McConnell Offers 3-Stage ’Last Choice’ Debt Option

[Trajan]

time for a recap...how did we get here, July 12th?

October 1st 2010- democrats do not approve a budget for 2011.

Nov. 2010- democrats lose house.

Noc. 2010- Obama cuts deal for an extension of the bush tax cuts, 2% payroll reduction for 2 years.

Jan. 2011 state of union. Wapo, NY Times remark that Obama has not addressed the deficit and has kick the can down the road proposing a 3.7 Trillion budget.

Feb thru April 2011- debates between dems and reps. – crafting a budget for the rest of the 2011 year, because there was no budget ( see above) and the gov. was being funded by ongoing resolutions, final agreement – 38.5 billion ( on an approx. 3.3 trillion budget) Harry Reid declared the deal "historic."

-June debt ceiling discussions start. Deadline – August 2. (adjusted). Obama calls for what would be an effective repeal of bush tax cuts as part of the debt. ceiling deal.

** Points;

- There is no budget submitted by the WH for 2012 as required ( budget due for approval by Oct. 1 2011).
- There is no Medicare fund adjustment submittal due by law from the WH.
- Reps apparently want a restructure of Medicare funding and budget cuts, are seen as holding the nation hostage because they will not agree to tax increases in the debt ceiling deal, even though obamacare has baked in numerous increases on those very “wealthy” whom the dems want to increase taxs on, again.
- Year 2011 budget cuts on paper and signed off- 38.5 billion.

 

[Intense]

McConnell Offers 3-Stage





I would hope everyone can see through McConnell's plan and see his true intentions are just to play politics in order to make sure his plan of Obama being a one term President comes true. Despicable and irresponsible.

So he is playing politics like Obama did this morning when he said seniors may not get their checks?

I dont see the thread you made about that partisan play anywhere on the forum what gives? Maybe it is you that is playing partisan politics?

Seniors might not get their checks. That's the risk you are taking.

Raise the debt ceiling and this all goes away.

How does it all go away??? By Magic??? Cool.

U.S. National Debt Clock : Real Time

 

[Trajan]

naaaah, first the checks will go out, they are on automatic pilot.

second the banks will cash them.

IF the feds don't provide recompense right away, they will carry them. It would be sheer stupidity not to, they would have plenty to lose and nothing to gain from either dems or reps. if they refused to honor them.

Maybe. I don't know.

What I do know is that someone is going to get stiffed, either creditors, doctors, soldiers or granny. One, or more, of those, is not going to be happy if this drags on.

But still, I can't believe the politicians would be that fucking stupid to try it.

no one is going to get 'stiffed', the checks are backed by the full faith and credit of the United states of America. I cannot believe Drunkenmiller has more faith in that you do Toro, shame on you......

when aug 2 rolls by if there is no deal the checks will go out, the banks will cash them, IF it gets to that point someone is gonna cave by the 8th.

 

[Sactowndog]

http://www.usmessageboard.com/general-discussion/174997-i-for-one-am-mad-as-hell-now.html

At whom although I suspect who...

 

[Sactowndog]

Obama offered 4 trillion in cuts, which is more than the GOP is offering up and he alienated his own party by offering up entitlement cuts. Maybe it was a bluff but still the GOP won't budge to call his bluff.
I can see Obama as a one-termer but I also see the GOP losing their majority in the House too. People are not going to put up with this gamesmanship come November, 2012. If the debt ceiling isn't raised and the business world experiences what they predict they will experience, the GOP could lose their biggest allies.
All of this just because of narrow-minded partisanship by both parties and party over country. Egads,, what a bunch of losers!

You think? I think the Repubs keep the house the Obama keeps the Presidency because both parties have so extreme neither side can be trusted.

 

[Intense]

Nope. Though they are effectively doing their best to avoid voting anyway with this proposal.

All you're trying to do though is deflect because you do not have a good argument to refute what I said.

As long as there are still checks in the check book we can spend as much as we feel like, right? The balance does not really matter???
If we run out of checks, we can just print up more? That is what you are arguing. If a Business spent that way, or you and I, we would soon be in Federal Prison.

Why should the Government be allowed to do what is a crime for the rest of us???

You seem to demonize any attempt to correct course, which seems silly considering that the proposals at best reduce the rate of Government Growth, and do little or nothing to pay off Interest or Principle. It seems more every effort does more to compound the problem and lead us closer to destruction, almost deliberate, the way I see it. What is the offense??? Liberty, Independence, Choice, Private Property, Individual Conscience, Witness and Voice, For which of these do you want to bring us all down with you?

Not really. Businesses usually have an established line of credit. Individuals have credit limits and if their credit is good, can always ask that it be raised. The government operates under the same concept. The difference is that the US has basically unlimited credit because we are still considered on a global level the best investment. Does it need to be brought under control? I don't think anyone disputes that. How to get there is the debate.

Still it is based on your ability to produce or provide service, you are valued of your ability to pay back within a set amount of time. That is nowhere the case with Government Spending. There is no plan to reverse course, yet the number of Government Employees Multiplies, along with Benefit Packages, Raises, and Retirement Schemes. Sorry Charlie, no body is watching or accountable for this nightmare. You are creating a society of Serfs to pamper and Serve the New Middle Class, who is carrying a Government ID. No thanks. Talk to me when the debt clock reverses course.

 

[Sactowndog]

"The shutdown refers to discretionary spending, and Social Security is mandatory spending. It doesn't need an appropriations bill to go forward," Reischauer said.

And because Social Security benefits -- which go to roughly 60 million Americans -- are paid out of the trust fund, the agency has the implied legal authority to keep paying staffers who administer them.

That's exactly what happened in 1995-1996. While some Social Security Administration employees were sent home, the agency's official written history notes that essential staff stayed on to make sure benefits were paid.

So explain this.... since discretionary spending doesn't make up enough to cover the amount needed to be cut what has legal precedence Mandatory spending that doesn't have to be allocated or the debt limit ceiling. They can't both be maintained.

 

[Toro]

naaaah, first the checks will go out, they are on automatic pilot.

second the banks will cash them.

IF the feds don't provide recompense right away, they will carry them. It would be sheer stupidity not to, they would have plenty to lose and nothing to gain from either dems or reps. if they refused to honor them.

Maybe. I don't know.

What I do know is that someone is going to get stiffed, either creditors, doctors, soldiers or granny. One, or more, of those, is not going to be happy if this drags on.

But still, I can't believe the politicians would be that fucking stupid to try it.

no one is going to get 'stiffed', the checks are backed by the full faith and credit of the United states of America. I cannot believe Drunkenmiller has more faith in that you do Toro, shame on you......

when aug 2 rolls by if there is no deal the checks will go out, the banks will cash them, IF it gets to that point someone is gonna cave by the 8th.

Most hedge fund managers are on the other side of Drunkenmiller, at least the ones I talk to. Drunkenmiller makes the assumption that if we default, we will hammer out a deal that will cut spending dramatically. Maybe. But what if he's wrong? What if there is no deal? What if it drags on for weeks? I will tell you this - absolutely everyone I talk to does not believe we will default. No one. That's where the market is at right now.

My own guess - and its just a guess - is that nothing happens when we pass the debt ceiling for the first few days as the market believes that the two sides come to a deal. If they do, great. Crisis avoided. But at some point after - maybe five days, maybe 10 days, I don't know - the market suddenly falls off a cliff. Listening to the rhetoric, I am beginning to think people will only deal if they are scared of the consequences. I don't think people are scared of the consequences. Just listen to all the denial here, especially on the right, that this is all just scare-mongering.

 

[Avorysuds]

Obama offered 4 trillion in cuts, which is more than the GOP is offering up and he alienated his own party by offering up entitlement cuts. Maybe it was a bluff but still the GOP won't budge to call his bluff.
I can see Obama as a one-termer but I also see the GOP losing their majority in the House too. People are not going to put up with this gamesmanship come November, 2012. If the debt ceiling isn't raised and the business world experiences what they predict they will experience, the GOP could lose their biggest allies.
All of this just because of narrow-minded partisanship by both parties and party over country. Egads,, what a bunch of losers!

Over 10 years while he adds 20 Trillionish to the deficit... Awwwweeesooome.

 

[Modbert]

My own guess - and its just a guess - is that nothing happens when we pass the debt ceiling for the first few days as the market believes that the two sides come to a deal. If they do, great. Crisis avoided. But at some point after - maybe five days, maybe 10 days, I don't know - the market suddenly falls off a cliff. Listening to the rhetoric, I am beginning to think people will only deal if they are scared of the consequences. I don't think people are scared of the consequences. Just listen to all the denial here, especially on the right, that this is all just scare-mongering.

So pretty much TARP II but on a larger scale?

The last bit of your post reminds me of what I was just saying a bit earlier.

The people who are against raising the debt ceiling either don't realize that or don't care. And the scary thing is the ones who don't care are growing in number it seems.

 

[Toro]

My own guess - and its just a guess - is that nothing happens when we pass the debt ceiling for the first few days as the market believes that the two sides come to a deal. If they do, great. Crisis avoided. But at some point after - maybe five days, maybe 10 days, I don't know - the market suddenly falls off a cliff. Listening to the rhetoric, I am beginning to think people will only deal if they are scared of the consequences. I don't think people are scared of the consequences. Just listen to all the denial here, especially on the right, that this is all just scare-mongering.

So pretty much TARP II but on a larger scale?

The last bit of your post reminds me of what I was just saying a bit earlier.

The people who are against raising the debt ceiling either don't realize that or don't care. And the scary thing is the ones who don't care are growing in number it seems.

No. I think they cut some minor spending deal and they lift the debt ceiling. The issue will be played out in the 2012 election.

 

[Modbert]

No. I think they cut some minor spending deal and they lift the debt ceiling. The issue will be played out in the 2012 election.

And what do you see happening there?

And to clarify, what I meant by TARP II on a larger scale is the stock market going down big one day.

 

[DontBeStupid]

no one is going to get 'stiffed', the checks are backed by the full faith and credit of the United states of America ...

when aug 2 rolls by if there is no deal the checks will go out, the banks will cash them, IF it gets to that point someone is gonna cave by the 8th.

But, clearly not all the checks will go out. So who doesn't get a check? Whoever it is, that's where the problem starts. The Government has entered in to contracts to pay people and vendors and creditors. I know you don't believe it, but whoever doesn't get paid is going to be pissed and that will hurt our rating. It will. There is no way it can't.

So I guess the questions is, why do you want the U.S. paying higher interest?

 

[Sallow]

No. I think they cut some minor spending deal and they lift the debt ceiling. The issue will be played out in the 2012 election.

And what do you see happening there?

Republican capitulation.

Cynical. But they folded.

And it sucks.

They really had an opportunity to do something meaningful. They folded.

And by meaningful..I mean paygo.

 

[Remodeling Maidiac]

McConnell Offers 3-Stage

Senate Republican Leader Mitch McConnell proposed a “last choice option” to avoid a default on U.S. debt obligations that effectively would grant President Barack Obama power to unilaterally raise the debt limit in installments.

McConnell’s plan would let the president raise the limit in three stages unless Congress disapproves by a two-thirds majority, while Obama would also be required to propose offsetting spending cuts. The spending reductions would be advisory, and the debt-ceiling increase would occur regardless of whether lawmakers enact the cuts, McConnell said.

Don Stewart, a spokesman for McConnell, said the plan would allow Obama to raise the debt limit while putting the onus on him and congressional Democrats to cut spending.

At the same time, Republicans wouldn’t have to agree to tax increases. The proposal would force Democrats to cast multiple votes to raise the debt ceiling before the next election, while giving Republicans the chance to vote against it without risking a default.

I would hope everyone can see through McConnell's plan and see his true intentions are just to play politics in order to make sure his plan of Obama being a one term President comes true. Despicable and irresponsible.

Ok Q-bert I read your link. Let me highlight the first paragraph:

Senate Republican Leader Mitch McConnell proposed a “last choice option” to avoid a default on U.S. debt obligations that effectively would grant President Barack Obama power to unilaterally raise the nation’s debt limit in installments.


Isnt that the very thing Obama floated, as well as half of you on this board discussing him doing not more than a week ago? I dont get the rub, other than your upset that the republicans were smart enough to craft the idea in a way that give them political cover? The very thing the democrats would do were the rolls reversed.

The way I see it is:

Obama is insisting on tax increases despit the fact that he has them built into the healthcare bill already to the tune of 770 billion.

Republicans are insisting no new taxes as they feel they we told by voters in November to REDUCE spending.

Were clearly at an impasse

Mc offers a way out to avoid a debt crisis because the democrats weren't smart enough to do it themselves.



If the democrats had crafted a plan like this to give themselves political cover you would be slapping your knee and laughing at the dismay of the republicans.
Your pretentious moral reaction is completely transparent.

AND IM STILL PISSED

 

[Dot Com]

I notice that McConnell said that after each allotment, they will draft a Resolution of Disapproval. Has'nt that all they've been doing since taking office? Having "show-votes" which don't amount to anything.

 

[Trajan]

Maybe. I don't know.

What I do know is that someone is going to get stiffed, either creditors, doctors, soldiers or granny. One, or more, of those, is not going to be happy if this drags on.

But still, I can't believe the politicians would be that fucking stupid to try it.

no one is going to get 'stiffed', the checks are backed by the full faith and credit of the United states of America. I cannot believe Drunkenmiller has more faith in that you do Toro, shame on you......

when aug 2 rolls by if there is no deal the checks will go out, the banks will cash them, IF it gets to that point someone is gonna cave by the 8th.

Most hedge fund managers are on the other side of Drunkenmiller, at least the ones I talk to. Drunkenmiller makes the assumption that if we default, we will hammer out a deal that will cut spending dramatically. Maybe. But what if he's wrong? What if there is no deal? What if it drags on for weeks? I will tell you this - absolutely everyone I talk to does not believe we will default. No one. That's where the market is at right now.

My own guess - and its just a guess - is that nothing happens when we pass the debt ceiling for the first few days as the market believes that the two sides come to a deal. If they do, great. Crisis avoided. But at some point after - maybe five days, maybe 10 days, I don't know - the market suddenly falls off a cliff. Listening to the rhetoric, I am beginning to think people will only deal if they are scared of the consequences. I don't think people are scared of the consequences. Just listen to all the denial here, especially on the right, that this is all just scare-mongering.

Let me ask you a question T, as Drunkenmiller sees it, I see it to wit; where does this end, that’s where he is coming from, he obviously thinks that a Deal includes the cuts and re-working the liabilities etc. its the end game not just the debt ceiling…and inho, he is exactly right.

This is not really about TODAY or Aug. 3rd, its about a great deal more than that……there is a moral hazard here, this isn't the 90's or at any point here to fore, we are at a tipping point, if we just roll along now, no point in the future will they or anyone be able to make a case for same….. the rap will always be hey you cannot even think of letting grandpa go without his check…...


If the debt ceiling is funded minus a deal for re-structure and cuts, what happens in oh, say 2016 when Medicare especially, forget the what 25-28% gdp spending for a minute, is backing us into a corner that we will not be able to pull back from? What will the “bond markets” say then? What will grandpa say then?

I posted a simple timeline last page, this could have been hammered out months earlier, we are up against this deadline cheek to cheek because they PLANNED along to put the reps in this position, you know it, I know it, and for what?

Because they will NOT stop spending, what? 38.5 billion on a budget of 3.3 trillion? Seriously? And the reps are the bad guys here?

If they cave, what happens when we blow though this 2 T? what 18 months 2 years…lets say obama is reelected and even if there is a rep senate too…so what? We will be RIGHT BACK HERE BUT with all of the costs of those cuts and restructuring that should have taken place now, by the wayside and part of the debt..There will not be a case to be made, the reps will have caved once and they will be expected and blamed if they don’t cave again and they will have even less 'authority'..….

If the reps cave obama owns them, period, full stop.

And we will just slide on down and when obama leaves office and the fit hits the shan, it will be not Obamas fault, nope, but bush and/or whomever the poor slob that gets stuck as pres in 16 is…..and were will we be?

 

[Trajan]

I notice that McConnell said that after each allotment, they will draft a resolution of disapproval. Has'nt that all they've been doing since taking office? Having "show-votes" which don't amount to anything.

the are in the minority...hello.....

 

[Trajan]

No. I think they cut some minor spending deal and they lift the debt ceiling. The issue will be played out in the 2012 election.

And what do you see happening there?

Republican capitulation.

Cynical. But they folded.

And it sucks.

They really had an opportunity to do something meaningful. They folded.

And by meaningful..I mean paygo.

 

[Quantum Windbag]

Better hope the checks don't bounce due to lack of money.

from the link-

At the time, Clinton's lawyers pointed out that Social Security checks could be mailed during a shutdown, because the program doesn't need Congress to authorize funds for it each year. Instead, Social Security benefits are paid from the program's trust fund.

There are no marketable assets to sell in the trust fund. They can't raise cash.

Cash flows are lumpy.

on Aug. 3, we project that the government will have about $12 billion in receipts and $32 billion in committed payments, including a $23 billion Social Security payment.

Opinion: Real implications of debt debate - Jerome H. Powell - POLITICO.com

Not enough money for when that day arrives.

Will there be enough for when the seniors cash the checks? I don't know. Nobody does.

The United States receives almost $175 billion every single month. For some reason I do not see them having a problem covering a few checks for $23 billion.