Fox News Sunday Snippets: July 24, 2011
With the August 2 debt ceiling deadline closing in, leaders from both parties are scrambling to agree on a deal that can muster passage from both houses of Congress.
This week, Treaury Secretary Tim Geithner joins "Fox News Sunday" to discuss the administration's position in the negotiations as well as give his perspective on what a deal would mean to the markets and the economy.
Next, we have an exclusive interview with Speaker of the House John Boehner, the Republican leader at the center of these ongoing negotiations. We will get an update from him on where a deal stands and his take on whether a deal will be ready for Congress's consideration this week.
What we are reading to prepare for the show.
House Speaker John Boehner hopes to have a framework for a debt-limit plan in place by Sunday afternoon to avoid roiling the Asian markets, he told colleagues on a Saturday conference call.
An immediate deal would raise the debt ceiling and cut spending, Boehner said, and there are still options on the table for more comprehensive deficit reduction of $3 trillion to $5 trillion, according to GOP sources on the call. He is also aiming for a framework in the form of Cut, Cap and Balance — the plan that has failed in the Senate, Obama has threatened to veto but House Republicans passed overwhelmingly.
Lawmakers Renew Push to Reach Deal on Cutting Deficit-New York Times
The tense series of high-powered meetings on Saturday was reflective of the sense of urgency among lawmakers with little more than a week before the federal government risks defaulting on its debts, a fate that could be avoided if Congress agrees to increase the $14.3 trillion debt ceiling. Congressional Republicans, Democrats and Mr. Obama have seized on the debt fight as a way to win approval of a debt-reduction package but have disagreed sharply over what it should include.
The speaker, who abruptly broke off budget talks with Mr. Obama on Friday evening, said that he hoped the plan could be finished within 24 hours and indicated on the conference call with House members that the savings would most likely be achieved in two stages. As described by knowledgeable Congressional aides, the agreement under discussion would enact a first round of cuts of just under $1 trillion, an amount they said was sufficient to clear the way for a debt limit increase through 2011. A second increase would follow after a newly created legislative commission considered a broader range of spending cuts, program overhauls and potential revenue increases.
Boehner tells GOP he will unveil new debt strategy-Washington Post
In a conference call with House Republicans, Boehner ruled out the most likely alternative to a short-term extension: a process proposed by McConnell this month that would authorize Obama to raise the debt limit in installments, without explicit congressional approval.
“The goal of our discussions now with the leaders is not to do something in the Reid-McConnell framework,” Boehner said, according to one participant. “It will be something new.”
A senior GOP aide, meanwhile, accused Obama of trying to shape the debt-limit debate to suit his political needs, saying, “It would be terribly unfortunate if the president was willing to veto a debt-limit increase simply because its timing would not be ideal for his reelection campaign.”
Meanwhile, there were lingering doubts about Boehner’s ability to rally support for a debt-limit increase of any size or duration. Many House Republicans continue to push their plan to sharply cut spending over the next decade and adopt a constitutional amendment requiring Congress to balance the budget. Such a plan passed the House, but failed Friday in the Senate on a party-line vote.
Default Seen as Unlikely, but Markets Prepare-New York Times
Over the last few weeks staff members in the Office of Debt Management, a part of the Treasury, have been phoning the desks of the 20 major Wall Street dealers for Treasury bonds to assess investor demand for coming debt auctions, and to seek assurances that the dealers themselves will buy any surplus.
About $87 billion in federal debt comes due on Aug. 4, and roughly $410 billion comes due throughout the rest of August. If interest rates climbed even a tenth of a percentage point, the added cost to roll over the debt would be an extra $500 million a year.
Wall Street is also worried about the effect that a ratings downgrade would have on various assets that are implicitly backed by the federal government, including agency mortgages or municipal bonds.
Leaders in Congress scramble toward deal-Boston Globe
Despite the shortness of time, and the high-stakes involved, both Democrats and Republicans pushed for a complex, comprehensive, and long-term deal rather than settle for a stop-gap measure.
“Absolutely, positively not,’’ House minority leader Nancy Pelosi said yesterday, when asked whether a short-term deal was viable. Obama has continued to insist that any legislation be for a long-term extension.
“I will not support any short-term agreement, and neither will President Obama nor leader Pelosi,’’ Senate majority leader Harry Reid said. “We seek an extension of the debt ceiling through at least the end of 2012.’’
Democrats appeared to be digging in last night, illustrating either last-minute political posturing to get a better deal or an impasse in the talks.
“I am deeply disappointed in the status of negotiations with my Republican colleagues,’’ Reid said in a statement, specifically saying he would oppose any agreement that does not raise the debt ceiling through the end of 2012.
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