Category: debt ceiling


U.S. Senate leadership

On the evening of July 31, 2011, the Senate and The House of Representatives have reached a tentative agreement. Ending a perilous stalemate, President Obama announced an agreement on Sunday night on a compromise that would avoid the nation’s first-ever financial default. The deal would cut more than $2 trillion from federal spending over a decade.

This agreement is tentative and the Congress must ratify the deal with a vote. No votes were expected in either house of Congress until Monday, to give rank and file lawmakers time to review the package. The framework of the deal would give the President a debt ceiling increase of up to $2.4 trillion, and guarantee an equal amount of deficit reduction over the next 10 years.

“Default would have had a devastating effect on our economy,” Obama said at the White House, relaying the news to the American people and financial market around the world. He thanked both the leaders of each party.  

After a tough week of meetings and negotiations, the House of Representatives, Senate leadership, and the president are able to feel good about their accomplishment. According to Democrats and Republican sources, here are the key elements of the deal. There is still work to be done and the leaders of both parties are rounding up votes for the deal.

The debt ceiling increase tentatively would be around $2.1 trillion and the spending cuts would be equal to increase over 10 years. The formation of a special Congressional committee to recommend further deficit reductions that may take the form of spending cuts or tax increases. The special committee must make recommendations by late November, before the Thanksgiving recess.

Congress must also approve those cuts by December 23, or automotive cuts across the board go into effect, including cuts to federal defense programs and Medicare. This trigger is designed to force action on the deficit reduction committee’s recommendations to both Democrats and Republicans. There would also be a vote in both houses on a balanced budget amendment.

As the Congress gets down to the 11th hour, the two houses are close to a deal. During President Bush’s eight years the debt limit was raised 19 times, without the fuss and fight of this Congress. When Bush took office the debt limit was $5.95 trillion, and when he left it was $9.81 trillion.

Top Aide to President Obama, Valerie Jarrett

President Obama has been deeply involved in trying to win a debt deal that both parties find agreeable and can work with. “He’s getting absolutely no sleep. He’s working tirelessly, meeting with his economic team, doing a lot of outreach, exploring all kinds of possibilities for compromise,” top Obama aide Valerie Jarrett told Reuters Insider. This has translated into even longer days than normal at the White House, which already begins with a senior staff meeting at 7:30 am in the morning.

It appears that all the hard work has paid off for President Obama, and his administration. It is still too early to relax, but all the leaders are announcing that a deal has been struck. Democrats won’t like the fact that Medicare could be exposed to automatic cuts, but the sizes of the Medicare cuts are limited. They are designed to be taken from Medicare providers, and not beneficiaries.

Finally, the House of Representatives and the Senate are starting to compromise, and do what is best for the citizens of the country. Somehow President Obama must make bipartisan a reality in Washington, and get the two parties to cooperate, and work together. Making decisions together that improve and enhance the country is the job of our representatives.   

3 Presidents, no solution: NAACP president Benjamin Jealous, President Obama, and National Urban Leage Marc Morial

On Thursday July 21, 2011, President Obama held a meeting at the White House, with NAACP president Benjamin Jealous, and National Urban League president Marc Morial. These are the two oldest and largest Black organizations in the country. The purpose and goal of the meeting was vague, but the leaders had an opportunity to share their opinions on a variety of subjects with the president.

The meeting lasted for about 30 minutes to an hour, and President Obama reiterated that reducing unemployment, which disproportionately burdens the African-American community, remained a top priority for him and his administration. It is important that the president has acknowledged that there is a crisis in unemployment in the Black community, and his administration is willing to confront the problem.

Presidents Morial and Jealous

On July 17, 2011, Marc Morial said on NBC’s Meet the Press, “We have a job crisis in America, and the nation needs a job plan. We have 14 million out of work. The Black unemployment rate is at stifling levels. It’s in fact, increased since the recovery has been begun.”

In June 2009, the unemployment rate for African-Americans was 14.9% and in June this year,

 the rate is 16.2%. White unemployment has dropped from 8.7% to 8.1%, and the Hispanic rate has dropped from 12.2% to 11.6%. Also the Asian rate has dropped from 8.2% to 6.8%.

Marc Morial has pointed out that certain segments in the Black labor force showed even higher rates of unemployment. The most recent unemployment rate for Blacks between the ages of 16 and 24 years was 31.4%. In certain cities, the unemployment rate for Black men is over 50%.

 

Representative Emmanuel Cleaver

Members of the Congressional Black Caucus recently publicly accused the Obama administration of failing to adequately address a veritable epidemic of African-American unemployment. “Can you imagine a situation where any other group of workers, if 34% of white women were out there looking for work and couldn’t find it? There would be rallies, congressional hearings, and protest marches; there is no way that would be allowed to stand,” says Representative Emanuel Cleaver, a Missouri Democrat.

The Congressional Black Caucus has introduced many different bills to attack Black unemployment rates. Debates about Black unemployment persist, but the Obama administration has focused on broad based initiatives aimed at lowering unemployment in general. It appears that the Obama administration needs a specific plan to address Black unemployment.

At the meeting with Morial and Jealous, the president discussed the efforts his administration  has made to address urban economic development through initiatives such as Strong Cities and Strong Communities. These programs act to spur economic growth in urban centers while ensuring taxpayer dollars are used wisely and efficiently.

Morial and Jealous shared their ideas with President Obama for resolving high unemployment in the Black community. The leaders say the president indicated he was willing to consider some of their ideas about job creation and employment discrimination when he is done with the debt crisis.

The two leaders also discussed with the president their opinions on the debt reduction plan. “We emphasized that no steps should be taken that gonna cost this nation jobs. No steps should be taken that’s gonna force vulnerable Americans to pay the cost of a debt reduction plan,” Morial said of the meeting. He said the president nodded his head in agreement.

It is significant that President Obama is taking time out to access and discuss the mood of the African American community. But the wheels of the federal political machine turn slowly and take time. It is important that our political leaders and Congressional Black Caucus continue to apply pressure to the White House, and mobilize the different state, local, and community Black political organizations.

President Obama gets tough on Republicans concerning Debt Limit …by Roger Caldwell.

Last week President Obama decided to take his battle with the Republicans to the street and the public. He held a press conference and he sharply chastised Republicans as supporting tax breaks for jet-setting corporate executives, at the expense of college scholarships or medical research. The president also criticized members of the Republicans of not being prepared with their facts on the debt ceiling, and more concerned with taking a vacation.

Representative Raul Labrador (R-Idaho)

This press conference did not sit well with the Republicans and they immediately began to fire back at the president. Senate Minority Leader Mitch McConnell called on Obama to drop what he’s doing and come to the Capitol for a meeting.

Representative Raul Labrador said, “House Republicans acted, and now we await your spending reduction plan – perhaps not with open arms, but we have open minds.”

The Democrats and the Republicans have been debating for the last month over raising the nation’s borrowing limit. Both parties agree that in order for the country to continue to pay its bills, it is necessary to raise the debt ceiling. Since 2001 the credit limit has been raised 10 times, so every time the lawmakers vote for spending hikes essentially they have raised the ceiling.

Nevertheless, it is necessary to formally vote on the size of the increase, and some lawmakers want a bigger increase and others want a smaller increase. The first limit was set in 1917 at $11.5 billion, and the current debt limit is set at $14.2 trillion. The country’s accrued debt hit that number on May 16, 2011.

Either party or the president is not happy with our country being $14.2 trillion in debt, and the president at his news conference laid out his reason why it is necessary to raise the debt limit. “These are bills that Congress ran up,” Obama said, in explaining why the U.S. must not default on its debt obligations. “They took the vacation. They bought the car. Now they’re saying, maybe we don’t have to pay.”

Treasury Secretary Timothy Geithner

Treasury Secretary Geithner has set the date August 2, 2011 as the day when the debt limit must be raised for the country to continue to pay its bills. At this moment both parties are busy playing politics, but at some time soon every one will have to agree. Politics is a nerve racking business and our lawmakers tend to wait till the last days to strike a compromise.

Following President Obama’s press conference, White House Chief of Staff Bill Daley had strong words for the Republicans. Many political pundits and experts are concerned with the bluntness of the Obama’s administration and are afraid that their tough position will drive the two sides further apart.

Bill Daley said, “I find that at times people who continually attack the president, beat him up on not only on

White House Chief of Staff Bill Daley

policy, personality, and a whole bunch of things. The minute he takes a tone that is a little more direct, and it was not personal. It was direct in that the leaders of Congress in both parties and especially those who are saying that revenue are off the table period in trying to solve this problem, that somehow that’s going to hurt feelings of people. This is not a time to worry about feelings; this is a time to get results.”

Maybe the president is now putting on his boxing gloves, and he is going toe to toe with the Republican Party. It is too early to make that assumption, but in his last news conference, the president was aggressive and assertive. The president was elected to lead and sometime to lead, it is necessary to hurt feelings to get the job done.