor Scott Pelley, according to excerpts released by CBS News.
The Obama administration and many economists have warned of economic catastrophe if the United States does not raise the amount it is legally allowed to borrow by August 2.
Lawmakers from both parties want to use the threat of that deadline to work out a broader package on long-term deficit reduction, with Republicans looking to cut trillions of dollars in federal spending, while Democrats are pushing for a more “balanced approach,” which would include both spending cuts and increased revenue through taxes.
The final line in the article is a quote from yesterday that’s a classic: “This the United States of America and, you know, we don’t manage our affairs in three-month increments. You know, we don’t risk U.S. default on our obligations because we can’t put politics aside.” Really? Wasn’t it his party that failed to pass a budget when they had complete control of the federal government? Has he already forgotten the continuing resolutions that kept the government funded until the Republicans finally came up with a budget?
He also failed to mention that he and Tim Geithner will decide who gets paid and who doesn’t, and that it’s his insistence on tax increases that’s holding things up. The Republicans have offered a short term deal which he has rejected because he wants tax hikes. Senate Minority Leader Mitch McConnell said that as long as Obama is president they’ll never reach any agreement. House Speaker John Boehner is just as frustrated.
“Let me be crystal clear on this: At no time, ever, during this discussion did I agree to let taxes go up,” Boehner said, according to a source in the room. “I haven’t spent 20 years here fighting tax increases just to throw it all away in one moment. What I did do was lay out the conditions that would be necessary to make sure there would be no tax hikes.
“As the week went on, it became clear that the president wouldn’t accept those conditions,” he continued. “It became clear that they weren’t serious about structural reforms to the entitlement programs. It became clear that they would only do entitlement reform if it came along with tax hikes. It became clear that their vision of tax reform was to maintain many of the current code’s flawed features. That’s when I walked away.”
Boehner emphasized his support for a balanced-budget amendment, which one House GOP aide tells us was a signal to the conservative groups within the conference that he was taking a hard turn away from the White House and toward them, embracing an initiative that they have long championed. “I want to be clear,” Boehner reportedly said, “I support a balanced-budget amendment, and we’re going to fight for one.”…
Read the whole thing, you’ll find that reports of a GOP split in the House are overblown.
Obama waited until the last minute to get involved in these negotiations. Now Tim Geithner is out there issuing ultimatums while Obama’s scaring the elderly. It’s truly revolting.
Update: For a quick snapshot of the federal budget go here.
Update: See below for the amount the government brings in, and pays out, per week. Again, Obama will decide who gets paid and who doesn’t.
Also, Rep. Alan West responded to Obama, and didn’t pull any punches, calling him a “rigid ideologue” who leads by “intimidation and scare tactics.”
“My concern is that we have a President that is not willing to do his job and that is to prioritize the spending. That he is digging in his heels, being very intransigent, and he’s being a rigid ideologue. And he must understand that every single one of his economic policies have failed. So I think it’s time that he realize that he does not have the moral high ground in this argument.”
Also, Mitch McConnell has a new proposal out there that would make Obama own the national debt.
Update 2: Plenty of people are talking about this, including The Other McCain, The Camp of the Saints and That Mr. G Guy, who linked to Kurt Brouwer’s explanation of why the US won’t default even without a debt ceiling deal.
Q: What is a default?
A: In this case, a default would be the failure by the U.S. Treasury to make payments of principal or interest on its debt in a timely manner.
Q: In a given month how much does the Treasury owe as interest on its debt?
A: Roughly about $15–20 billion (more on this in a moment).
Q: How much revenue does the Treasury take in on average in a month?
A: Roughly about $200 billion.
Q: Are you saying the Treasury could pay interest on its debt 10 times over (or more) from monthly income?
A: Yes. Therefore the likelihood of not paying interest on its debt is zero.
Q: But, what about redeeming bonds that come due?
A: As bonds come due, the Treasury would again use monthly income to pay them off. This would lower the debt owed beneath the so-called debt ceiling. Then, the Treasury could turn around and issue debt in that amount up to the debt ceiling.
Q: Why then do Treasury Secretary Geithner and others in government make such apocalyptic statement about the horrors of default.
A: I’m afraid Secretary Geithner and others in government are doing the moral equivalent of yelling “Fire!” in a crowded theater and they are doing so for political reasons rather than financial reasons. They simply do not want any interruptions in the bloated spending underway in Washington and they want to scare Americans into thinking the end of the world is nigh unless the gravy train keeps chugging along.
Read the whole thing. Again, if Social Security recipients don’t receive their checks, it will be Obama’s doing.
Update: Linked by Ironic Surrealism