Tuesday, July 26, 2011

Obama calls for compromise amid stalemate in debt talks

President Barack Obama called on the American public to pressure elected officials to work out a compromise to raise the federal debt ceiling and avoid a potentially devastating default.

A deal would allow the government to continue borrowing money to pay its debts after August 2. The challenge came during the president's seventh prime-time televised address Monday night. The president singled out House Republicans for intransigence and said the political showdown is "no way to run the greatest country on Earth."
"The American people may have voted for divided government, but they didn't vote for a dysfunctional government," Obama said. "So I'm asking you all to make your voice heard. If you want a balanced approach to reducing the deficit, let your member of Congress know. If you believe we can solve this problem through compromise, send that message."
Shortly after the president's address, problems were reported on the web pages of at least two high-profile Republicans -- House Speaker John Boehner and Rep. Michele Bachmann. An error message on Boehner's site said "The web page cannot be found," and Bachmann's website said the "Server is too busy." "There were temporary issues with sites hosted by outside vendors -- many have been resolved," a spokeswoman for House Administration Committee said.
Both websites were operating normally by early Tuesday.
The president's political speech was intended to convince an increasingly frustrated and concerned public that Obama's approach to dealing with mounting deficits is better for working class Americans and the nation as a whole.
In a televised response, Boehner argued the opposite, saying in televised remarks that excessive government spending caused the problems the nation faces and cutting that spending is the only way to solve the problem. "The sad truth is that the president wanted a blank check six months ago, and he wants a blank check today," Boehner said. "That is just not going to happen."
If Congress fails to raise the $14.3 trillion debt limit by August 2, Americans could face rising interest rates and a declining dollar, among other problems. As the cost of borrowing rises, individual mortgages, car loans and student loans could become significantly more expensive. Officials also warn that, without an increase in the debt limit, the federal government will not be able to pay all its bills next month. Obama recently indicated he could not guarantee Social Security checks would be mailed out on time.

Months of increasingly tense negotiations have failed to bring a deal that can win approve from all of the necessary players -- the Republican-led House, Democratic-led Senate and the White House. Obama has pushed for a comprehensive plan that included spending cuts, increased tax revenue and entitlement reforms, while Republicans sought to shrink government by proposing spending cuts and reforms without increased revenue.
Obama said "it's not fair" to make massive cuts to programs affecting the poor and middle class without asking for sacrifices from wealthy Americans and large corporations as well. As he has in recent weeks, the president called for "a balanced approach" that includes large spending cuts along with revenue hikes -- including a halt to Bush-era tax cuts for families earning more than $250,000 a year -- to address the nation's deficit. "The only reason this balanced approach isn't on its way to becoming law right now is because a significant number of Republicans in Congress are insisting on a cuts-only approach -- an approach that doesn't ask the wealthiest Americans or biggest corporations to contribute anything at all," Obama said. "And because nothing is asked of those at the top of the income scales, such an approach would close the deficit only with more severe cuts to programs we all care about -- cuts that place a greater burden on working families."
To Boehner, the overall long-term health of the U.S. economy is the issue, and he showed no sign of moving off his party's opposition to any kind of increase in taxes. "The president has often said we need a 'balanced' approach -- which in Washington means: we spend more . . . you pay more," Boehner said in his response. "Having run a small business, I know those tax increases will destroy jobs."
Earlier Monday, Democratic and Republican congressional leaders unveiled separate new proposals that the other side quickly rejected, demonstrating the cavernous partisan divide that exists. Both plans -- one by Senate Majority Leader Harry Reid, D-Nevada, and the other by Boehner, R-Ohio -- provide a path to raise the debt ceiling through the end of 2012, but they differ in scope and over key components involving requirements for future congressional action.
Obama endorsed Reid's plan, but acknowledged it has little chance of getting passed in the House, just as the competing Republican plan unveiled by Boehner is unlikely to get passed by the Senate.
The president pushed for the two parties to work out an acceptable deal, and called for Americans to demand that their congressional representatives put aside short-term politics to reach a compromise.

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