Spending stumbling block to budget deal

Senate Republicans and Democrats hit an impasse Sunday over spending in their last-ditch struggle to avoid an economy-jarring default in just four days and end a partial government shutdown that enters its third week.
Associated Press
Oct 14, 2013

After inconclusive talks between President Barack Obama and House Republicans, Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., took charge in trying to end the crises although no resolution seemed imminent.

"Americans want Congress to compromise," Reid said at the start of a rare Sunday session in the Senate in which he pressed for a long-term budget deal.

The two cagy negotiators are at loggerheads over Democratic demands to undo or change the automatic, across-the-board spending cuts to domestic and defense programs that the GOP see as crucial to reducing the nation's deficit.

McConnell insisted that a solution was readily available in the proposal from a bipartisan group of 12 senators, led by Sens. Susan Collins, R-Maine, and Joe Manchin, D-W.Va., that would re-open the government and fund it at current levels for six month while raising the debt limit through Jan. 31.

"It's time for Democrat leaders to take 'yes' for an answer," McConnell said in a statement.

The latest snag comes as 350,000 federal workers remain idle, hundreds of thousands more work without pay and an array of government services, from home loan applications to environmental inspections, were on hold on the 13th day of the shutdown.

Unnerving to world economies is the prospect of the United States defaulting on its financial obligations on Thursday if Congress fails to raise the borrowing authority above the $16.7 trillion debt limit.

Christine Lagarde, the International Monetary Fund's managing director, spoke fearfully about the disruption and uncertainty, warning of a "risk of tipping, yet again, into recession" after the fitful recovery from 2008.

The reaction of world financial markets and the Dow Jones on Monday will influence any congressional talks while politically Republicans are reeling from an initial, now abandoned, strategy to link defunding of the health care law with keeping the government operating.

"We're in a free-fall as Republicans, but Democrats are not far behind," said Sen. Lindsey Graham, R-S.C., in warning Democrats about seizing on the GOP's bruised brand as leverage to extract more concessions.

McConnell and Republicans want to continue current spending at $986.7 billion and leave untouched the new round of cuts in January, commonly known as sequester, that would reduce the amount to $967 billion. Democrats want to figure out a way to undo the reductions, plus a long-term extension of the debt limit increase and a short-term spending bill to reopen the government.

"Republicans want to do it with entitlement cuts," said Sen. Chuck Schumer, D-N.Y. "Democrats want to do it with a mix of mandatory cuts, some entitlements and revenues. And so how do you overcome that dilemma? We're not going to overcome it in the next day or two. But if we were to open up the government for a period of time that concluded before the sequester took place, which is Jan. 15, we could have a whole bunch of discussions."

Sen. Dick Durbin of Illinois, the No. 2 Democrat in the Senate, told reporters that the two sides are roughly $70 billion apart, the difference between the $1.058 trillion Senate budget amount and the $988 billion envisioned by House Budget Committee Chairman Paul Ryan, R-Wis.

"We haven't picked a number, but clearly we need to negotiate between those two," Durbin said.

Republicans dismiss the latest request as Reid moving the goalposts in negotiations as they were getting closer to resolving the stalemate that has paralyzed Washington. They also argue that it is disingenuous for Democrats to resist any changes in the 3-year-old health care law while trying to undo the 2011 budget law that put the cuts on track.

"I think the Democrats are on the verge of being one tick too cute as they see the House possibly in disarray — they now are overreaching, and I think that what we've got to do is get this back in the middle of the road, act like adults," said Sen. Bob Corker, R-Tenn.

Graham and Sen. Rand Paul, R-Ky., said they would not support any deal that upends the spending limits imposed by the 2011 law, and predicted that their Senate GOP colleagues would oppose it as well.

Plus the House and its fractious Republicans remained a possible headache in the coming week.

"I think at this point we've got to figure out a way to get something out of the Senate that we think is close enough for the House to accept," Corker said.

Out of play, for now, was the Republican-led House, where Speaker John Boehner, R-Ohio, told GOP lawmakers early Saturday that his talks with the president had ground to a halt.

Also sidelined, at least for now, was the plan forged by Collins and a bipartisan coalition to briefly fund the government and extend the $16.7 trillion debt limit, in exchange for steps like temporarily delaying the medical device tax that helps fund the health care law.

Democrats said Collins' plan curbed spending too tightly, and Reid announced Saturday it was going nowhere.

Collins said Sunday that both Democrats and Republicans continue to offer ideas and say they want to be part of the group working to reopen the government and address the debt ceiling before Thursday's deadline.

"We're going to keep working, offering our suggestions to the leadership on both sides of the aisle in an attempt to be constructive and bring this impasse to an end. Surely we owe that to the American people," Collins said.

Sen. Amy Klobuchar, D-Minn., a participant in the Collins' talks, said she sees the plan and the fact that the Senate leaders are talking as a positive going forward.

"We need that right now," she said. While Reid wouldn't accept everything in the Collins proposal, she said Reid "knows there are some positive things in that plan," such as opening the government in a "smart timeframe" not defaulting on debt and doing something in the long term on the budget.

Not far from the Capitol, Sens. Ted Cruz and Mike Lee, the two tea party Republicans who led the unsuccessful fight to tie the health care law to government spending, were part of a demonstration at the World War II Memorial where a crowd pushed through barriers to protest its closing due to the shutdown.

They were joined by 2008 vice presidential candidate Sarah Palin.

Klobuchar and Collins were on CNN's "State of the Union." Graham appeared on ABC's "This Week," Corker was interviewed on "Fox News Sunday," Schumer spoke on CBS' "Face the Nation" and Lagarde was on NBC's "Meet the Press."

Comments

Stop It

all talk...no walk...

yeswee's picture
yeswee

Start working at home with Google! Its by-far the best job Ive had. Last Wednesday I got a brand new BMW since getting a check for $6474. I began this 8-months ago and immediately was bringing home at least $77 per hour. Useful Reference http://ow.ly/pAu07
WORK LESS EARN MORE

Darwin's choice

Cruz/Palin 2016

mimi's word

Palin is a fool and makes it harder for women to be taken seriously!

Darwin's choice

Sorry,she's no fool. The media has crucified her out of pure fear!

Pterocarya frax...

Sorry, anybody that doesn't see how pathetic she is, is an even bigger fool.

The Big Dog's back

That'd be durwood.

4shizzle

durwood is a rock hard fool.

deertracker

You got that right Pter......

Darwin's choice

Here's your savior....one of your own too!

And you say Sarah Palin is a fool? The fools are right here posting above me....

http://www.youtube.com/watch?v=d...

Contango

The presidential election of 1964 wholly demonstrated that the east coast liberal political mentality of the Harvard/Yale educated Progressives and the country club Repubs have a stranglehold on this country.

It's WAY past time to get some Midwest and Western thinking in DC and kick out the Political Ruling Class.

Wanna see where the 1% lives?

"Sarah Palin says D.C. is home to 7 of 10 of the highest-income counties"

http://www.politifact.com/truth-...

The Big Dog's back

If you consider your thinking "midwest thinking" then I want no part of it.

Contango

Re: "I want no part of it."

Yours is more Far East - N. Korea way socialist putz.

tk

So, I assume you think the 1968 election was better?

Contango

Re: "1968 election"

Nope. Two of the worst presidents in my lifetime back-to-back - LBJ and Nixon.

44846GWP

LBJ, one of the worst Presidents of your lifetime? You are a bigger fool than I thought you were.

Contango

Re: "LBJ,"

And he didn't run for re-election in '68 why Zippy?

http://www.youtube.com/watch?v=v...

The Big Dog's back

Isn't Chicago considered Mid West?

Contango

Re: "Isn't Chicago considered Mid West?"

Pres. Obama - Harvard grad. 'Nuff said.

Good to see that you support the rich Ruling Political Class.

Dr. Information

People getting richer and faster under Obama than any other president in history. Thanks Obama :).

The Big Dog's back

You should be ecstatic. All those rich people "earning" their money. A right wingnut's dream.

The New World Czar

Correct again as the top 10% of the earners paying 90% of the income taxes to support free loaders. You're right again, big dog. Step two of your ultimate recovery and atonement.

4shizzle

The New World Czar says : "Correct again as the top 10% of the earners paying 90% of the income taxes ..."

Well, let's look into that statement :

"If you want a 90% figure, here it is :
The top 1 % owns 42.7% of all wealth, while the next 19% owns 48.4% of the wealth.
This means the top 20% owns 93% of the wealth pie and leaves the remaining 80% of the population to fight over the remaining 7 % of the crumbs."

.....................They should pay more taxes , they own almost all of the money.

grumpy

"They should pay more taxes , they own almost all of the money."

One slight correction... they EARNED almost all the money. Either from work, intelligent investing, or a combination of the two. They didn't spend every dime the earned, they saved and invested and let the miracle of compound interest work for them. They lived within their means and invested. Less than 25% inherited their wealth, over 75% worked and invested to get it.

Others just try to justify being takers instead of making something of their time and work for their families, something more than complain. You can't wait till you are 50 to begin to save, you start that from the beginning, not the end. The miricle of compound interest needs time to work, the longer you save the more interest you make, the more interest you make the better off you are It ain't easy or fun to start saving but it pays better than working does... after a few decades.

4shizzle

Blah blah blah - there is no " miricle of compound interest" anymore.
Interest rates are so low, that you have to have a LOT of money to get back some kind of dividend.
You come across as another wealthy , money-loving Republican.

How'd you get your wealth ? Did the government help you in ANY way?

Contango

Re: "there is no " miricle of compound interest" anymore."

Individual equities, mutual funds or ETFs like (DVY).

http://www.bloomberg.com/quote/D...

The level of financial ignorance in this country is pathetic.

4shizzle

I was speaking figuratively, not literally.
For example , bank savings and CD's pay what ?.. .06 to . 20% ?

You call that a " miricle of compound interest"

By the way , weren't all the interest rates lowered to help Big Business help the Economy ?

How's that working out ?

(Here comes the bafflegab)

"The level of financial ignorance in this country is pathetic."
...............Yes , even among the "know-it-alls".

Contango

Re: "You call that a ' miricle of compound interest'" '

And I was writing literally - it CAN be found.

For one: Reinvest the div'ds, interest and cap gains inside a mutual fund.

-------------------------

Re: "weren't all the interest rates lowered to help Big Business help the Economy,"

For the banks in order to help lending for housing, capital investment, autos, et. al.

Got a problem with ZIRP? Take it up with Pres. Obama & Fed Chair Bernanke.

grumpy

"How'd you get your wealth ?"

Worked for family ag business from 9, military 4 years from 17-21, became an apprentice in a trade union at 21, jouneyman at 25, Started buying houses and flipping them at 23, kept doing that for around 10-12 years, started another side business at 26, still do that, saved and invested some from EVERY paycheck from 9, retired at 57, earliest I could and get my pension, work part time for a business that is one of my hobbies and also invested in it, so am a part owner, around 15%. Got an engineering degree over the years cause I wanted to, never used it for work, just something I wanted. Married and paid off my wife's college loans, had kids, paid for their schools, at least what they didn't save foand pay for, or got scholarships for. Never had a balance on a credit card after 30 days, only had ONE car loan I paid off in less than a year, only got loans for real estate, never was late, I can't remember ever not paying those off way early. Only bought one new car, (and that for my wife) buy one year old off lease cars, keep a couple years, rinse and repeat. I don't pay interest on loans (except on real estate, and that is just till I flipped it, it was a business expense) I make interest on what I earn. I pay cash for what I buy (again except for real estate). I receive interest, I don't pay it out. Oh yeah I inherited $3000 when I was 15 from grandparents on my mom's side... I saved and invested it. 6 grandkids got that and my parents and uncle got the farm, paid it off sold it, and divided maybe $25 K between themselves.

Depending on how my health is, I won't take SS till I am 70. At 70 you receive 130% or 133% of what you get at 65. It is the only way you can ever get actual interest on your SS. Then it is a crap shoot on how long you live, if you live long and well you win, if not you lose. As I said I have a long time before I have to make that decision. I could do without, but I paid into it and I WILL get out as much as I can. Taking it out early if my health gets bad, or if I remain healthy as my family history shows... I will wait.

I have said this ^ in parts before.

" there is no " miricle of compound interest" anymore."

There was before obama came into office with a supermajority in the Senate and majority in the house. Before Obama interest rates rarely went below 5% for any extended period of time sine the depression. This last time I made out well in the stock market after it hit the floor and came back up. I went to cash, money markets as it dropped, I lost money for one month before I switched it over.

The miracle of compound interest takes decades, and only doesn't happen when interest rates are held unaturally ot zero or very low by printing money. That will turn when it either falls apart or they slow and stop the printing.

Just a note, that 3K I inherited, I figured that compounded to a minimum of 24K ans max of 36K. I could sit down and run the numbers from every year but I will just use the rule of thumb that it doubles every 7-10 years. That I have checked before and it runs true for good active investing... emphisis on GOOD aka luckey and mostly paying attention and learning.

" Did the government help you in ANY way?"

Yeah four years I was in the military as an enlisted man in the mid 70's. Do you think we were over paid back then?

"You come across as another wealthy , money-loving Republican."

Sorry I was raised to look to the future so I wouldn't have to be taken care of by the gov't. I was taught to look out for myself and my family so I can take care of them in the future. If you want to depend on thegood graces of others so be it.

I have donated to charites for decades, but I get to decide which ones I do. They have to get 90%= to the end user minimum, I doubt any that I have donated to get less than 95% to them.

http://www.charitynavigator.org/

In case you want to be an informed donator.

-------------------------------------------------------------------

Now will you tell us your economic life? Did the government help YOU in any way?

Do you have the balls to answer the same questions I have?

Contango

Re: "I won't take SS till I am 70,"

At 62, my spouse and I are taking the money.

"Nem de gelt" (Take the money.) - Henny Youngman

"Get it while you can." - Janis Joplin

We're not willing to take the govt.'s bet that we're gonna live a long time.

As of last Fri., our gross YTD ROI on our investment portfolio was 8.8%.

Thank you Mr. Bernanke!

IMO, as long as we stay above the rate of inflation - we're golden.

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