January 25, 2021

Debt Ceiling Talks Collapse as Boehner Walks Out

The latest turn in the summer’s epic clash between the White House and Congressional Republicans came little more than a week before the government hits its borrowing ceiling, and set off accusations from both sides about who was to blame.

A visibly angry President Obama, in a hastily scheduled White House news conference, demanded that Congressional leaders come to the White House on Saturday morning. “I want them here at 11 a.m. tomorrow,” he said. “They are going to have to explain to me how it is that we are going to avoid default.”

Mr. Obama said Mr. Boehner had stopped returning his calls when it became clear that rank-and-file House Republicans would not agree to raise revenues on wealthy Americans as part of a debt-reduction deal, despite Mr. Obama’s concessions on reducing future spending for Medicare, Medicaid and Social Security. Both sides have sought a deficit-reduction agreement as part of the essential vote to raise the government’s $14.3 trillion debt limit, which will be reached Aug. 2.

In a letter to his Republican colleagues on Friday night, Mr. Boehner said, “A deal was never reached, and was never really close.” He added: “In the end, we couldn’t connect. Not because of different personalities, but because of different visions for our country.”

The speaker said Mr. Obama wanted to raise taxes too high and would not make “fundamental changes” to entitlement benefit programs like Medicare.

But according to a White House official, Mr. Obama had agreed over the coming decade to cut $250 billion from Medicare spending and $310 billion from other domestic entitlement programs, like farm subsidies and education programs. And Mr. Obama was willing to change the formula for Social Security cost-of living adjustments, which many economists say would more accurately reflect inflation, for savings of about $125 billion more.

All of Mr. Obama’s concessions on the benefit programs were contingent, however, on Mr. Boehner and Republicans agreeing to higher taxes for wealthy individuals and corporations.

At the news conference, Mr. Obama said Republicans were forfeiting an “extraordinarily fair deal” to trim the deficit and raise the debt ceiling. “I have gone out of my way to make compromises,” the president added.

“Essentially what we had offered Speaker Boehner was over a trillion dollars in cuts to discretionary spending, both domestic and defense,” Mr. Obama said. “We then offered an additional $650 billion in cuts to entitlement programs Medicare, Medicaid, Social Security. We believed that it was possible to shape those in a way that preserved the integrity of the system, made them available for the next generation and did not affect current beneficiaries in an adverse way.”

Republicans, though, said that the White House pushed for more revenue midway through the talks. “The White House moved the goal posts,” Mr. Boehner said in a news conference.

The breakdown was the second time this month that Mr. Boehner had walked away from the table with Mr. Obama after word of their private talks was leaked to the news media, provoking protests from Republican lawmakers and antitax conservative groups.

“I’ve been left at the altar now a couple of times,” Mr. Obama said. “And I think that one of the questions that the Republican Party is going to have to ask itself is, Can they say yes to anything?” 

This time, however, Mr. Obama had also faced a firestorm from within his party, because of the spending cuts he was considering with Mr. Boehner.

Hours before the tempest, the three top stewards of the nation’s financial system — Treasury Secretary Timothy F. Geithner; Ben S. Bernanke, chairman of the Federal Reserve, and William C. Dudley, president of the Federal Reserve Bank of New York — had met to discuss how to react to shield the economy from the blow if Congress failed to raise the debt limit. But in a joint statement, they said they remained confident Congress would act.

Mr. Obama, too, said he thought that default could be avoided. “I am less confident at this point that people are willing to step up to the plate and actually deal with the underlying problem of debt and deficits,” he said at his news conference.

Mr. Boehner said he would work now with Senate leaders on a plan to raise the debt limit.

Article source: http://www.nytimes.com/2011/07/23/us/politics/23fiscal.html?partner=rss&emc=rss

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