Daily Debt: Boehner Plan A Loser
So, it seems the Republican Party still hasn’t found what it’s looking for. After putting all of their hopes in the long awaited “Boehner Plan,” it turns out that the $1.2 trillion in cuts the Speaker of the House promised doesn’t come anywhere near that number. The non-partisan Congressional Budget Office analyzed the deal and discovered it was only $850 billion in savings, well under what the Republican declared necessary in order to have a primary vote to raise the ceiling $1 trillion (which would force another debt ceiling battle right before the 2012 election).
One thing he doesn’t seem likely to retool out of his bill? The call for a vote on a balanced budget amendment. Which leads some to point out that the entire time the GOP had a majority under President Bush, no one seemed to think a balanced budget amendment was worth voting on. Of course, Bush also had nearly four times the spending that President Obama has proposed, and the Republicans had no issue with that, either.
Meanwhile, we are now under a week until the August 2nd default deadline. Companies have already begun contingency plans that involve hiring freezes and reducing spending to reserve cashflow in light of the raise in loan rates. But the potential financial repercussions seem to matter little to conservatives, especially the Tea Party faction, where leader Jim DeMint is urging his caucus not to “chicken out” on the debt stalemate. But some analysts, perhaps in an attempt to keep the markets calm, are claiming August 2nd isn’t a real deadline, simply when the country can no longer borrow. According to them, there’s actually another two weeks before the U.S. officially runs out of money.
In other words, the credit card is maxed out on August 2nd, but if it helps, the bill doesn’t actually have to be paid until the 15th.
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