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President’s Jobs Measure Is Turned Back in Key Senate Test

October 12, 2011 by Leave a Comment

The legislation, announced with fanfare by the president at a joint session of Congress last month, fell short of the 60 needed to overcome procedural hurdles in the Senate.

The vote in favor of advancing the bill on Tuesday was 50 to 49. Two moderate Democrats facing difficult re-election campaigns, Senators Ben Nelson of Nebraska and Jon Tester of Montana, joined a solid phalanx of Republicans in opposition. In addition, the Senate majority leader, Harry Reid, Democrat of Nevada, switched from yes to no so that he could move to reconsider the vote in the future.

Given Mr. Obama’s repeated demands, as he traveled the nation in recent weeks, that Congress pass the bill intact, the Senate’s vote to block the measure represented a significant setback and came after leaders of his own party had adjusted the measure to include a surtax on incomes of more than $1 million to round up additional Democratic votes.

After the vote, the president criticized Republicans for balking at a measure that included initiatives they supported in the past.

“Tonight’s vote is by no means the end of this fight,” the president said in a statement. He added, “In the coming days, members of Congress will have to take a stand on whether they believe we should put teachers, construction workers, police officers and firefighters back on the job.”

Votes on pieces of the bill could begin this month, perhaps as early as next week, Senate Democratic aides said. Party leaders said they needed to consult their caucus before they decided on the timing or chose the provisions to be considered separately.

Several Democratic senators said they might join a handful of Republicans in searching for job-creation proposals that could gain bipartisan support — a formidable challenge in a chamber where comity seems to worsen by the week.

House Republican leaders have said they do not intend to take up the president’s bill as a whole. But they welcomed the signal from the White House that the administration would be open to a piecemeal effort.

The House majority leader, Representative Eric Cantor, Republican of Virginia, said he hoped “the president will drop his all-or-nothing approach and begin to work with us on areas of commonality,” including initiatives that could promote hiring and economic growth.

“We are willing to take up the things we can agree on,” Mr. Cantor said.

The president’s bill is a mix of public works spending and temporary tax cuts intended to respond to what Mr. Obama calls an economic crisis and an emergency. Senate Democrats tried to make the president’s bill more palatable by adding a surtax of 5.6 percent, starting in 2013, on income in excess of $1 million.

As the Senate moved toward a vote Tuesday, Mr. Reid made an accusation heard with increasing frequency from Democrats: Republicans were opposing the president’s jobs bill because, for political reasons, they wanted the economy to remain in bad shape.

“Republicans think that if the economy improves, it might help President Obama,” Mr. Reid said. “So they root for the economy to fail and oppose every effort to improve it.”

The Senate Republican leader, Mitch McConnell of Kentucky, replied in kind. “Democrats have designed this bill to fail — they’ve designed their own bill to fail — in the hope that anyone who votes against it will look bad,” Mr. McConnell said. “This whole exercise is a charade that’s meant to give Democrats a political edge in an election that’s 13 months away.”

Senate Democratic leaders said the vote Tuesday showed that a majority of the Senate — 51 senators, including Mr. Reid — wanted to take up the bill.

Helene Cooper contributed reporting from Pittsburgh, and Mark Landler from Washington.

This article has been revised to reflect the following correction:

Correction: October 12, 2011

An earlier version of this article used the wrong unit of measurement for the Labor Department’s measure of nonfarm payroll employment. It recorded 131.3 million people in September, compared with 132.8 million in February 2009, not those respective quantities in dollars.

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Filed Under: Economy News Tagged With: , ,

Rival Debt Plans Being Assembled by Party Leaders

July 25, 2011 by Leave a Comment

The dueling plans emerged after Mr. Boehner walked away from negotiations with the White House on Friday, leading to a frustrating weekend of talks in heat-scorched Washington. The leaders of both parties variously negotiated together over the phone, talked separately, conferred with their caucuses and tried to plot an end to the debt crisis that would assure the capital markets around the world that America would meet its debt obligations.

As the Aug. 2 deadline for lifting the debt ceiling nears, warnings are growing that the nation’s economy may be damaged by the protracted stalemate. A downgrade of the nation’s credit rating, which could raise the cost of borrowing, seemed more likely, deal or no deal.

Mr. Reid, the Senate’s top Democrat, was trying on Sunday to cobble together a plan to raise the government’s debt limit by $2.4 trillion through the 2012 elections, with spending cuts of about $2.7 trillion that would not touch any of the entitlement programs that are dear to Democrats or raise taxes, which is anathema to Republicans.

President Obama could endorse such a plan, even though it would fall far short of the ambitious goal of deficit reduction and entitlement changes that he says are necessary to shore up the nation’s finances.

At the White House on Sunday evening, Mr. Obama spent about an hour meeting in the Oval Office to try to hash out details of the Democratic proposal with Mr. Reid and the House Democratic leader, Nancy Pelosi. The two emerged from the meeting with nothing to say to the throngs of reporters who had been encamped there for the third consecutive weekend, awaiting an agreement on the debt ceiling.

But administration and Congressional officials said that during the meeting, Mr. Obama and the Democratic leaders had resolved to hold firm against any short-term agreement that did not raise the debt ceiling beyond next year’s presidential elections.

“You see how hard this is right now,” one administration official said Sunday night. “Can you imagine going through this again in six months?”

That means, officials say, that Mr. Reid’s proposal may gather steam as the only viable alternative that is palatable to the administration.

The contours of Mr. Boehner’s backup plan were not entirely clear, but it seemed likely to take the form of a two-step process, with about $1 trillion in cuts, an amount the Republicans said was sufficient to clear the way for a debt limit increase through year’s end. That would be followed by future cuts guided by a new legislative commission that would consider a broader range of trims, program overhauls and revenue increases.

“The preferable path would be a bipartisan plan that involves all the leaders, but it is too early to decide whether that’s possible,” Mr. Boehner said in a “Fox News Sunday” interview. “If that’s not possible, I and my Republican colleagues in the House are prepared to move on our own.”

In a conference call with Republican lawmakers that lasted over an hour on Sunday night, Mr. Boehner said he was seeking “a vehicle that can pass in both houses,” according to someone on the call, who added that Mr. Boehner had made an emotional appeal to his fellow Republicans to stick together. “If we’re divided,” he said, “our leverage gets minimized.”

One freshman lawmaker on the call described Mr. Boehner as sounding weary and said many Republicans were focused on some version of a balanced budget amendment, which was already passed by the House as part of broader legislation but then rejected by the Senate.

For the White House, the Reid proposal represents a Hail Mary pass that is meant to, at the very least, avoid putting the country through a repeat of the debt ceiling negotiations next year, an election year.

Jackie Calmes contributed reporting.

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Push for Broad Budget Deal Intensifies Among Leaders

July 21, 2011 by Leave a Comment

The White House suggested for the first time that Mr. Obama might be willing to agree to extend by a few days the Aug. 2 deadline for legislation to increase the government’s debt ceiling if a deal was in sight, stepping up the pressure on the two parties to come to terms.

Mr. Obama met separately at the White House with Republican and Democratic leaders. But neither side reported any substantive progress as they searched for a formula that would include deep spending cuts, cost-saving changes to entitlement programs and an overhaul of the tax code that would increase revenues by closing certain tax breaks and eliminating deductions but also lower some tax rates.

Politically, the main question remained whether House Republicans would be willing to negotiate over any package that could be construed as raising taxes, and throughout the day there were signs of internal debate among party leaders.

Speaker John A. Boehner has shown continued interest in a deal if it can be done in a way that emphasizes lower tax rates.

But Representative Eric Cantor, the No. 2 Republican, and others like Representative Paul D. Ryan of Wisconsin, the Budget Committee chairman, warned that the most specific proposal to be made public so far — and the one that has done the most to reopen the possibility of a bipartisan accord — relied far too much for them on higher revenues to cut projected deficits.

That plan is the one put forward Tuesday by the so-called Gang of Six, a bipartisan group of senators who worked for months to reach an agreement and whose work was lauded by Mr. Obama as a sign that a deal was possible. The plan included a net increase in government revenue of about $1 trillion over a decade.

“I am concerned with the Gang of Six’s revenue target,” Mr. Cantor said.

Deepening the impasse was growing opposition among House Republicans to a fallback position developed by Senator Mitch McConnell, the Republican minority leader, that would allow the debt ceiling to be raised without any support from Republicans but also would not impose the dollar-for-dollar cuts in spending that have been central to the party’s negotiating position.

With no other good alternative in sight other than missing the Aug. 2 deadline and risking a default on United States government debt, some Republicans appeared more willing to consider a deal that would give them the deep spending cuts they have sought. Conservatives have been increasingly divided over how far to go in sticking to their no-taxes principles if it means walking away from progress toward restraining the growth of government.

At the White House, officials mixed signs of encouragement with concern that time is running out to avert a full-scale crisis.

“There is still time to do something significant if all parties are willing to compromise, because the parameters of what that might look like are well known, especially to the participants in the negotiations the president oversaw last week,” said Jay Carney, the White House spokesman, who later limited any extension to a matter of days.

With an eye on the calendar, the president summoned leaders of both parties to build on Tuesday’s release of the $3.7 trillion deficit-cutting plan by the Senate’s Gang of Six.

Administration officials saw that plan as evidence there was some bipartisan consensus to cut spending, reshape entitlement programs like Medicare and call for a future tax overhaul, slicing trillions of dollars from projected deficits over the next decade.

The four top House leaders — Mr. Boehner, Mr. Cantor; Representative Nancy Pelosi of California, the Democratic leader; and Representative Steny H. Hoyer of Maryland, the No. 2 Democrat — met privately Wednesday and, according to officials, reviewed problems with the McConnell plan. Putting it in place would require some House Republicans to back it, and the idea has met with heated resistance in the House even as a last-ditch effort.

Such talks between the party leaders in the House are rare given the polarized relations in that chamber and reflect the recognition that the Republican majority cannot pass the increase in the debt limit without a significant number of votes from Democrats.

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