McConnell Offers Debt Ceiling Out, But Obama Keeps Focus On Deficit

[Derechos]

snip

For all its talk of the importance of averting a debt default, the White House is signaling that major deficit reduction has become more than just a bargaining chip to bring Republicans aboard a debt deal.

Treasury Secretary Timothy Geithner opened Tuesday's meeting not by focusing on the perils of debt default, but instead with a "vivid" presentation on "what happens if you don't cut the deficit," according to a Democratic source familiar with the talks.

Geithner warned the group that ratings agencies are actively watching both the debt ceiling debate and the ability of Congress to turn around the nation's growing deficit and debt. He pointed to the economic unrest in Europe as evidence of what could happen in the United States if the White House and Congress don't tackle the deficit in a serious way.

Lawmakers obviously discussed the pressing consequences of debt default, said the Democratic official. And on that front there still "continues to be a big difference on revenue."

But as negotiations on a debt package resumed, Obama made it clear that he isn't playing small ball. He warned Republicans that the major concessions he has offered on entitlement reforms are off the table if they don't agree to a sizable debt deal. There could still be some tinkering with Medicare and Medicaid, he told the group, but it would come from the supplier side, not the benefit side.

http://www.huffingtonpost.com/2011/07/12/mcconnell-debt-ceiling-obama-deficit_n_896649.html

[FreakinDJ]

1. Raise the FICA cap and use the surplus to buy Treasury Bonds

best way to control inflation

[dkf]

5. Yeah buy more of those non negotiable treasuries right?

Did the "surplus" improve our ability to pay back the bonds from the general account? Lol. More of the same. It's a joke.

[FreakinDJ]

8. Of course not - they just tossed it in the General Fund

and used it to finance Wars and give Corporate Tax Breaks

I'm talking about, and as others in the Senate have suggested, limiting what surplus FICA funds can be spent on. Limiting their ability to be used as a "Hidden Tax" and used solely the fund the US Government increases their effectiveness 2 fold

1. Investors or not going to stop seeking the Security of US Treasury Bonds. Now how ever they will be in direct competition with the FICA surplus funds. This ensures interest rates will stay low as the surplus ensures no shortage of buyers for the Treasury Bonds.

2. The US Debt will now not be held hostage to interest rates and be on a much more stable platform for it's eventual reduction

[dkf]

2. Yup, it's not just the debt ceiling.

The rating agencies are looking at more than the default. They are looking at our future prospects also.

Thank goodness Obama is being an adult.

[Mo_Steel]

9. Rating Agencies

You mean the same ones who rated banks AAA until just before they went bankrupt? Or the ones who stated that their ratings are merely opinions?

The rating agencies are a joke. If you want an indicator of whether or not the debt ceiling is a concern, consider that 10 week T-bills are being bought by investors at 0% interest. Seems like a piss poor thing to buy if there were a chance of not getting paid back.

[KittyWampus]

3. He's got his eyes on the Election, for sure. Rip the "deficit" issue from their grubby paws.

[dkf]

7. Polls show the public wants to cut government spending so he is on the right track.

[mmonk]

10. The general public does not have degrees in economics.

They have politics and propaganda.

[FreakinDJ]

14. They want to cut "Deficit Spending" not "Government Spending"

[Cereal Kyller]

4. Take their own stick and shove it down their throats!

Well played, Mr. President.

[kenny blankenship]

11. While you put out America's eyes. Yes, well played Mr. President!

Keep right on doing that.

[dionysus]

12. you're right. he wants to destroy us all, to see milions die, starving in the streets. the horror.

the horror...
:scared:

[mmonk]

6. Supply sider framing.

In an economy that is down as our is, concentrating on deficit spending as the problem is definitely supply side ideology.

[Lil Missy]

13. "it would come from the supplier side, not the benefit side."