Fiscal Responsibility

Morning Roundup: "Rebellion" Edition

A look at the morning headlines shows Speaker Boehner is facing opposition from a significant number of conservative Republicans, who won’t vote for his short-term proposal to pay America’s bills. With less than a week until possible default, we don’t have time for the Speaker to rewrite his bill, which is destined to fail in the Senate. Instead, it’s time for Speaker Boehner and House Republicans to work with Democrats on a long-term, balanced approach to ensure we pay our nation’s bills, reduce the deficit and give certainty to the markets.

WSJ: Boehner Plan Faces Rebellion

House Speaker John Boehner, facing a rebellion among conservative Republicans and questions about the amount of spending cuts in his plan for raising the borrowing limit, abruptly postponed a vote on the measure scheduled for Wednesday.”

“The delay added further confusion less than a week before a possible government default. It was a setback for GOP leaders who had promoted Mr. Boehner's plan as the best way to raise the debt ceiling while cutting the deficit.“

“The jolt came late Tuesday, when the Congressional Budget Office said the plan, which was intended to initially cut $1.2 trillion in spending over 10 years while raising the debt limit by $900 billion, would in fact cut only $850 billion from the latest spending projections.”

“That forced Republicans to start rewriting the bill because it appeared not to meet Mr. Boehner's own requirement that any debt-limit increase be matched by spending cuts of equal or greater value.”

Conservative Republicans lining up against Mr. Boehner ranged from Rep. Jim Jordan of Ohio, the head of the Republican Study Committee, who objects to a proposal for a committee to recommend future cuts, to Sens. Rand Paul of Kentucky and Jim DeMint of South Carolina, tea-party favorites who said in a letter to their House colleagues that his plan doesn't cut enough.”

“Mr. Boehner could address the CBO findings by changing his plan to raise the debt ceiling initially by $850 billion or by finding additional spending cuts. But neither adjustment would seemingly overcome conservatives' objections to other elements in his plan, such as the committee's unspecified cuts or the lack of a requirement to approve a balanced-budget amendment.”

As the bickering continued and the threat of a downgrade from rating firms reverberated, the dollar fell broadly, dropping to a new 2011 low against the yen and a record low against the Swiss franc. Gold rose to a new record and the Dow Jones Industrial Average dropped 0.7%. In Asia, markets opened lower on Wednesday morning, with the Nikkei average down 0.7%.”

NY Times: Vote on Boehner Plan Delayed Amid Opposition

House Republican leaders were forced on Tuesday night to delay a vote scheduled on their plan to raise the nation’s debt ceiling, as conservative lawmakers expressed skepticism and Congressional budget officials said the plan did not deliver the promised savings.”

“The pushback on the bill was the latest chaotic twist in the fiscal fracas on Capitol Hill, as the clock ticked closer to Aug. 2, when the Obama administration has warned that the nation risks defaulting on its bills. The scramble to come up with a plan that could be put to a vote, now moved from Wednesday to Thursday, represents a test of Speaker John A. Boehner’s ability to lead his restive caucus.”

“The plan was met with skepticism — and in many cases outright rejection — by several conservative House members who said its savings did not go far enough. President Obama and most Congressional Democrats also have rejected the proposal, saying it is only a short-term solution and could lead to market uncertainty and instability.”

“Mr. Boehner was forced to quickly retreat from the bill. Republican leaders said they would probably rework it to in a way that would reflect the decreased savings by raising the debt limit by less than $850 billion. Such a change would mean that the Obama administration would need to make another request for an increase in a matter of months, making the deal even less palatable to Democrats.”

“Almost as soon as Mr. Boehner introduced his plan, Republican party leaders faced a barrage of criticism that the cuts were not nearly deep enough.”

Four Republican senators with Tea Party links wrote a letter to their House colleagues on Tuesday urging them to vote against the measure. The Club for Growth, which scores members on their fiscally conservative votes, came out against the plan, as did other conservative groups including the Heritage Foundation and a coalition of Tea Party groups around the country.”

“Some House members said they had already concluded that the bill was flawed.”

Politico: Markets slip after Boehner delay

With House Speaker John Boehner delaying a vote on his bill to raise the debt ceiling, stock markets around the world moved into negative territory on Wednesday and the Dow Jones Industrial Average appears poised to open flat.”

“Investors are worried that time is running out for congressional leaders and President Barack Obama to reach an agreement that will allow the country to keep paying its bills as the August 2 deadline is less than a week away.”

Treasuries fell early Wednesday after Boehner’s plan began losing traction on Capitol Hill and now won’t be brought to a vote until Thursday at the earliest, following gains Tuesday amid hopes that a deal was in sight.”

CNN: House delays vote on Boehner plan

“House Republicans have delayed a vote on Speaker John Boehner's proposal to raise the debt ceiling after the nonpartisan Congressional Budget Office said the plan would not cut as much spending as advertised.”

“The Congressional Budget Office said Boehner's proposal would cut spending by $850 billion rather than the $1.2 trillion its proponents claimed it would save. Boehner, R-Ohio, says he will revise the plan, which faces opposition from a smattering of conservatives and nearly all the Democrats in Congress and President Barack Obama, who has threatened to veto it.”

Fox News: Boehner Rewriting Debt Plan, Vote Delayed Until Thursday

“With just a week to go until the Treasury says the federal government will run out of money to pay all of its bills, House Republicans are scrambling to rewrite a deficit-reduction bill pushed by Speaker John Boehner that failed to garner any significant support in either political party.”

“The rewrite came one day before the House was set to vote on the legislation, which sought to cut $1.2 trillion in spending over the next decade. But the nonpartisan Congressional Budget Office said Tuesday that the package would cut less than $1 trillion.”

“House conservatives refused to throw their support behind Boehner's bill, and a source told Fox News that there were no House Democrats who would vote for it. House Republican leaders were very worried about putting the bill on the floor Wednesday and seeing it fail or being forced to yank it while the stock markets were open, possibly triggering a repeat of the steep market drop after the first Wall Street bailout vote failed in 2008, the source said.”