POLITICS

The Weekly Wrap, Special Edition
"Debt Crisis: Battle on the Hill"

Tues, Aug 2, 2011, 6:29 pm, Central

Video Uploaded: 11:19 pm, Central

Senate Passes Debt Limit Increase

Welcome to the Weekly Wrap. I’m Diane Collins.

Today, the Senate concurred with the House by a vote of 74 to 26 to accept S.365, the debt ceiling bill amendment in the form of a substitution for S.627, Harry Reid's debt ceiling plan. Confused? Well, it was sort of planned that way. Now, I hesitate to call it Reid's bill because similar to Obama, Reid simply took a Republican idea, picked what he liked and called it his. This time the idea was Minority Leader Mitch McConnell's (R-KY) "Last Option" proposed July 18th. Reid changed the name and bill number but the structure was McConnell's. In fact, the financials aren't really that different either. But, since some Republicans are saying, "we got 98% of what we wanted" it is to be assumed grace was extended to Reid. Hardly, it was "the only bill left" in the Senate. Reid had blocked or tabled everything Republicans sent him regarding the debt ceiling debate including Cut, Cap and Balance.

This newly passed debt ceiling bill "isn't pretty" regardless of to whom it is credited. In fact, there is such subterfuge that we are producing another Special Edition video series entitled, "The Grand Compromise." It will address the bill in detail and point out caveats for future negotiations. It is unfortunate that a crisis situation required passage of the bill before most knew what was in it. Sound familiar? Now I can hear some screaming in the background, "The bill was only seventy-four pages, read it!" I did. And for the rest of those who read the bill, surprise at the lack of detail and what's not in it has raised the fear of what's coming next. The video will be available those who "Like" us on Facebook. But, that's up and coming. Let's talk about what just happened to all of us as the result of the debt crisis and the battle on the Hill.

Quick review. On July 1st we published our Weekly Wrap entitled Treasury Secretary Geithner: The Boy Who Cried Wolf. The publication came out of frustration really with the tactics being employed by the Obama administration to orchestrate yet another crisis... this time in order to raise the debt ceiling. They went to far saying unless we raised the debt ceiling by $2.4T we would "default" on our debt. And using scare tactics against seniors and active duty military families putting their paychecks in doubt, was just over the top. We pushed hard to support Conservative congressmen outing the Treasury Secretary on the definition of default and the Treasury's ability to pay. Pandora's box opened, heels dug in and the battle on the Hill escalated as the administration fought to keep face. Telling the truth never seemed to be an option although the President stopped using the "default" word as did some news agencies we targeted.

Sen. Rand Paul (R-KY)

Debt Ceiling Bill, S.365

August 2, 2011

In response to the "crisis" Senate Conservatives announced their Cut, Cap and Balance Act on July 7th. Credit rating agencies, the same ones involved in the housing market crash, had threatened to down grade the United States government unless a plan was put in place that made significant spending cuts and started the country back on a path to fiscal responsibility. The senators plan did just that. The Tea Party got behind it. The Left took note and saw the bill as a restraining order demanding they cut up the government credit card. They began a PR campaign to demagogue the bill as draconian. President Obama entered. (Hey, we got him off the campaign trail.) His strategy? Divide and conquer. Meetings ensued and a false sense of camaraderie between POTUS and Speaker Boehner (R-OH) was publicized while outright rancor was purported to exist between Majority Leader, Eric Cantor (R-VA) and the Speaker. None of it true. While Boehner negotiated in good faith, the President blocked other solutions to the manufactured crisis by refusing to sign any short term legislation that would allow the Treasury to meet its obligations on August 3rd. POTUS also blocked the use of "other Treasury funds" while congressional leaders seemed to become pin balls in Obama's pin ball game that had them bouncing from solution to solution in response.

In the Senate, Majority Leader Harry Reid (D-NV) refused to put the Senate version of Cut, Cap and Balance submitted on July 7th on the calendar. On July 12th, Minority Leader Mitch McConnell introduced his "Last Option" (the foundation of the debt ceiling bill Congress passed today). The House which had been working on producing a balanced budget amendment, realized more was needed. Boehner and Cantor brought the House version of Cut, Cap and Balance, HR 2560 to the floor on July 18th. "Miraculously," the Left began working in "bipartisan" fashion with McConnell to produce "McConnell Plus." This, in a modified version, is what ended up being called the "Reid plan" when a disagreement over tranches and the release of funds increasing the debt ceiling occurred. McConnell included a third tranche which required President Obama to request another debt increase prior to the 2012 election. Reid's plan removed the third tranche placing funding of the debt ceiling past the 2012 election. McConnell stuck with his original idea. His plan never made it to the floor. Enter the House.

Sen. Kelly Ayotte (R-NH)

Debt Ceiling Bill, S.365

August 2, 2011

On July 19th the House passed HR 2560, Cut, Cap and Balance and sent it to the Senate. The Senate GOP showed overwhelming support for the bill. Reid eviscerated it and tabled the bill denying it a vote after some preliminary consideration on the floor. Reid's intention? Introduce the "Reid plan." The House took action. Boehner and Republican leadership introduced their "Two Step Plan" in an attempt to offer a compromise. True to Republican principles it did not include new taxes, raised the debt ceiling 2.4T as requested by the President and called for a balanced budget amendment to be passed in both houses and submitted to the states. Yep, based on Cut, Cap and Balance... but more like CCB lite. Internal party conflict, three iterations, multiple CBO scoring, emergency meetings of the House Rules Committee, and parliamentary procedures beyond the "pay grade" of this writer commenced. Finally, the bill passed the House and went immediately to the Senate where... you guessed it, Reid tabled the bill and proceeded to bring his own plan to the Senate floor. In the background much to the consternation of Harry Reid, President Obama and Speaker Boehner had continued to work on a larger deal with approsimately $4T in cuts, but when the Boehner plan was tabled in the House Obama felt empowered. He pushed for tax increases. Boehner walked. Back to the House. David Dreier (R-CA), Chair of the Rules Committee anticipated Reid might table Boehner's plan and introduced in the House a Reid "look alike" bill, just in case. Why? It would allow the House to vote down Reid's plan by a simple majority before the Senate took their vote.... it basically told the Senate, "Don't bother." And if Reid's bill passed with sixty votes in the Senate, a two-thirds majority would also be required in the House. I was truly impressed. Reid was furious. His ranting included accusing the Senate Republicans of a filibuster. Of course, Harry had to redefine the meaning of a "filibuster" in order to make his point. Hmmm, where did we see that before? McConnell challenged him saying, "We're ready to take a vote right now." Reid didn't have the votes and faced the House voting his bill down the next day.

Sen. Jon Kyl (R-AZ)

Debt Ceiling Bill, S.365

August 2, 2011

Saturday, July 30th many felt the political games had cost the country valuable time as Geithner's artificial [X-Date] loomed large. Actually, it was time well spent. Kind of like standing up to the bully on the playground. It was about respect and keeping your seat at the table. Had Boehner backed down, Republicans would have been irrelevant. That didn't happen. Sunday, President Obama announced a "deal had been reached" between the himself and the congressional leaders. Now they just had to sell it to their senators and representatives. The "manufactured" crisis had become a real one in many minds. What occurred at that point is something seasoned political writers had predicted. A version of "McConnell Plus"... Harry's version, became the deal agreed upon. It provides funding past the 2012 election by removing the third tranche. That had been Obama's only requirement from the start. It does not include a tax increase... at least in the first tranche, but it does have the possibility of developing revenue in the second ("shared sacrifice" and end of Bush era tax cuts). The whole "blank check idea?" That's suppose to be tempered by the "Super Committee" set up in the second tranche to produce cuts equal, dollar-for-dollar, to the increase in the debt ceiling requested by the President. If the "Super Committee" fails an automatic trigger would cause an 18% cut across discretionary and defense spending... 50/50 making unlikely bedfellows of "Hawks" and the "liberal Left." What of the balanced budget amendment? Well, that's a guaranteed vote that occurs after the release of funds in the first tranche and must take place before December 31st. But, it's just a vote.

A number of questions about the specifics of the debt ceiling bill were answered in the Senate debate prior to a vote. Especially significant answers were included in Kelly Ayotte's (R-NH) ten minute address and analysis of "cuts;" Jon Kyl's (R-AZ) explanation of the trigger threat to Defense; Joe Lieberman's (I-CT) remarks concerning the effects on Medicare and Social Security; and Orrin Hatch's (R-UT) call for reports from Treasury on its short-term cash position and FSOkx contingency plans. It is unfortunate that the analysis came amidst a manufactured crisis... we have Obama and Geithner to thank for that.

So, did Conservatives kick the can down the road? I think the better question is did we have realistic expectations? Republicans control one-half of one-third of the Federal government. The tail definitely wagged the dog. Now, it's time to focus on making sure we keep a lid on this "Super Committee" and take back the Senate and the White House in 2012. It's the only way things will really change. (All forward looking statements are not to be considered implied guarantees... ;>)

See you soon.

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POLITICS

The Weekly Wrap, Special Edition "Debt Crisis: Battle on the Hill"

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The Weekly Wrap, Special Edition
"Debt Crisis: Battle on the Hill"