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post #1 of 17 (permalink) Old 07-13-2011, 04:23 AM Thread Starter
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McConnell (Republican) proposes giving Obama debt ceiling power

McConnell proposes giving Obama debt ceiling power - politics - Capitol Hill - msnbc.com

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WASHINGTON The top Republican in the Senate proposed on Tuesday giving President Barack Obama sweeping new power to, in effect, unilaterally increase the nation's debt limit to avoid a first-ever default on U.S. obligations.

The new mechanism would take the place of the current White House debt negotiations among congressional leaders and Obama. Those talks over spending cuts and tax increases have grown increasingly acrimonious.

Minority Leader Mitch McConnell, R-Ky., offered a new plan to allow the president to demand up to $2.4 trillion in new borrowing authority by the summer of next year in three separate submissions.

Those increases in the so-called debt limit would automatically take effect unless both the Republican-controlled House and the Democratic Senate enact legislation specifically disapproving it.

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post #2 of 17 (permalink) Old 07-13-2011, 12:19 PM
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Re: McConnell (Republican) proposes giving Obama debt ceiling power

Fukk that.

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post #3 of 17 (permalink) Old 07-13-2011, 12:35 PM
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Re: McConnell (Republican) proposes giving Obama debt ceiling power

When I read that last night, I got downright pissed. What is that man thinking that will do? So you are just gonna cave in, and let the pres take all the blame, while you could have prevented it and fix it instead of going down this same road later on? Then who are you gonna pass this on. This fool needs to be booted out of office (McConnell that is along with the Pres.).
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post #4 of 17 (permalink) Old 07-13-2011, 01:46 PM
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Re: McConnell (Republican) proposes giving Obama debt ceiling power

McConnell is simply playing politics.

He thinks by setting up procedures whereby it doesn't take any Republican votes to pass a bill, he can insulate the Repub's from any criticism of raising the debt limit.

He's smart enough to know that should the Repub's block the passage of raising the debt limit, that the negative fallout to our (and the world's) economy....... will be laid right at the feet of the Repub's in the next election.

He's simply trying to avoid having the Repub's cutting off their noses...to spite their faces.

Although not passing the raising of the debt ceiling without budget cuts sounds great in theory, most economists agree that it would be catastrophic to a struggling recovery and devastating to our credit rating around the world.

Does anyone really think that is a game of chicken worth playing?

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post #5 of 17 (permalink) Old 07-13-2011, 01:49 PM
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Re: McConnell (Republican) proposes giving Obama debt ceiling power

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Originally Posted by AK Gandy View Post
McConnell is simply playing politics.

He thinks by setting up procedures whereby it doesn't take any Republican votes to pass a bill, he can insulate the Repub's from any criticism of raising the debt limit.

He's smart enough to know that should the Repub's block the passage of raising the debt limit, that the negative fallout to our (and the world's) economy....... will be laid right at the feet of the Repub's in the next election.

He's simply trying to avoid having the Repub's cutting off their noses...to spite their faces.

Although not passing the raising of the debt ceiling without budget cuts sounds great in theory, most economists agree that it would be catastrophic to a struggling recovery and devastating to our credit rating around the world.

Does anyone really think that is a game of chicken worth playing?

.
If Obama is such a big supporter of raising, then why doesn't he take the deal and claim credit for doing "the right thing"?

Also, we don't need to raise the debt ceiling in the guise of "defaulting" on our debts. We can pay the interest on the debt monthly and not default.

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post #6 of 17 (permalink) Old 07-13-2011, 02:01 PM
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Re: McConnell (Republican) proposes giving Obama debt ceiling power

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Originally Posted by Cuzmail View Post
If Obama is such a big supporter of raising, then why doesn't he take the deal and claim credit for doing "the right thing"?
He probably will.

I think he cares more about the people in this country, than playing a game of chicken with people's SS and military paychecks.



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Originally Posted by Cuzmail View Post
Also, we don't need to raise the debt ceiling in the guise of "defaulting" on our debts. We can pay the interest on the debt monthly and not default.

Shawn
So you're for covering the interest payments and holding off on pay checks for Social Security, military, retirees and all the other government bills?

Just to make a point?

Really?

Click Here

Quote:
President Obama has put the country on notice that he can't guarantee Social Security and other government checks will go out if the debt ceiling isn't raised by Aug. 2.

So it's worth reviewing just what the fallout could be if lawmakers fail to act on time -- either in early August or sooner if markets start to lose confidence that Congress will get its act together.

Nearly half of all government checks won't go out: The Treasury Department would be unable to pay between 40% and 45% of the 80 million payments it needs to make every month, according to an analysis by the Bipartisan Policy Center.

Why? It's basic math: The United States doesn't bring in enough revenue to pay all its bills -- with monthly deficits averaging $125 billion.

And if the debt ceiling isn't raised, Treasury won't be allowed to borrow new money to make up for the gap between revenue and spending.

Bottom line: Roughly $125 billion of bills on average may have to be put off.

Millions won't be paid: Just whose payments will be delayed is the question. And the answer won't come easy because any choice will hobble parts of the economy and anger large groups of Americans.

Take Aug. 3 as an example. Treasury is due to send out checks to 29 million Social Security recipients. Of course, they may be paid but only if others are not.

The Bipartisan Policy Center report estimates that Treasury Secretary Tim Geithner could choose to exhaust all the tax revenue the government receives in August on just a few items: interest on the debt; Medicare, Medicaid and Social Security; unemployment insurance; and defense contractors.

Debt ceiling: What you need to know

Who is left out? It's a long list. Everyone from active-duty soldiers, veterans, taxpayers due refunds and federal workers -- to name just a few of the many who depend on government checks.

"The choices would not be pretty," said Jay Powell, coauthor of the Bipartisan Policy Center analysis and a former Treasury official under President George W. Bush.

A taste of things to come: Shortly after hearing that Obama told CBS News he can't guarantee that government benefits, including Social Security, could be paid, the AARP fired off a statement saying it would "irresponsible and immoral" to not pay Social Security beneficiaries.

Markets may go haywire: Investors continue to assume that Congress will do the right thing and raise the ceiling by Aug. 2.

If Congress dashes those expectations, no one can know exactly how the markets will react. But most think they will react, and not well.

Some bond experts expect that contrary to popular belief, Treasury rates won't rise but stocks may tank. In other words, there will be a move out of risk-based assets and a flight to safety in bonds. So interest rates may stay low, but Americans' investments may get whacked.

Or, Treasury yields could become volatile and start to climb as investors smell political instability in Washington. That would push the cost of U.S. debt higher. And it could cause rates on consumer loans -- like mortgages and car loans -- to climb higher as well.

U.S. reputation would be damaged: Even if bond investors continue to be paid, investors and credit rating agencies won't take it lightly when Treasury has to delay payments to others.

Such delayed payments -- and the public anger that would result -- could cause investors to worry that even if they're getting paid today, tomorrow may be another story. And they could trade on that concern, even if it's unfounded. That, in turn, could cause interest rates to rise.

Fitch Ratings Agency said it would put the country on "Ratings Watch Negative" in such a scenario.

"Extensive payment arrears to suppliers of goods and services to the government ... would damage perceptions of U.S. sovereign creditworthiness and signal growing financial distress," the agency said in a recent report.

The S&P already has already downgraded its credit outlook on the United States to "negative" from "stable." And Moody's is considering doing the same.

Risk of default increases: This is the very worst and still least likely of outcomes, because most believe that there's no way the U.S. government would not pay its bondholders.

How Congress wrecked the budget

But if they don't raise the ceiling, lawmakers would raise the chance that those bondholders don't get paid over time. That could happen if the Treasury a) is somehow not able to prioritize payments to bondholders; or b) has to pay out more to bondholders than it has coming in on any given day.

In that case, the United States would lose its triple-A rating. That, in turn, could unhinge the global economic system, said influential bond investor Mohamed El-Erian has said.

The U.S. triple-A rating holds together many parts of the global system El-Erian told CNNMoney's Poppy Harlow. "We simply do not know how the global system will operate without the triple A. We'll see a lot of realignments that can be very costly. We'll be in the land of the unpredictable."
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post #7 of 17 (permalink) Old 07-13-2011, 02:35 PM
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Re: McConnell (Republican) proposes giving Obama debt ceiling power

That is a crap post Gandy and you know it. You put it out there to evoke an emotional response only. That comes from the same line as the infamous: Have you stopped beating your wife?

I hope Obama takes the offer too. He can own it and use that in his campaign efforts.

I believe that we can pay expenses and service the debt with existing income.
Where did I say anyting about senior, military, or retirees having their benefits cut or reduced?

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post #8 of 17 (permalink) Old 07-13-2011, 02:47 PM
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Re: McConnell (Republican) proposes giving Obama debt ceiling power

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Originally Posted by Cuzmail View Post
That is a crap post Gandy and you know it. You put it out there to evoke an emotional response only. That comes from the same line as the infamous: Have you stopped beating your wife?
Sorry if you don't like the truth.

Read the article, there is only so much money to go around.

So tell me which checks you would pay and which ones you wouldn't.

There's not enough for all of them.



Quote:
I hope Obama takes the offer too. He can own it and use that in his campaign efforts.
So you're just playing politics too, at the expense of all those people who depend on the government paying them.

You do realize that goes for contractors/subcontractors and all of those companies that provide material and services, for those that do government work directly...........right?

You want to screw them also........to make a point?



Quote:
I believe that we can pay expenses and service the debt with existing income.
Gee, you need to head to Washington right away then.

Obviously you're a lot smarter than everyone else that says it's not possible.



Quote:
Where did I say anyting about senior, military, or retirees having their benefits cut or reduced?
You didn't, but you said you would pay the interest on the debt first.

Since there's not enough money to go around, what did you expect would happen to the rest of the government bills?

As an example only, let's say your monthly mortgage is $1,000, your truck payment is $500 and you're only taking in $1,000 a month.

If you make the statement that you will pay the mortgage, then the only conclusion possible is that you aren't going to pay the truck loan.

As the article said.......... "It's basic math."


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post #9 of 17 (permalink) Old 07-13-2011, 02:48 PM Thread Starter
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Re: McConnell (Republican) proposes giving Obama debt ceiling power

Why is the first thing that gets screamed about is SS?

SS has plenty of money coming in each month to pay those that payed into the system, cut the other programs it supports out.

Military - well load 'em up and bring 'em home. That is what Obama promised anyway.

The Fed needs significant cuts anywhere and everywhere. Stuff like this has been going on at State levels for several years and we don't see states completely closing up.

GA for instance has been spreading doom and gloom over revenue for the past 3 years yet we continue with no real problem and continue wasting money on loosing ventures like public golf courses.

Priorities....

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post #10 of 17 (permalink) Old 07-13-2011, 03:02 PM
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Re: McConnell (Republican) proposes giving Obama debt ceiling power

Because when you have no valid points you spark emotion and throw the deal into someone else's lap. I expected more.

I am sure that with the explosion gov spending lately, that the difference between our monthly income and expenses could be addressed. Why is this not a topic of legitimate discussion? We have a spending problem and not an income or borrowing problem.

and by the way I would start with union contracts and new/recently established entitlement programs.

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