Dead Mega Debt Deal Lowers Expectations

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Obama to Talk About Debt Negotiations With Lowered Expectations

"Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase.”

-- House Speaker John Boehner, R-Ohio, in a Saturday statement on debt ceiling negotiations.

After a weekend that saw hopes dashed for a mega-deal to cut $4 trillion from the federal budget while raising the nation's debt ceiling, President Obama takes to the White House briefing room Monday ahead of yet another meeting with congressional leaders during which a smaller deficit deal is expected to be discussed.

Though the president proposed the larger deal and said he was ready to “make tough decisions,” House Speaker John Boehner claims Democrats were unwilling to do the larger deal without at least some tax increases and thus, there is no path to passage in the House. Congressional Republicans have long held that they won’t approve any plan to add to America’s credit line that includes adding revenues through tax increases while Democrats want a combination of spending cuts and higher taxes. Both Senate and House Democrats are staunchly opposed to tapping Medicare and Medicaid to find funds as well.

“This package must do no harm to the middle class or to economic growth,” House Minority Leader Nancy Pelosi, D-Calif., said in a statement after Sunday’s meeting. “It must also protect Medicare and Social Security beneficiaries, and we continue to have serious concerns about shifting billions in Medicaid costs to the states.”

Both sides are deeply divided on entitlements with Republicans saying there must be reforms to control deficit spending.

Moreover, Sen. Jim DeMint, R-S.C., said on Fox News Sunday he feels the president has been gaming Republicans by failing to send proposals of his own. “He has been talking about this for six months, and the only proposal he sent us is his budget to raise the debt $10 trillion,” DeMint said. “So it's hard to take him seriously here.”

With talk having turned sour over the weekend, the president, Monday, will have to tamp down expectations many had for a big weekend deal. Talks are deadlocked with both sides holding firm to their ideological lines with only 21 days left until the Treasury Department says the U.S. hits its current debt limit.

With the $4 trillion mega plan now off Boehner’s agenda and a short, stop-gap debt limit increase off the president’s plate, the leaders get to work Monday on something in between. But, in a sense, they’ll come full circle, getting back to the heart of what has driven negotiations for weeks.

What negotiators are looking at is something akin to the $2 trillion plan Vice President had been travelling up and down Pennsylvania Avenue to negotiate with Congress. Those talks ultimately stalled, leading Obama to take the lead in negotiations and to talk more directly to Americans about them and to call for a the more ambitious $4 trillion plan.

Still, a Capitol Hill source tells Fox News that Monday’s 2 p.m. meeting at the White House will likely focus on numbers generated from the Biden talks.

But the president will get the first word when he holds the 11 a.m. news conference to update the progress of the crumbling talks. He’ll likely try to keep provide a positive spin while keeping expectations a bit lower than those many had on Friday.

Negotiators will now be forced to try to work out within days, a plan similar to the one that fell apart after being discussed for weeks.

Economy Hinges on Answers from Debt and Deficit Talks

“I think it's going to take a long time still. This is a very tough economy. And I think for a lot of people, it's going to feel very hard, harder than anything they've experienced in a lifetime now for some time to come. And that is because that is the tragic effects of a crisis this deep and this bad caused by a long period of lost opportunities to do things that made the country stronger.”

-- Treasury Secretary Tim Geithner on NBC’s Meet The Press when asked when Americans would feel an economic recovery.

Treasury Secretary Tim Geithner doesn’t paint a rosy picture of the U.S. economy going forward, saying the effects of the economic downturn and meager recovery will be hard and long-felt by Americans. The Sunday comments come two days after a dreadful jobs report on Friday showed unemployment reached 9.2 percent.

And many agree debt ceiling indecision is dragging the economy down, placing yet another level of significance on the continuing but sputtering debt and deficit talks.

And with finger-pointing and blame-game playing surrounding Sunday night’s White House meeting, there will likely be more questions than answers as the U.S. inches ever closer to Treasury’s August 2 deadline for raising the debt limit.

With a combination of near-continuous poor economic indicators and the uncertainty coming out of Washington surrounding debt negotiations, Geithner’s prognosis takes on an especially bleak context. With Americans spending less in an effort to get their own fiscal houses in order, the mixed messages coming out of Washington as it tries to get its fiscal house in order aren’t inspiring confidence.

Geithner insists passing the August 2 deadline would be calamitous. But in the near-term, not creating certainty could continue many Americans down the long, hard path Geithner describes.

House Looking to Re-Light Incandescent Light Bulbs

“The unanticipated consequence of the ’07 act – Washington-mandated layoffs in the middle of a desperate recession – is one of many examples of what happens when politicians and activists think they know better than consumers and workers.”

-- Rep. Joe Barton, R-Texas, on an incandescent light bulb ban that was part of a 2007 energy bill.

The House of Representatives will vote Monday on a bill introduced by Rep. Joe Barton, R-Texas, that reverses what he calls a de facto ban on incandescent light bulbs.

The Better Use of Light Bulbs Act, or BULB Act, will reverse the ban that has led some to hoard the older-style bulbs that were to be phased out in favor of newer, more energy efficient light bulbs.

Many argue the newer compact fluorescent light bulbs glow an unattractive green color and can expose people to dangerous chemicals if broken.

Under an energy bill signed by then-President George W. Bush, the federal government introduced new efficiency standards that all but prohibit the use of the light first perfected by Thomas Edison.

There is one hitch though. The measure is being considered under an expedited floor schedule that will require a two-thirds majority to pass.

The House will also vote on the energy and water spending bill for this year. The White House recently slammed the bill for making large cuts to renewable energy programs, but stopped short of a veto threat.

And Now, A Word From Charles

“It's the overregulation, the Dodd/Frank financial regulation, EPA, and now the National Labor Relations Board. And of course the uncertainty over Obamacare and taxes. That's why all the money is on the sideline. That's why corporate profits are good and no one is hiring.”

-- Charles Krauthammer on Special Report w/Bret Baier talking about private sector job creation.


Chris Stirewalt is taking some time away from Power Play this week but will return on Monday, July 18.

For the same period, Power Play, the Web show, will be helmed by a rotation of generous colleagues including Shannon Bream, Mike Emanuel, Carl Cameron, James Rosen and Juan Williams.

***Today on “Power Play w/ Chris Stirewalt”: Carl Cameron talks with Rep. Charlie Rangel, D-N.Y. and Sen. Jeff Sessions, R-Ala. Tune in at 11:30 am Eastern at ***