"THE WEEKLY WRAP" with Diane W. Collins

The Debt Crisis: Republicans Work While Obama, Treasury, Dems & Liberal Media Demagogue

Friday, July 15, 2011,Central

Archive: Publications, Weekly Wrap


Washington's Spending & Debt Problem

Solution: Cut, Cap, and Balance!


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


"The Weekly Wrap" will extend its coverage through Sunday once again.

In a press conference today President Obama told reporters he will continue his meetings on the debt crisis with congressional leaders asking them to submit their plans within 24 - 36 hours. Submit their plans? This is beginning to be a joke. The only ones submitting anything are the Republicans.


Obama keeps telling the American people he has a plan. Where is it? We hear sound "bytes" but the President has yet to present the leaders or the American people with anything in writing. Obama and the administration continue to use Republicans to analyze and produce solutions. Then Obama takes those solutions and along with his administration appropriates what he likes as "his" enlisting the liberal media to demagogue Republicans on anything the President doesn't want to claim.


Obama doesn't have a plan. It is the Republicans who have been doing all the work. Don't believe me?...


This week we began our coverage after the July 4th holiday with Monday's article "Debt Crisis: President Obama Addresses Nation After Sunday Debt Talks Produce No Results." The article cited the breakdown of the "$4T larger deal" talks between President Obama and Speaker Boehner. Why the breakdown? The Obama requirement for tax increases in order to move the deal forward. The push turned to a smaller deal, $2-2.4T. Senate Republicans had already introduced the Cut, Cap, and Balance Act of 2011, S.1340 on July 7th. Many Conservatives see it as the solution. The bill increases the debt ceiling $2.4T conditioned upon the occurrence of three significant events. The events include immediate cuts; statutory caps; and a balanced budget amendment passed by congress and submitted to the states for ratification. I mentioned it on Monday along with our belief the House would put forth their own legislation this week should the debt talks break down. They did and a balanced budget amendment will be introduced on the House floor July 18th. Obama tried to continue his tie to Speaker Boehner on his $4T deal during Monday's address. However, Boehner had realized promises to cut spending aren't enough. In order to raise the debt limit at all, guarantees will be needed. Boehner told Obama later Monday afternoon we need real restraints, a balanced budget amendment and real reductions right now with guarantees it won't be undone in the future. "A bill that doesn't meet these tests can't pass the House," Speaker Boehner stated.


Tuesday was interesting. Chicago-style politics at their best raised an ugly head as President Obama told the public he "could not guarantee Social Security checks would go out on August 3rd." The President's reason? No agreement has been reached regarding an increase in the debt ceiling and according to Secretary Geithner's August 2nd [X-Date] Treasury wouldn't have the capital available to meet those payments. Of course, Obama failed to mention the real reason he could use the Social Security "threat." The President has refused to sign any short term legislation which would allow the Treasury to meet its obligations on August 3rd and has blocked the use of "other Treasury funds" while congressional leaders proceeded with "good faith" negotiations. Obama's inflammatory remarks ran on CBS News with Scott Pelley. The outcry against the demagoguery was significant. In the Senate, Minority Leader, Mitch McConnell stated next week Senate Republicans would be on the floor advocating a straight balanced budget amendment, S. J. Res. 23 that requires the federal government to live within its means. A stand-alone balanced budget amendment doesn't solve our current debt crisis, but it does help ensure we never return to unbridled government spending. S. J. Res. 23 is backed by all 47 Senate Republicans. Regarding the debt limit debate, Sen. McConnell went on to offer his "Last Choice Option" if the debt talks break down completely. As we stated, it isn't pretty. The option would give President Obama the authority to request of the Congress a debt ceiling increase ($2.4T) that will last through the end of his presidential term. According to the plan, the debt ceiling would be increased in three tranches. The first would be a request for $700B made in the next few weeks; the second would be in the fall for $900B; and the third would be in June of 2012 for $900B. A complicated political process would be employed to ensure each tranch is put into effect. Each request would be subject to a "Resolution of Disapproval," which if passed the President could veto. That veto could be sustained by 1/3 +1 in either the House or the Senate. Included in the "Last Choice Option" is a request that Obama list spending cuts he would like to see come about. When pressed for guarantees McConnell stated there aren't any but that Senate Republicans were not willing to risk the possibility of market reaction to any potential default. In a press conference Tuesday, House Republicans announced their balanced budget amendment to the Constitution would be on the House floor July 18th.


Wednesday, House Conservatives introduced legislation that would block Treasury from not meeting payments to service the US debt obligation (interest and principle on Treasuries) and active military duty pay. Rep. Steve King (R-IA), Rep. Michele Bachmann (R-MN), and Rep. Louie Gohmert (R-TX) held a press conference outlining "The Promises Act." The representatives recognized the leadership of Rep. Tom McClintock ( R-CA) and Sen. Pat Toomey (R-PA) who since the beginning of the year have attempted to ensure a prioritization of paying the interest and principle on our debt in order to avoid default. Additionally, King, Bachmann, and Gohmert chastised the President and the administration for playing games with the American people. Rather than stating that the President was lying, (as they are constrained from doing by the rule of Congress) the representatives stated that President Obama is being given "bad advice" by those in his administration. They encouraged Speaker Boehner to stop listening to the President because Obama's advisors are not telling him the truth. As usual, it appears the administration is causing a crisis and pushing everyone to "hurry up." As I tried to make clear, Obama is blocking the ability of Congress to negotiate by refusing to take the politics out of the room and holding the full faith and credit of the United States hostage. The American people began asking where is the president we need? One who instills confidence by saying, "We're gonna be okay and here's the plan to get us there. Obama keeps talking about "his plan." Where is it? As we said on Wednesday, Obama continues to use the Republicans to define the needs and solutions to the debt crisis then devises strategy to block their honest efforts with demagoguery as he proceeds with his "Big Government" agenda. Rep. Steve King (R-IA ) summed it up well, "The important part of the news today is when President Obama said seniors and veterans may not get their paychecks he was actually saying Obama is not putting a priority on seniors and military pay. If their checks are delayed, it is because Obama and Geithner chose not to pay them.


Thursday, the White House debt talks continued to stall. Speaker John Boehner, (R-OH) and House Majority Leader Eric Cantor (R-VA) showed their solidarity regarding the debt limit debate as they held a press conference pushing for a balanced budget amendment to the Constitution. Lately, Cantor has faced intensifying rancor from the Left. His refusal to allow any increase in taxes has won him the Left's ire and the confidence of many Conservatives. It's been reported that President Obama became so frustrated during talks at the White House Wednesday he told Cantor not to push him to the wall or Obama would "take it to the American people. Our response, "Sorry, Mr. President. You already played that hand and lost when you told seniors and veterans they might not get their checks in August." The public outcry against "fear mongering" continued as the Left and the liberal media intensified its efforts. We gave examples. Treasury Secretary Tim Geithner's "false and misleading" remarks concerning the potential default of the United States were picked up by the liberal mainstream media. They ran with it while Democrats channeled Reagan, blamed Bush and told Republicans they didn't understand the financial complexities. Thankfully, the Conservative intelligentsia is not dead. Scholar Veronique de Rugy from the Mercatus Center, George Mason University set left-leaning media outlet, Bloomberg straight. During a Reality Check segment on Wednesday, Ms. de Rugy stated even if the debt ceiling isn't raised the US won't default. She explained where and how Treasury has funds not only to service debt obligations but to meet Social Security payments as well. Yet Thursday, Bloomberg's In the Loop reporters seemingly unrepentant degraded the financial prowess of House Republican freshmen calling them "ignorant." I, of course, enjoyed reminding Bloomberg they had spent weeks mischaracterizing "default" and parroting Geithner. Mercatus "schooled" them. So, who is ignorant? But, most interesting was Bloomberg's reporters incredulity regarding Thursday's stable bond market. After all, Standard & Poor's, Moody's, Fitch had all warned of a potential downgrade in US government debt instruments. Credit agencies were requiring Congress to raise the debt ceiling by August 2nd as well as meet all debt payments (sovereign and otherwise) on time... which it's never done. Know any government contractors? In what appeared to be abject frustration one Bloomberg reporter stated Republicans would take the bond market's stability to heart... the bond market would have to react in order to get Republicans to move off their position. As we said then, are these guys trying to create a default? Also on Thursday, Treasury Secretary Geithner showed up at a press conference with the Democrats. Isn't he suppose to be the Treasury Secretary for all of US? (Pun intended.) All of this, while Republicans are busy trying to actually solve the debt and deficit problem putting ideas into action and passing legislation. The Democrats, whose only "plan" is in their heads, literally and figuratively, joined hands with the liberal media. Together they engaged in demagoguery potentially jeopardizing the full faith and credit of the United States. Fed Chairman Bernanke, who testified Wednesday and Thursday before the House Financial Services Committee on the Federal Reserve's Semi-annual Monetary Report did little more than offer the Obama Administration's policy points, however, the possibility of a QE3 was introduced as a "safety net" should the markets react. I can't understand how anyone believes these tactics won't turn us into the 1919 Weimar Republic! If you have any money get your wheelbarrow ready.


Friday, President Obama held a press conference to update the "progress" on the debt talks. He called for "shared sacrifice" as defined by the Left. Funny, the cloture motion to bring to the Senate floor S.1323, "Sense of the Senate on Shared Sacrifice" was rejected. (Anyone making $1M annually, heads up.) Guess Obama didn't get that update... or maybe he doesn't think America is watching... we're just too involved in what the simple folk do. Ya, sure. The press conference was nothing more than a display of Obama picking and choosing from the ideas Republicans have offered, while continuing to call for that "$4T big deal." Rhetoric. I came away from the press conference with a sense that Obama is willing to gut defense and tax the so-called "rich" while giving lip service to restructuring entitlements, cutting domestic discretionary programs, and supporting the military. He asked all leaders to "give me your plans" in the next 24 - 36 hours. We think he should have added, "...because I don't have one." More important was the actual work being done by Republican leaders who took the time to meet with James Powell from the Bipartisan Policy Center to take a more detailed look at the numbers. As The Hill reported, Republican leaders came out of that meeting with a reinforced sense of the need to raise the debt ceiling and extract guarantees. Those guarantees are cuts, caps, and a passed balanced budget amendment. We have been reporting on Mr. Powell's Debt Limit Analysis since July 1st with THE WEEKLY WRAP: Treasury Secretary Geithner & Raising the Debt Ceiling: "The Boy Who Cried Wolf?" and followed with another story on July 6th Debt Crisis: James Powell Answers Questions on Bipartisan Policy Center Report Regarding Default on Debt which we updated when a major news source oversimplified Mr. Powell's data.


As President Obama continues to "pick and choose" from the work of the Republican leadership, we'll keep watch. We're here through the weekend. Hoping to produce some informative and fun videos...More later.




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