Obama vs. Boehner: The Debt Debacle: Everything You Need to Know in the Eleventh Hour.

Can they come to an agreement?

The most recent figures from the U.S. Treasury Department show that the country’s operating cash balance is $73.7bn.  The BBC announced this morning that Apple’s operating cash balance is $76.4bn.  That’s right, the company that makes our nifty iPods, Pads, and Macs; a company that was

listed on the 2011 Fortune 500 list as the 35th largest company in America, has a higher operating cash flow than our own country!

The logistics of the problems our country faces are staggering. President Obama said this morning that now is the time for both parties to unite and fix the current debt crisis.  Unfortunately there is a little thing called reality, which includes a Republican run House (240 Republicans, 193 Democrats, and 2 vacant seats), a Democrat run Senate (51 Democrats, 47 Republicans, and 2 Independents), a House Speaker who refuses to bend to the will of the U.S. President, and a President who refuses to be taken to school by the Speaker of the House.  That’s a lot of cooks in the kitchen guys. At this point we might be better off getting all the coupon-cutting, bargain-savvy, soccer moms of America to draft up a feasible plan.

The plans we’re working with now:  

Speaker of the House John Boehner’s plan:  Trim $917bn from the US budget deficit over 10 years and raise the debt limit by up to $900bn.  This plan has gained new life after Boehner added a balanced budget amendment to the bill, which rounded up more Tea-Party votes, and after Obama announced this morning that we must reach a compromise NOW.

Senate Majority Leader Harry Reid’s plan (aka the Obama supported plan): Cut $2.2tn from the deficits, and raise the debt ceiling by $2.7tn into 2013. Yes, that’s TRILLION with a ‘T’.

What they have in common: Both trim spending over the next decade, both shun Obama’s call for higher taxes on the wealthy, and both plans would create special committees to draft future tax cuts.

Where they are going to butt heads like rams in mating season: Boehner’s plan would require another debt-limit battle royale during next year’s presidential election.  This will happen over Obama’s dead body.  Obama’s approval ratings have dropped to a new low of 40%, according to today’s Gallup pole, and debt-limit talks during an election year would unlikely help that number rise.  Senate Majority leader Reid’s plan would raise the debt ceiling until the 2012 elections are safely behind the Democrats.

The Obama Administration’s possible options:

Option #1: Bend to the demands of the Republican party: Pshhh yeah right! This would mean no rise in taxes, tax cuts for the highest earners, bigger spending cuts, and appealing (at least partially) many healthcare reform bill items.  If Obama is losing sleep now this option would have him living out his worst nightmare.

Option #2:  Buy more time/Opt for a longer extension: This would mean taking the Republicans 6-8 month extension and running the deadline up against the presidential elections. Or they could request an extension of the debt ceiling.  If the Republicans can agree on extending the raising of the debt ceiling past the 2012 presidential elections this could be the swiftest solution, and the most acceptable solution to both parties.

Option #3:  Brinksmanship: We all keep hearing about this word in the news.  By definition it means to pursue a dangerous policy to the limits of safety before stopping. Essentially, it means ignoring the debt ceiling altogether, prioritizing all payments, or cutting all payments by the government. This option is hell-a-scary to me for several reasons: First, the president could try to invoke the 14th amendment and ignore the debt ceiling. The 14th amendment section IV reads: “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” Wow, that leaves a lot of room for interpretation, and many legal minds believe that Obama would be within his rights to invoke this power.  Of course, if he tries, and his interpretations are wrong it could mean possible impeachment.  Second, brinksmanship is horrifying because it could mean prioritizing payments, like social security, leaving our elderly out in the cold, and raising both legal and logistical issues.  Third, this option could mean cutting ALL payments by the government, which would mean default by the U.S. government.  Investor panic would most likely result, we would lose our AAA credit rating, and our recession status would be raised to beyond the point of economic crisis.

Throughout the decades presidential administrations have asked for, and been granted, a higher debt ceiling.  Do you think it should happen again? And by how much should it increase this time? What do we need as a country? And it’s about time we start asking ourselves, what we can live without?

-Jacob Raehn (Law Student, Law Clerk, Concerned Citizen)

 

Posted in Legal Advice

30 thoughts on “Obama vs. Boehner: The Debt Debacle: Everything You Need to Know in the Eleventh Hour.

  1. Terrie Morrell on said:

    Americans Elect (@AmericansElect)
    7/25/11 4:09 PM
    Want to take down the barriers to real political competition? Read http://t.co/aX5k2Yz for @NYTimesFriedman on Americans Elect. #nytimes

  2. Bilenda on said:

    Wouldn’t it be nice if ANYBODY could have a plan that was in the best interests of the country instead of the their best interest in being re-elected?

  3. Bill Rabon on said:

    The debt cieling has been raised 44 times, if I am correct, and 32 of those times have been for less than one year. Also, from what I have seen, Harry Reids plan is smoke and mirrors when it comes to real cuts. John Boehner’s plan isn’t much better. The last time Boehner made a deal with the dems, it was for 68 Billion which quickly became 38 billion and in reallity turned out to be a few hundred million. There is a saying; “Fool me once shame on you. fool me twice, shame on me.”

  4. Paul Abrams on said:

    Jesus Christ what a good statement Bilenda, you were reading my mind. In this case both parties are to blame for letting the US get in this mess to start with. Freeze the debt right where it is and cut the hell out of everything. Balance the damn budget. Don’t give Obama 1 red cent more to spend. I know I’m a hard a$$ but these times demand a hard A$$. And stop scaring the old people with talk of with holding SS. They paid into it pay them back, and you damn sure better have mine when its time.

  5. Mary Alexander on said:

    Thanks to this author for bringing all of this talk (almost a foreign language) down to my level and making the choices apples to apples. Don’t know if it is a perfect plan, but based on the comparisons in this article, Boehner seems to be offering a better apple. Speaking of which, maybe we could get Apple to come up with a better solution.

  6. John on said:

    In the beginning of our country we were represented by those that best represent the populus such as farmers, carpenters, fisherman and tradesmen. Over the centuries this representation changed to businessmen, doctors and then shifted to Lawyers and career non-profits morons. This shift to people that have nothing to lose and everything to gain has created an environment of people that serve themselves with money collected from others. Some of these people have no knowledge of how to live within means, pay employees or complete a balance sheet or budget or earn a living. The career politician lawyers create laws that feed the sharks and the career non-profit folks create more avenues for others like them.

    Seldom are any laws they pass in support of those that are billed for this honor. This honor of paying for things the real taxpayer don’t need are coming home to roost and now is the time to stop, just stop and go down the list and find what the government is actually paying for such as the smell of frog farts, or recently the size of a homosexual penis.. why do we need to study these things and why do we pay for such lunacy.

    Everytime there is an issue or objection with anything the president does or says they are labled racist or the topic is spun and demonized to threaten the weak and vulerable such as medicare and social security. Others do this when they are threatened to lose their funding to their special interests and means to continue their lifestyle.

    It’s time to stop this madness. It’s time to find out where all the money is spent. It’s time to reel these monkeys in and us give them a budget to work with and nothing more. It’s time for them to start talking in terms of thousands NOT trillions. It used to be millions, it became billions and now it’s trillions and it needs to reverse back. The only way to do this is for everything to stop, count the money, stop the useless funding of projects that have no return on investment and allow businesses to do what they do best and that is being creative and this country to be great again. We need to educate our children since they are the life spring of our future and the future of our society as we know it. We need to stop the funding of career sponges that breed and have no accountablility to anyone, give them a job serving the public building bridges, building roads, cleaning up and standing post in another country in service. If they refuse, say goodbye. If our career politician bozo’s refuse say goodbye to them as well.

    We continue to hear the word comprimise, we should not consider it.

  7. Kim on said:

    I honestly feel like the only reason this debt ceiling request is such a big deal is because so many people want to see Obama fail, at the cost of making America once again a joke. It’s all about keeping the rich people’s pockets lined so they will in turn give some of that moolah to the politicians. I always fail to see how anyone who isn’t a rich, old white man can be a Republican. That’s that only demographic they ever seem to look out for. This new Republican plan wants to cut Pell grants, yet we are behind many countries in education. The GOP says it’s a form of welfare. Well, I am thankful for that welfare because it helped send my tax-paying ass to college. I am a productive citizen who actually gives back to my community by teaching in schools others don’t want to.

    • Steven on said:

      The philosophy that Kim supports in her comments is a big part of the reason we have this problem. If the government does not have the money, then they can’t spend it. There are lot’s of good programs that will need to be cut to balance the budget. BUT IT MUST BE DONE! The government has spent money they don’t have for years and now there has to be a reckoning. It’s no different that your personal finances. If you don’t have the money then you either don’t spend it or you use a credit card, but eventually the credit runs out and you have to pay back the money. The government is no different.

      It’s time to get on board with good fiscal sense or we’ll end up in a depression or worse and whether someone gets a Pell grant will be the least of your worries!

    • Bill Rabon on said:

      Your coments sound racist to me.

      • Kim on said:

        well, i’m white, so i don’t know if that makes a difference.

  8. Aisha Staggers on said:

    In 1973, someone at Motown Records got the ingenious idea that their two biggest selling solo artist, Marvin Gaye and Diana Ross, record a duet album. This wasn’t a novel idea as Marvin had done so in the past and had success, most notably with Tammi Terrell who died in 1970. Although the album is now regarded as a piece of rare creative quality and substance, the recording of “Marvin & Diana” had both artists, who were used to working certain ways individually, digging their heels in the two artists were “like two spoiled kids fighting over the same cookie.” This debt ceiling debate/negotiation is very much the same.

    The idea that reaching across the aisle and passing a bipartisan bill is as ingenious as thinking that Marvin Gaye and Diana Ross could make a record together without one trying to upstage the other. In theory it sounds like it might work. It had in the past for Democrats, most notably Bill Clinton who did not have to deal with an economic and social onslaught of racially tinged rhetoric. Like the concepts of “black unity” and “the American melting pit,” “bipartisanship” is an expression of rare creative quality, but lacking in both substance and true effort. In the coming years, this mess will be viewed for what it is: a reminder that when it comes to political positioning, neither side really wants to compromise as their future in American politics could be forever marred by that one vote. So here we are. Our politicians are behaving like those two spoiled kids fighting over the same cookie. And it is unfortunate that no matter how that cookie just crumbled or who just got the biggest piece, the American people only ended up with the crumbs!

  9. cromeradmin on said:

    UPDATE: The GOP debt plan, aka “The Boehner Bill” was passed today in the House of Reps, and has been submitted to the Senate for a vote, where it has been deemed “dead on arrival”. This will at least push a vote on a balanced budget amendment when it’s all said and done, and the House of Reps will vote on Reid’s debt plan tomorrow. Let’s hope we have some resolution that will the benefit the American people as a WHOLE by Sunday at the latest!

    • Bubba Cromer on said:

      I logged out too soon! About an hour ago, the Senate rejected ” Boehner Bill” 58-41!!! This thing is on FIRE. We are in for one HELLUVA weekend folks.Please let your opinion be known:It matters.
      Gratefully,
      J.L.Mann Cromer, Jr. A/K/A Bubba

  10. Sue Branham on said:

    My husband has been watching C-Span all day. He is really into trying to learn all he can about the situation. Of course me, I don’t remember ever hearing about the debt ceiling before all of this came about. While I do not ignore politics, I had just never heard or paid any attention to it being mentioned. I currently draw SSA and State Retirement(DSS) and my husband is on short term disability due to a knee replacement, so if I don’t get my ck in August, we will be in a pitiful shape but so will everyone else that won’t get theirs. I posted a statement on FB about what would happen to the elderly in nursing facilities if their cks don’t go out to pay for their care? Will they just be put out in the street? Surely not but nursing homes can’t operate without funds. I worked at DSS for almost 30 yrs(20 yrs in the Fraud Unit) and I know what abuse goes on there with the programs but the Federal Govt. really does make it easy for the clilents to cheat. So many changes have happened with the Food Stamp and AFDC Programs, that I am appalled at what the Feds are letting slip thru. BTW, I am going to let him read this article. When we were in the car to go out to supper tonight, we were listening to John Hancock on WBT talk radio and of course, all of the conversation was about what went on today. Then after supper, we tuned into Jason Lewis on WBT but it must have been pre-recorded because he did not report the House passing the the Boehner Bill until about 20 mins. into the broadcast. Of course, he was on the rampage about the situation with the cuts not being anywhere near to what the debt ceiling is. This will be a very interesting weekend and thanks for sending me the article. BTW, I don’t believe I have every “blogged” before. You can teach an old dog(63) new tricks. Sue

  11. Buford Pusser on said:

    let’s be clear(as i take another swig), as someone mentioned, 70 plus debt ceiling raises out of 93 debt ceiling bills…to me this is more about who is inside the beltway and controlling the argument…why has it gotten to this?..as of the beginning of 2001, the u.s. was projected to have a budget surplus of more than $2 trillion by 2011…instead, we’re more than $14 trillion in debt… so what happened?..Much of this can be pinned on the tax cuts instituted under bush in 2001 and 2003, which account for a whopping 13% of the total change in the country’s debt projections…this, combined with the previous president’s initiatives to launch two wars in the middle east, create an unfunded medicare prescription plan and introduce a bailout program for troubled financial institutions…obama certainly isn’t guilt free as he launched a $800 billion stimulus package and extended the tax cuts…add to it the bad economy, and boom…plus, we have to pay interest on what we owe, america!…because of the spiraling nature of this, legislators put up a fight against raising the debt ceiling and now panties are waded up more then when john holmes visited wonderland.

    republican leadership started this, throw in some tea baggers, err tea party, influence and you’ve got war…hey, how about biden sitting in and then passing the hot potato to obama, ouch!…want to touch that monkey?…technically, we already missed the deadline, may-something or other when we stopped paying pension funds that were not “immediately required to be paid”…

    tied up in a bow, i suggest have the us mint print a 1 trillion dollar coin..it’s officially legal tender and the fed must accept as such, drop some off, see ya round!

  12. Andrew Williams on said:

    My advice is to drop former Senators Fritz Hollings, Al Simpson and Bob Dole in the middle of this, and let THEM straighten this ALL out…it would take about 14 1/2 minutes!! Not a minute or a second more! (Good read, Bubba!)

  13. Walter Carr on said:

    A women asked Ben Franklin ” What form of government shall we have?” To which he answered ” A repuiblic madame, if you can keep it.” He was a wise old man when he offered up that answer and he understood that what made it difficult to “keep a republic” is that its voters-moochers- soon figure out that by electing the right-corrupt-representatives they will gain access to the public treasuary and eventually that treasury will be rendered bankrupt.

    The US Treasuary was long ago depleated and now remorseless math has made it impossible for our morally bankrupt politicialy elite to cover it up any longer. The US is the modern era Roman Republic. The Roman Republic suffered civil disorder and tranformed into the Roman Empire. History has a long history of repetition.

    We appear too have been damned to live in interesting times. As for me, I intend to make the best of it. Might I suggest Emperor John Galt?

    Walter

  14. Judy Doucette on said:

    It is Congress’s spending problem that got us here. An individual cannot hope to spend and borrow their way out of debt, so what is Congress thinking? For too long they have “used the People’s money” to buy vote, Social Security, which is NOT an entitlement but a fund we have all paid into all our working lives, as a slush fund to buy approval and balance budgets. We have a President who hasn’t come up with a plan, but only wants more credit to spend, spend, spend. We need to fire them all and start over with people who understand that they work for us, not their own special interests.

  15. Mary Brandes on said:

    I Really HATE politics but The ? is “Do you think it should happen again.” It has to happen again, they can’t tell our elderly that they don’t get their social security checks, and saying “Uh, sorry we don’t have your money” isn’t going to help. They have to figure out how to get us out of this mess and keep it from getting worse. I wouldn’t want their job!!

    All of this political stuff has me worrying about what will happen to our family after Aug 2 if SOMETHING isn’t done. As far as what we can live without,,,,,,no checks next month and there wont be any groceries. There are a lot of people one check away from the streets who have jobs!! Where are all us old people gonna go? :)

  16. Bubba Cromer on said:

    “Ross” please watch that mouth of yours or I’m gonna have to clamp down on your first amendment rights so fast it’ll give you an ice cream freeze headache that’ll last a week! Have a blessed day.

  17. Pat Chisum on said:

    I feel like the people in washington are too busy worrying about who will be the Redskin’s starting QB next year than to work out a long term deal. I don’t understand the economy, government, and most words longer than 5 letters, but I do know that our current system is not working.

    On a side note: as a 25 year old who didn’t ruin the economy by buying a house I couldnt afford, I can’t wait to cut funding to medicare for when the generation who got us in this mess grows old. Thanks for screwing our economy, now its time to pay the piper. If we sacrifice this generation, we can return to a sustainable economy and an America that isn’t a joke.

  18. James Hartman on said:

    Brinksmanship,is not an answer. There are simply two conditions that should be imposed on raising the debt limit, which by the way, we cannot continue to do:

    1. Face the music and cut expenditures, yes, including medicare, medicaid, raise the retirement age and eligibility for social security benefits, eliminate loopholes in the tax code which, without a doubt, must be rewritten. Get the hell out of Iraq, Afghanistan3. Remove our armies from Germany, Japan etc.and stop trying to “nation build”. All of this will save billions and billions and billions of dollars. Eliminate all pork (member services, grants to states for ridiculous projects).

    2. In order to obtain the where-with-all to get to eliminate deficit spending which, of course, got us into this debt mess, increase taxes on those who are most able to pay. Moreover, this business that 51% of the people pay no taxes is an outrage. We all ought to pay something. That will bring in billions even if each current non-payor pays a small amount.

    All our Pres. and members of congress are proving by their outlandish conduct is that democracy does not work, and this is a depressing thiught.

  19. James Hartman on said:

    Brinksmanship,is not an answer. There are simply two conditions that should be imposed on raising the debt limit, which by the way, we cannot continue to do:

    1. Face the music and cut expenditures, yes, including medicare, medicaid, raise the retirement age and eligibility for social security benefits, eliminate loopholes in the tax code which, without a doubt, must be rewritten. Get the hell out of Iraq, Afghanistan3. Remove our armies from Germany, Japan etc.and stop trying to “nation build”. All of this will save billions and billions and billions of dollars. Eliminate all pork (member services, grants to states for ridiculous projects).

    2. In order to obtain the where-with-all to get to eliminate deficit spending which, of course, got us into this debt mess, increase taxes on those who are most able to pay. Moreover, this business that 51% of the people pay no taxes is an outrage. We all ought to pay something. That will bring in billions even if each current non-payor pays a small amount.

    All our Pres. and members of congress are proving by their outlandish conduct is that democracy does not work, and this is a depressing thought.

  20. Terri Mostiller on said:

    The government needs someone with an MBA to handle our money. It’s obvious our government has had trouble since three forevers(Republicans and Democrats). If our checkbook does not balance, WE have to figure out why if WE have NO money in our checking accounts we don’t need an MBA to tell us WE have to wait until WE do to spend more money.

    What chaps my ass are the seniors that depend on SS checks to live on. It’s not like they can go out and work, at least the majority of them. We need to take care of our elderly. We are rapidly becoming them!!

  21. Chris M on said:

    Why dont they spend money more wisely and stop being stupid about when they do? I was In The United States Marine Corps and when we needed new stuff ordered it was a huge chain of command to go through to do it but it got done. The problem is you see the price of what you have to purchase and its like this” I can get that same damn thing at a wal-mart shelf half price” Maybe if the government looked into how bad it gets hosed they’d realize they would have more money for other things and wouldn’t have to raise the debt ceiling.

  22. Colorguy on said:

    The fact that the debt ceiling has always been raised proves the point that it is really no ceiling at all for the government. Our representatives CANNOT control themselves and it is against human nature to expect them to do so. The best emergency brake to me is a Balanced Budget Amendment to the Constitution. It would be great to have in it that if the Congressional leadership fails to balance the budget and reduce the debt, they are FIRED! In other words, it would state in some way that they are ineligible for reelection.

    Secondly, it is ridiculous to think that we can get our spending controled, balance the yearly budgets, and pay down the national debt without SOME PAIN?! When we have to cut back as families, don’t we have to do without in some areas? Our politicians are afraid to do the right thing. Make serious cuts – 10 – 15% or maybe just back to 2008 levels right NOW! This is what is needed, but they are too afraid to do it. They don’t want to upset the voters. Pitiful!

  23. Joe Gira on said:

    I’m afraid the debt ceiling must be raised, as much as I oppose it. The consequences are too risky for me to support my base disire to see what happens if we let it all go to pot. What strikes me as missing in all these debates is an understanding of what government is there to do. It has lost the narrative the people need to understand and support our government. I has become a beast unto itself, too often, serving its own interests with wasteful duplication of efforts and resources.

    The two priorities set out in the constitution are to provide for the defence and promote the general welfare of our country. While providing for a common defence has been pretty straight forward (minus the hundreds of billions that go toward weapons and programs that never materialize) it is the promotion of the general welfare, IMO, that needs clarification. I beleive that in general, people want to feel they receive fair returns for the taxes they pay and otherwise be left alone. The programs that our tax dollars support, often make no sense. Road and bridges are pretty obvious. Social security and medicare are woven deep into our societal frabic and whlie people want to see change, they don’t want the outcome to change.

    Then there is everything else that can be debated. Education, healthcare, research and development, space exploration, food stamps, and the list goes on. While it is a shame we don’t teach civics in schools any more, or in any depth, by the time you graduate from high school, there should be a clear understanding of what our responsibility is to the government and what governments responsibility to us is.

    If we don’t stay connected and hold our elected officials accountable to follow through on the desire of people like me and Belinda, we might need to change our motto from Out of Many, One to Out of Many, One Left Standing

  24. Linda Amick on said:

    We didn’t suddenly get into this mess – why did they wait so long to fix it? Why was SS transferred to the general fund & spent? Why do we send billions overseas when we can’t help our own needy American citizens? Why don’t they have the same benefits we do? Why do they forget who they represent? Why do we keep electing them?

  25. Bilenda on said:

    Linda Amick is asking all the right questions and oil is not the answer to all of them. The last one is the most important. None of them should be re-elected, none of them. The Senate in particular is a disgrace to this country. It has become a private club where the members help each other regardless of party affiliation and ignore who sent them there and what they are supposed to do while they are there.

    Boehner needs to go and so do Harry and Nancy. Again, they all need to go. If only we could sell arrogance- we would not need to raise the national debt- we would not have any.

  26. Rick roll on said:

    I think we see now what price there was to pay for the political brinkmanship we just saw… Dow down about 1200 points and still counting.. I can only imagine the scenario if we had actually defaulted. Sad… this is a split government… the ONLY to govern given these circumstances is to compromise.

    $4 Trillion in cuts for a trillion in revenue sounded like a pretty good deal to me…

    BTW.. if tax cuts were all that was needed for everything to be great, then how the hell did we almost end up with the 2nd Great Depression in Dec 2008????