Yes, the same one that Bachmann signed and for which she took so much heat that even Gingrich ended up backing away from it.
Thus far it’s just her and Santorum. Your move, Mr. Pawlenty.
When it was first circulated last week, the introduction to the pledge stated that African American children were more likely to be raised in two-parent households when they were born into slavery than they are today. The group struck that language and apologized after black ministers complained, but it said it stands by the rest of the document.
Andrea Saul, a spokeswoman for Romney, told The Associated Press in a written statement Tuesday that Romney “strongly supports traditional marriage,” but that the oath “contained references and provisions that were undignified and inappropriate for a presidential campaign.”…
Romney, who supported rights for gay couples in Massachusetts, was criticized in Iowa by some Iowa social conservatives during his 2008 campaign, when he finished second in the caucuses after aggressively courting Christian conservatives…
The Family Leader, an organization formed last year and positioning itself to be an influential player in the 2012 caucuses, said Tuesday they stand by the 14 policy positions listed under the promise to “defend and to uphold the institution of marriage as only between one man and one woman.”
Here’s a PDF of the pledge, which is all over the map politically. I’m keen to hear which parts specifically he thought were “undignified and inappropriate” for a campaign, especially now that the radioactive language about slavery has been dropped. As for the politics of this, it would have caused him more headaches to sign than not to sign. He’s all but given up on Iowa and he’ll never be social cons’ candidate of choice, so he’s better off using this to draw a distinction with Bachmann that he can reference later. Until someone threatens him in New Hampshire he’ll stay focused on the general election and his electability vis-a-vis Obama. This is one less thing the Democrats can use against him to knock him off-message from the economy.
Can’t wait to see what T-Paw does here. He probably has to sign to protect himself among social conservatives — it might finish him off in Iowa if he didn’t and he can’t afford that like Mitt can — but if he does then he’ll be dealing with this from now until election day, assuming he’s nominated. Tough call. Oh — incidentally, the AP claims that Romney’s the first Republican presidential candidate to reject the Iowa pledge. Not so.
“Former Sen. Alan Simpson, R-Wyo., the GOP co-chair of President Obama’s deficit commission, told ABC News that ‘The American people are disgusted at both parties’ for not being able to agree on a measure to reduce the deficit…
“‘Reagan raised taxes,’ Simpson said. ‘We’ve never had less revenue to run this country since the Korean war.’
“Contrary to some Republicans expressing skepticism about the Aug. 2 default date, Simpson said that Treasury Secretary ‘Tim Geithner ain’t fooling.’”
***
“[M]any Congressional Republicans seem to be spoiling for a fight, calculating that some level of turmoil caused by a federal default might be what it takes to give them the chance to right the nation’s fiscal ship…
“Representative Paul D. Ryan of Wisconsin, the Budget Committee chairman seen as the voice of fiscal authority among House Republicans, said that he believed an agreement leading to a debt limit increase would eventually be reached, but that the impasse could extend beyond the administration’s Aug. 2 drop-dead date.
“‘Let’s say we go past Aug. 2,’ he said in an interview. ‘As time goes on, the situation deteriorates, so I do believe there will be something.’ He pointed to ‘macroeconomic circumstances and credit markets — and also paying the bills — Social Security, Medicare, the troops.’
“‘I think there ultimately will be something,’ he said. ‘I really honestly don’t know what it’s going to be. I really don’t.’”
***
The hotter precincts of the blogosphere were calling [McConnell's proposal] a sellout yesterday, though they might want to think before they shout. The debt ceiling is going to be increased one way or another, and the only question has been what if anything Republicans could get in return. If Mr. Obama insists on a tax increase, and Republicans won’t vote for one, then what’s the alternative to Mr. McConnell’s maneuver?…
“The tea party/talk-radio expectations for what Republicans can accomplish over the debt-limit showdown have always been unrealistic. As former Senator Phil Gramm once told us, never take a hostage you’re not prepared to shoot. Republicans aren’t prepared to stop a debt-limit increase because the political costs are unbearable. Republicans might have played this game better, but the truth is that Mr. Obama has more cards to play.
“The entitlement state can’t be reformed by one house of Congress in one year against a determined President and Senate held by the other party. It requires more than one election. The Obama Democrats have staged a spending blowout to 24% of GDP and rising, and now they want to find a way to finance it to make it permanent. Those are the real stakes of 2012.
“Even if Mr. Obama gets his debt-limit increase without any spending cuts, he will pay a price for the privilege. He’ll have reinforced his well-earned reputation as a spender with no modern peer. He’ll own the record deficits and fast-rising debt. And he’ll own the U.S. credit-rating downgrade to AA if Standard & Poor’s so decides.”
***
“Most people don’t care about the deficit, much less the debt ceiling. They care about jobs and the economy–which is the real advantage Republicans have in the coming campaign.
“If McConnell actually proposes to pull an Emily Littella and say ‘Never mind’ about the debt ceiling, the President can pocket this inadvertent gesture of sanity, sign the debt ceiling extension…and then come right back with an economic package reducing the deficit $2.4 trillion over the next ten years, including the budget cuts that both sides have agreed upon plus the loophole closing revenue raisers–corporate jets, oil and ethanol subsidies, and hedge fund manager tax breaks–that 80% of the American people favor. Let the Republicans vote that one down, or refuse to consider it at all in the House of Representatives. Barack Obama would have a lovely issue to run on.
“But I don’t believe for a moment that McConnell is going to do this. He’s desperate, facing a deal that either includes revenue increases or doesn’t happen at all. He’s blinking as fast as he can.”
***
“There is no constitutional authority for the legislative branch to surrender its clearly delineated duty to write bills for raising revenue and borrow money on the credit of the United States.
“Treasury Secretary Tim Geithner recently employed a clever but easily falsifiable argument, which cites Section 4 of the 14th Amendment to claim that the president can override the separation of powers…
“McConnell’s enthusiasm for this unconstitutional gimmick is disheartening, but it does not change the law. Congress has no more right to give up its authority than the president has to confiscate it.”
***
“Despite intense lobbying of Congress by President Obama, Treasury Secretary Timothy Geithner, and others in the administration about the economic urgency for raising the nation’s debt limit, fewer than one in four Americans favor the general idea of raising it. Also, Americans are significantly more concerned about the budgetary risk of giving the government a new license to spend than they are about the potential economic consequences that would result from not raising the debt limit. Both of these findings put Americans more on congressional Republicans’ side of the debate than Obama’s — at least in terms of political leverage as the two sides negotiate a deal.”
***
Via Verum Serum.
***
“I can guarantee you, Mark, that plan is going nowhere.” Click the image to listen.
Observer Schoolboy Cricketer of the Year 2011 is Ramith Rambukwella
As in the previous years the’ Observer Schoolboy cricketer of the year 2011’ was selected by sending coupons appeared in the Sunday Observer newspaper. Ramith Rambukwella, of Royal College, the son of the Media Minister Keheliya Rambukwella was elected the winner of the coveted trophy. It is pertinent to mentioned that he had polled 50,000 more votes that the amount of votes polled by the runner- up
Minister of Sports Honorable Mahindananda Aluthgamage has approved the appointment of former Sri Lankan Test and One day player, Rumesh Ratnayake as Sri Lanka’s Head coach for the forthcoming Test, One day and T20 series against the Australians.
Ratnayake made his Test debut against New Zealand in 1982-1983 at Christchurch. He took 73 Test wickets in a career which spanned 26 Test Matches.
Rumesh Ratnayake with his whippy action, lively pace and bounce was Sri Lanka’s strike bowler during his playing days. He made his ODI debut against the Indians in Bangalore in 1982, and captured 76 ODI Wickets in his illustrious career, which ended in December 1993.
Rumesh Ratnayake was a member of the Sri Lanka Team that won its first ever Test in 1985, after the Country gained Test status in 1982. He is a recipient of two level three coaching certificates, level 3 Australia in 2009, and ACC level 3 in 2010. Rumesh is currently an Asia Cricket Council development officer, domiciled in Malaysia.
Sri Lanka 176 and 71 for 1 need 392 more runs to beat Leicestershire 341 and 297 for 8 dec
Scorecard
Sri Lanka A face a huge final-day run chase after being set 463 by Leicestershire although started briskly to reach 71 for 1 despite losing a wicket to the first ball of their second innings.
Leicestershire built their lead at a steady pace with useful contributions throughout the order. Greg Smith hit 67 and took his second-wicket stand with James Taylor to 102 before Sri Lanka staged a mini fightback.
Four wickets fell for 37, including two to offspinner Sachithra Senanayake, but Leicestershire's advantage was always substantial. It was further extended by Wayne White (57) and Tom New (62) as they added 129 in 28 overs to take the game away from the visitors.
Sri Lanka didn't get the solid start they needed to the chase as Malinda Warnapura was caught behind first ball off Nadeem Malik but Lahiru Thirimanne, who was part of the recent Test side that toured England, and Bhanuka Rajapaksascore freely during a truncated final session.
By Mike Conlon, ForexNews.com on Jul 15, 2011 01:18:34 GMT
Stressful Situations!
Specifically, I am referring to two events taking place around the globe that have effectively put the markets on edge. The first today is the release of the results of the European bank stress tests, and then the on-going saga of the debt ceiling debate here in the US.
The bank stress tests are intended to allay the fears of the marketplace that the European banks are adequately capitalized and that they could withstand a major shock to the system such as sovereign default. This will likely throw a few banks under the bus which is obviously bad for some individual players, but this has to be done in order to ensure “credibility” that the tests were sufficient.
The debt ceiling debate is likely to be more drawn out as the politics behind the scenes have gotten so ugly that neither side is willing to budge. So we are headed on a collision course toward disaster unless one side is willing to compromise. S&P has put the US on negative credit watch and said that a debt downgrade may be forthcoming if a deal is not reached.
This has induced some mild risk aversion in the markets today, with stocks flat to slightly lower and commodities pulling back.
In the forex market:
Aussie (AUD): The Aussie is mostly lower on risk aversion and that money flows are leaving the Aussie in favor of the Kiwi on rate hike expectations.
Kiwi (NZD): The Kiwi is higher despite the risk in the marketplace after the much better than expected GDP report showed that the economy was growing at 1.4% vs. an expectation of .5% after having to deal with the two earthquakes. The market believes that this positive growth story means that the RBNZ could be next to raise rates. (Click chart to enlarge)
Loonie (CAD): The Loonie is somewhat higher against the Dollar despite lower oil prices and mild risk aversion in the markets. Canada’s close ties to the US economy make the Loonie slightly more desirable when the risk comes from Europe rather than the US.
Euro (EUR): The Euro is slightly lower ahead of the bank stress tests results that are due out at 12PM EST. Trade balance figures came in better than expected, though the market is more concerned with the news at noon.
Pound (GBP): The Pound is mixed as austerity measures are bringing down inflation, albeit slowly. This will likely mean that the BOE will be on hold for some time.
Swissie (CHF): The Swissie has been on a tear of late as its safe-haven status has been exploited by those who do not want to own the US dollar. (Click chart to enlarge)
Dollar (USD): The Dollar has been moving higher after Bernanke backed away from his comments the other day that has led the market to believe that QE3 is very much on the table. CPI data came in largely as expected this morning, showing a headline figure of 3.6%. However, the Empire manufacturing index came in at –3.76 vs. an expectation of 5. Michigan consumer confidence figures are due out later this morning.
Yen (JPY): Much like the Swissie, the Yen has been appreciating of late as it’s a Dollar alternative for a safe haven play. Too much strengthening could cause the BOJ to take action, especially if QE3 looks more like a reality.
With the stress in the marketplace adding to the already declining economic data, it is only a matter of time before something gives. The Euro bank stress tests are intended to instill confidence in an already skeptical market and if the tests are deemed to not be rigid enough, then this may become a non-issue. Nevertheless, expect volatility surrounding the release.
Here in the US, we have a different kind of stress over the debt ceiling debate. President Obama will be speaking on it later this morning but expect the same political rhetoric to take place. Meanwhile, markets that are already jittery over a worsening economy have extra reasons to be cautious. Potential US credit downgrades are adding fuel to fire, as they typically occur after the fact.
Prospects don’t look great for the global economy despite better than expected corporate stock earnings. There is a major disconnect between the markets and the real economy, so don’t be surprised if at some point they begin to resemble each other more realistically.
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
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Ruhuna kicked-off the Sri Lanka Cricket Inter-Provincial Twenty20 Tournament with a convincing 40-run win against Kandurata at the R Premadasa Stadium, Colombo. Being asked to bat, Ruhuna put on a competitive 154 for 7, driven by a knock of 63 off 53 balls by Dinesh Chandimal. The chase was off to a terrible start, as offpinner Janaka Gunaratne - who opened the bowling for Ruhuna - and some poor running combined to reduce Kandurata to 4 for 3 in the fourth over. Kandurata didn't recover, slipping to 27 for 5 and 30 for 6, before a rapid, unbeaten 55 from No. 8 Farveez Maharoof carried them to a respectable 114 for 7 in 20.
In the other game of the day at the same venue, Wayamba gained a point against Basnahira by winning a bowl-out, after the match was abandoned due to rain without a ball being bowled.
We came to England with high hopes for the one-day series so it was a huge disappointment to lose 3-2. I thought we played some very good cricket but we had a couple of really poor games as well. Old Trafford was the closest match of the whole series and unfortunately we couldn't do quite enough to get over the line. It wasn't a polished performance from us and there are a lot of areas to improve on. But it's not all doom and gloom. We showed our fighting spirit and almost pulled the game around at the end.
It's actually quite frustrating looking back on the tour and thinking how good it could have been. We lost the Test series because of one session in Cardiff and in the one-day series it was down to a couple of batting collapses at crucial moments. We can't be too disappointed because we played some really good cricket and weren't outplayed for long periods of time. Hopefully the young players will have learned from their experiences in England.
It was definitely a missed opportunity not to make the most of an Old Trafford wicket that suited our style of cricket. But you still have to play a good game of cricket and we made an awful start by giving away too many runs in the first 10 overs. It was always going to be tough for us to come back from that. However, England were looking at getting 350 and we managed to haul them back brilliantly which was a great effort. But we lost the match in the first 10 overs. Despite chasing hard we made too many mistakes.
Our performance at Old Trafford really summed up one of our major problems on the tour when we lost three early wickets in the run-chase and it's something we need to put right. However, on this occasion we felt we had to go quite hard against the new ball so that it was more comfortable for the boys coming in lower down the order. It was always going to be much harder for them to score at seven or eight an over. Angelo Mathews batted really well while Jeevan Mendis and Dinesh Chandimal played superbly and Kumar Sangakkara helped give us a base from where we almost managed to get the total. There is plenty of room to improve but there are promising signs for the future.
One of the key aims of this tour was to try and identify a new group of Sri Lanka cricketers. After the World Cup we knew there would be some changes and we needed to introduce players with an eye on the next tournament in four years time. We have found some really talented players; Dinesh has played superbly and Jeevan has impressed. Angelo has been with us for a while and we knew what he was capable of, but with Chandimal and Mendis we found out more about them and hopefully we can move forward with them. We have some areas we still need to try and fill; we could do with finding some more fast bowlers and another allrounder or two for the next World Cup. These are things we will keep looking out for but the early signs have been really good.
Our captain, Tillakaratne Dilshan, had a tough one-day series but I've played enough cricket to realise we all go through slumps in form. He is a fantastic player who can turn matches around on his own and when you remove that kind player from the equation it makes it tough. But Dilshan is a fighter. I'm sure he won't change his game and he'll bounce back.
Sangakkara touched on a very sensitive issue, but it's something everyone was talking about back home, not just us here. I think it was a great speech.
As a captain I thought he handled things pretty well. It was a big, big tour for him but I think he showed what he was capable of with that hundred at Lord's, which he made with a broken thumb. If it hadn't been for that injury I'm sure his form in the one-day series would have been a lot different. He would have been able to prepare for the series properly but instead he had to wait two weeks while his thumb healed. There were a lot of things that went against him but, overall, there had been a lot of changes to the team after the World Cup and I thought he did really well.
I was back down the order to No. 4 at Old Trafford but I'm not quite sure what my long-term role will now be. These are things we need to keep working on as we introduce youngsters. It was just a tactical decision and it didn't work for us that day, but on another day it will. In the future, I'm going to be very flexible to see what's best for the team. If that means opening the batting I'll be happy to fill that position. It's all about finding the right balance.
Last week I talked about the challenges facing Alastair Cook as he leads England's one-day cricket forward and both he and his team were impressive in the last two matches. It will take time for him to settle into the captaincy and also for the other players to work around him. They have some quality players in that middle order and everyone has to find their individual roles and then be consistent with that. Cook is a very good player, he's proved that in Test cricket and it's a great challenge to bring that to one-day cricket.
One of major talking points that came up during the series was Kumar's MCC Spirit of Cricket Lecture. I wasn't at the actual event, but know how long he spent writing the speech between the matches. I listened to it afterwards and it was very impressive. A lot of people have taken an interest. It was a bit controversial in places but said some important things about Sri Lanka cricket and what it means to people. He touched on a very sensitive issue, but it's something everyone was talking about back home, not just us here. I think it was a great speech.
We are finishing the tour with a couple of matches in Scotland, but our next major series is against Australia at home. We fancy our chances against anyone in our own conditions, which we see as a fortress. We are very confident and it will be more great exposure for the younger guys who learnt so much on this tour of England. We'll need to be at our best to beat the Australians but we are looking forward to the challenge. There should be some really interesting cricket coming up in the next few months. Hopefully we can kick-start our Test and one-day form back in Sri Lanka. This has been a tough tour but enjoyable and we need to learn lessons from it.
U.S. Won’t Support Nuclear Talks Until North Korea Makes Changes
North, South Korea Agree to Retry Stalled Nuclear Talks
China-Based Spies Said to Be Behind Hacking of IMF Computers
China, Asean Guidelines in Disputed Sea Shift ‘Status Quo’
China Links Fast Nuclear Reactor to Grid After 40-Year Research
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By Daniel Ten Kate and Nicole Gaouette
(Adds comments from State Department official in sixth paragraph.)
July 23 (Bloomberg) -- U.S. Secretary of State Hillary Clinton warned today that escalating tensions in the South China Sea risk disrupting trade flows and called on Asian countries to clarify territorial claims.
“The United States is concerned that recent incidents in the South China Sea threaten the peace and stability on which the remarkable progress of the Asia-Pacific region has been built,” Clinton told a regional security forum in Bali, Indonesia. “These incidents endanger the safety of life at sea, escalate tensions, undermine freedom of navigation, and pose risks to lawful unimpeded commerce.”
Clinton commended China and the 10-member Association of Southeast Asian Nations for agreeing to guidelines for joint activities in the waters last week and urged them to accelerate a legally binding code of conduct. She called on countries to “exercise self-restraint” and avoid occupying uninhabited islands in the disputed waters.
The U.S.’s alliance with the Philippines and naval power in the Asia-Pacific has led to tensions with China, which claims most of the South China Sea as its own. The Philippines and Vietnam have pushed ahead with oil and gas exploration over objections from China, which has used patrol boats to disrupt hydrocarbon survey activities in disputed waters.
‘Clarify Claims’
Clinton called on the countries “to clarify their claims in the South China Sea in terms consistent with customary international law, including as reflected in the Law of the Sea Convention,” Clinton said, according to prepared remarks that were given to reporters. “Consistent with international law, claims to maritime space in the South China Sea should be derived solely from legitimate claims to land features.”
Clinton is asking states to lay out their claims very clearly and unambiguously and to explain the legal basis for them, said a State Department official present for meetings on the South China Sea. That will force countries to look carefully at their approach, especially given that almost all claims to the waters are exaggerated, the official said, speaking on condition of anonymity.
The U.S. has not ratified the United Nations Law of the Sea Convention.
‘Nine-Dash Map’
China last week rejected an attempt by the Philippines to have the UN’s International Tribunal for the Law of the Sea decide on the territorial dispute. The Philippines plans to ask another UN arbitration panel to demarcate disputed areas of the sea “to prove our claim,” Foreign Secretary Albert F. del Rosario said on July 20.
Along with the Philippines, Vietnam and Indonesia have released statements to the UN saying China’s “nine-dash map” of the waters has no basis in international law.
China says its claims “are supported by abundant historical and legal evidence,” according to an April submission to the UN. It said the Philippines “started to invade and occupy” its islands in the 1970s.
Chinese ships cut survey cables of Vietnam Oil & Gas Group vessels twice in the past few months and in March chased away a boat working for U.K.-based Forum Energy Plc that was surveying the area. A Chinese frigate fired warning shots at Philippine trawlers on Feb. 25.
China’s actions in the waters provoked protests in Hanoi over the past month and prompted a group of Filipino lawmakers to travel last week to the disputed Spratly Islands, which are also claimed by Malaysia, Taiwan, Brunei, Vietnam and China. All those countries except Brunei have troops stationed in the area.
“We believe that it’s important to respect the sovereignty and territorial integrity of China,” Liu Weimin, spokesman for Foreign Minister Yang Jiechi, told reporters yesterday after his meeting with Clinton. “I sense that the U.S. side understands the sensitivities of these issues.”
--Editor: Ben Richardson, Jim McDonald
To contact the reporters on this story: Daniel Ten Kate in Bali at dtenkate@bloomberg.net; Nicole Gaouette in Bali at ngaouette@bloomberg.net
To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net
Boehner Says Debt Deal ‘Not Close’ Amid Internal Strife
Camp Predicts Debt Ceiling Increase, Urges Tax-Code Overhaul
Obama Spokesman Says No Deal Yet With Republicans on Budget
Capital Gains Tax Break Threatened by Bipartisan Senate Plan
Obama Open to Short-Term Debt Increase Tied to Major Deal
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By Julie Hirschfeld Davis
July 23 (Bloomberg) -- President Barack Obama, running out of time to strike a deal to raise the U.S. debt ceiling, had some bad news for House Speaker John Boehner on July 20.
The tax overhaul they had been discussing to raise $800 billion in revenue over a decade had to be bigger, Obama told Boehner and House Majority Leader Eric Cantor during an evening meeting in the Oval Office. Obama’s new offer: $1.2 trillion.
A new proposal by the “Gang of Six,” a bipartisan group of senators who were calling for $3.7 trillion in budget savings over 10 years to slash the deficit, had changed the dynamics of the accord that Obama and Boehner had been negotiating in closed-door talks for weeks, the president told the speaker.
The group, praised by both senior Republicans and Democrats for its mix of spending cuts and tax increases, proposed a bigger revenue target than Obama and Boehner were considering, according to officials on Capitol Hill and at the White House who gave their accounts of the talks on condition of anonymity.
And Obama, who had called for months for the sort of grand bargain the gang was offering, was going to have a hard time selling a deal that stopped short of that.
The turnabout ultimately led Boehner to walk out of the talks, he said last night, unraveling the progress that had been made toward a sweeping compromise to slice $3.5 trillion from the nation’s debt and raise the $14.3 trillion debt ceiling before a default threatened Aug. 2.
Back to Beginning
The breakdown sent both sides back to the beginning with little room left to reach a deal to boost the nation’s borrowing authority in time to head off the default. Congressional leaders from both parties are to meet today at the White House in an effort to reach an accord.
“It’s the president who walked away from his agreement and demanded more money at the last minute,” Boehner, of Ohio, told reporters at an evening news conference on Capitol Hill, hours after calling Obama to tell him he was abandoning their negotiations. “Dealing with the White House is like dealing with a bowl of jello.”
It was the final breakdown in the private negotiations between Obama and Boehner over a politically challenging debt- reduction agreement both were eager to reach.
“We had very intense negotiations,” Obama said last night. “I’ve been left at the altar now a couple of times.”
The courtship began June 18, when Obama, 49, invited Boehner, 61, for a round of golf at Andrews Air Force Base. The two teamed up against Vice President Joe Biden, who was spearheading bipartisan talks on the deficit with congressional leaders, and Ohio Governor John Kasich, a friend of Boehner’s.
Bonding Session
More bonding session than policy debate, the president and the speaker beat Kasich and Biden, winning $2 each. Still, the golf date proved a turning point, spurring Obama and Boehner to begin one-on-one talks on a broad compromise. Four days later, Boehner was at the White House meeting privately with Obama to sketch out what the deal could look like.
The following day, Cantor, a Virginia Republican who has cultivated a close relationship with Tea Party-backed lawmakers leading the call for spending cuts, abandoned the bipartisan Biden-led talks after a half-dozen meetings. He said Democrats’ insistence on raising taxes made an agreement impossible. The group had been making slow but steady progress, identifying more than $1 trillion in spending cuts the two parties could agree on.
The following week, Obama held a news conference in which he accused Republicans of siding with corporate-jet owners over children and the elderly in the negotiations, and compared Congress’s work ethic unfavorably with that of his pre-teen daughters.
Dire Consequences
“The yellow light is flashing,” Obama said during the June 30 news conference, warning of dire consequences if Congress didn’t raise the borrowing limit before Aug. 2. Standard & Poor’s said it would downgrade U.S. debt to junk status in the event of a default, and the Senate canceled its July 4 recess to continue talking.
The following Sunday, July 3, Boehner and Obama met secretly at the White House to continue their talks. Enough progress was made that Obama appeared at a White House briefing on July 5 to say the nation had “a unique opportunity to do something big to tackle our deficit,” and announce he was summoning congressional leaders from both parties for talks at the White House July 7.
At the roughly 90-minute meeting, Obama polled congressional leaders about what kind of deal they were seeking -- a limited one of between $2 trillion and $2.5 trillion over a decade, a medium-size agreement yielding about $3 trillion, or a big deal to cut $4 trillion off the debt.
Obama and Boehner both wanted to go big.
‘No Imminent Deal’
Still, Boehner -- cognizant of intense opposition among Republicans to any agreement that raised taxes -- cautioned that there was “no imminent deal about to happen,” saying there remained “serious disagreements.”
“We are this far apart,” Boehner told reporters, spreading his arms to indicate the gulf between himself and the president. Yet behind the scenes, his staff and Obama’s were beginning to exchange paper on the contours of a compromise to bridge that divide.
The White House was willing to consider major changes to Medicare, Medicaid and Social Security, including benefit cuts, that had previously been considered off-limits. Boehner was willing to discuss a tax overhaul that would raise revenue, until then dismissed by the Republicans as a tax increase.
Boehner’s aides, including Chief of Staff Barry Jackson and Policy Director Brett Loper, were haggling with Obama’s budget director Jack Lew and legislative liaison Rob Nabors on the details. Resistance was brewing in both parties to such a deal.
Pelosi Displeased
Meeting at the White House with Obama on July 8, House Minority Leader Nancy Pelosi of California vented her displeasure about the prospect of including Social Security and Medicare cuts in any deal, and told him such a package wouldn’t garner support among congressional Democrats.
On Capitol Hill, Boehner and other House leaders held a press conference to reiterate their opposition to tax increases. Still, negotiations continued into Saturday morning July 9, when a round of negotiating among Boehner’s and Obama’s aides yielded little progress in breaking remaining stalemates over details of the tax rewrite and entitlement cuts.
Later that day, Boehner phoned the president at Camp David to tell him he was pulling the plug on a broad deal and would seek a more limited measure.
“Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt-reduction agreement without tax hikes,” Boehner said in a statement after the call.
No Stopgap Deal
Obama was still pressing for a broad agreement. He called a news conference on July 11 in which he ruled out the idea of signing a stopgap debt-limit boost and argued that the time was ripe for a major compromise to reduce the debt, whatever the political difficulties.
“We might as well do it now -- pull off the Band-Aid, eat our peas,” he said.
That didn’t stop Republican resistance. Senate Republican Leader Mitch McConnell of Kentucky proposed a fallback plan on July 12 -- a “last choice” option, he called it -- that would allow Obama to unilaterally raise the debt ceiling $2.4 trillion in installments, requiring that the president lay out the same amount of spending cuts and giving Republicans several opportunities to vote “no.”
At the close of a White House meeting July 13, Cantor pressed Obama about a shorter-term debt measure, prompting a testy response from the usually low-key president.
More Than Reagan
Leaning back from the table, Obama told Cantor that he’d been personally negotiating the details of the debt deal for weeks -- more than Ronald Reagan or George W. Bush would have done -- because he wanted to reach a deal that was important for the country. If Republicans sent him legislation he couldn’t accept, he’d veto it and take it to the American people, Obama said before closing the meeting.
Republicans announced they would move forward the next week with legislation that would slash spending, cap future expenditures, and condition a $2.4 trillion debt-ceiling increase on passage of a balanced budget constitutional amendment. Behind the scenes, though, Boehner and Cantor began serious talks with Obama’s staff on a major compromise.
The House Republicans invited Obama’s chief of staff Bill Daley and Treasury Secretary Timothy Geithner to Boehner’s Capitol office suite on July 15 for a quiet meeting on a framework for a tax overhaul, according to House Republican leadership aides.
Cutting Medicare
Over coffee and bagels at the White House July 17, with Obama popping in periodically to check their progress, the four negotiators, now joined by Lew, moved toward a deal to slash discretionary spending by $1.2 trillion over a decade and set a process for overhauling entitlements and the tax code within six to eight months to save trillions more.
The White House would agree to cut $250 billion from Medicare and trim Social Security benefits through a change in the way their annual increase is calculated. Republicans would agree to a tax rewrite that would raise no more than $800 billion while lowering rates, a number blessed by Geithner, the Republican aides said.
The two sides remained divided over key details, including an enforcement mechanism to ensure the entitlement and tax targets were met. The White House rejected the Republicans’ idea that future borrowing authority be conditioned on achieving the goals, and Republicans opposed Obama’s insistence on raising taxes on high earners while keeping them at the same level for the middle class in the event the promised debt savings didn’t materialize, the aides said.
‘Grand Bargain’
On July 19, as Boehner’s staff awaited a counterproposal from Obama’s aides, Democratic Senator Mark Warner of Virginia and Republican Senator Saxby Chambliss of Georgia, co-leaders of the Gang of Six, stood before about 50 senators in an ornate room on the first floor of the Capitol and pitched their long- awaited “grand bargain.” Obama made a surprise appearance in the White House briefing room to commend the outline, and Treasuries rallied on expectations of a long-term debt-reduction deal.
The president’s team told Boehner’s that their bottom line had changed based on the framework, a message Obama delivered to the speaker in person the next day at the White House, the Republican aides said. An administration official said the senators’ plan had changed the political dynamics in the push for a deal, making it harder to attract Democratic support for a proposal with a smaller revenue increase.
Obama Rebuffed
Still, Obama had no inkling Boehner was abandoning the talks until he began having trouble getting the speaker on the phone and Jackson stopped returning e-mails beginning the evening of July 21. Boehner’s office informed the president on July 22 at about 3:30 p.m. that the speaker would call Obama in two hours. Obama said he wanted to talk to Boehner right then and was rebuffed, administration officials told reporters.
The call came in as scheduled, not long after House Republican leadership aides finished briefing reporters about Boehner’s decision.
“Up until sometime early today when I couldn’t get a phone call returned, my expectation was that Speaker Boehner was going to be willing to go to his caucus and ask them to do the tough thing, but the right thing. I think it has proven difficult for Speaker Boehner,” Obama said at the White House.
“In the end,” Boehner wrote in a letter to Republican lawmakers detailing his decision, “we couldn’t connect.”
--With assistance from Mike Dorning, Kate Andersen Brower and Laura Litvan. Editors: Robin Meszoly, Mark McQuillan
To contact the reporter on this story: Julie Hirschfeld Davis in Washington at Jdavis159@bloomberg.net.
To contact the editor responsible for this story: Mark Silva at msilva@bloomberg.net
