Money Talks, Cantor Walks — Where Are We On The Debt Ceiling Negotiations?

We’ve already hit the official debt ceiling, although accounting tricks can keep the default at bay for at least a few more weeks.  But with Republicans walking out of the talks in a huff, it’s hard to see how a deal can be reached before the economic disaster truly strikes.

A new problem being added into the fold?  Republican leadership no longer agrees on what it is they actually want to gain out of the talks themselves, and what they will count as a “victory” in order to get a vote passed.  The newest issue?  House Majority Leader Eric Cantor has removed himself from the negotiation, no doubt hoping that he can oppose whatever compromise Speaker of the House John Boehner agrees to, setting himself up to challenge Boehner for his leadership spot.  Slate actually refers to this hissy fit “impasse” as progress, as that means Republicans might be ready to set someone up to take the fall when it comes to reaching an actual, workable compromise.  Minority Leader Pelosi laid out some of those potential “sticking points” that Cantor is balking on: ““Yes, we do want to remove tax subsidies for big oil, we want to remove tax breaks for corporations that send jobs overseas, that list goes on. I don’t know that’s a reason to walk away from the table when we’re trying to find a balanced approach.”

Meanwhile, a coalition of Republicans, lead by South Carolina Senator Jim DeMint, is throwing an even bigger wrench into the negotiations, adding a new demand to an already endless list of do’s and don’ts (do cut social programs and the safety net, don’t rescind tax cuts for rich people or corporations, etc).  DeMint and his colleagues are now requiring “cap, cut and balance,” a three fold plan to cap spending on a variety of programs like Medicaid, Medicare, Social Security, etc, cut spending, mostly in regards to those previously mentioned programs, and force the budget to be balanced each year.  It’s this new push that Cantor appears to be throwing himself behind, stating a balanced budget amendment will be voted on in the House next month.  Should the balanced budget amendment pass, it would require a super majority vote to allow the government to spend more than it takes in, a somewhat terrifying idea when one considers how little legislation has been passed in the last decade thanks to the newer, simpler filibuster rules and secret holds.  The amendment would also require ratification by 3/4ths of the states, a great boost for the Republican presidential race in 2012 should it get to that stage.

As the final stage of the talks are hopefully being entered, we are still assuming that both sides are negotiating in good faith.  But what if Republicans don’t actually want to balance the budget?  After all, according to the Congressional Budget Office, there is one very simple way to put the country back on the path to paying off the debt — end the Bush era tax cuts.  Yet Republicans are balking, calling it a tax increase and saying that is completely off the table.  They still argue that allowing the rich to have more money in their pockets will spur economic growth, despite that fact that we have been in the worst recession in decades every since these cuts were implemented, and every dollar that is provided to lower income people, either by welfare, subsidies or unemployment payments, goes almost immediately back into the economy in the form of groceries, housing and consumer spending.  As Sen. Jeff Sessions argued in a recent piece on The Hill, “A punishing tax increase would not only threaten needed growth, it would also give a free pass to the egregious overspending in Washington—a behavior that is both morally and economically culpable for our current crisis.”

Republican are taking money from those who actually spend it to protect those who have done nothing but hoard it.  And, of course, make financial contributions to the GOP.  No wonder the negotiations don’t seem to be going anywhere.

Photo credit: Photo: via Wikimedia Commons


Mike B.
Michael Barnes6 years ago

Social Security and Medicare are separately funded by law. The GOP co-mingles those funds with the general revenue by having Treasury issue bonds. This allowed them, for many years, to finance tax cuts for the wealthy and to fight wars. When people (congress) talk about 'capping' benefits, or 'privatizing' Social Security, what they are advocating is defaulting on debt to the middle class to honor debt to the wealthy (not requiring them to pay taxes at the rate they were paying when the money to lower their burden was appropriated from Social Security). This is not socialism. Socialism socializes costs to the commons to benefit all. This is redistribution of wealth from the lower to the upper classes; akin to communism.
The budget could be brought into surplus by cutting military/security spending from $1.1 trillion to $600 billion, rescinding the Bush tax cuts, taxing unearned income at the same rate as earned income, and requiring corporations to pay their share, Currently, because many do not pay at all, they are only contributing 15% of gross revenue.
In order to keep the budget balanced, corporations should be penalized for off shoring jobs. They should not receive amnesty for returning to the States, but they should receive more favorable tax treatment than for being abroad.

Mary B.
Mary B6 years ago

Why would anyone seriously think that the Earths richest country could run their budget like we regular folks must run our personal budgets? We don't have to deal with global issues that span decades.Or wars, natural disasters,man made disasters, space programs, country wide infrastructure building and mantainence,public education, police,courts,prisions fire,health threats from pandemics, research funding,aid to other countries,and lord knows how many other things I haven't named. Of course we have to keep raising the debt ! Get it in perspective! And thank you James E for pointing out who it really is that holds the debt.So why are the rich trying to get out of giveing back, in proportion to what they have gained? The theories I've heard make no sense. They don't need slave labor. They can't create enough jobs to keep everybody employed, and what's to be gained by being warden to the worlds population? Way to expensive and dangerous.They are so vastly out numbered. Nobody's got their back.

Glenn M.
Glenn Meyer6 years ago

Gee nothing about out-sourcing of U.S. jobs. Imagine.

Cutting spending on so called entitlements is near worthless for addressing the deficit. Those that advocate this, also advocate that the wealthy and fictional entity corporations not pay taxes. The only justification is the creation of jobs. But where?

Corporations have over-powered our government which now believes that out-sourcing and off-shoring is inevitable and necessary with expectations that the middle class should just fall on their swords.

The underlying cause of the financial collapse, is from out-sourcing and off-shoring of U.S. jobs and borders on national security with the loss of our middle class tax base. And yet, this nation does nothing, not even protest against out-sourcing and off-shoring and demand it be restricted by whatever method. International businesses are doing the un-American activity of destroying U.S. salaries, U.S. businesses that hire within this country, and destroying the U.S. marketplace as an end result.

Infrastructure spending and tax breaks will not create enough jobs to keep up with out-sourcing and off-shoring.

Cutting programs that support the lower and middle class will further strain the non-wealthy classes who will not even receive the benefit of lower prices as a result.

Neither party will do anything about it and unless we begin grass roots efforts to protest out-sourcing and off-shoring of U.S. jobs we will deserve what we get.

If nothing is done

Danny W.
Danny Wilson6 years ago

Obama should call their bluff and turn the tables on them...

Danny W.
Danny Wilson6 years ago

Obama needs to call their bluff, turn the tables on 'em...

Marie W.
Marie W6 years ago

Imaginary figures from a fantasy world.

Marilyn L.
Marilyn L6 years ago

This should prove to many Americans that the leadership of the Republican Party does not care what the people think, nor are they serious at all in finding real solutions.

Robyn O.
Robyn O6 years ago

To William G: What is the matter with you? Are you that rich that you don't want to pay taxes and support our country and government? PresO is no socialist or Marxist and to think he is either shows ignorance of the definition of those two philosophies and ignorance of capitalism. The debt is from (as every thinking person knows) allowing the corporate oligarchy in this country to skip paying taxes, and screw the people who actually work in real jobs, not those who have the choice to add to their already huge investment portfolios. How many wealthy people's tax forms have you ever filled out? I have and I know how they get around paying even half of their fair share. They have loopholes you can't conceive of. Believe me, it's true. And we should go back to building roads, schools, power plants, hospitals (open to all, this time) and, yes, even parks and museums. We have a country of bored, ignorant, undereducated people who are lured into submission by pop "culture" and that's just what the corporations and their fellow-travelers want.

Ray M.
Ray M6 years ago

How can anything get done when elementary school children are at the table whining because they can't get their way, have temper tantrums and quit playing? Sheesh! Here's a novel idea...why don't they just quit their jobs? Can't stand the heat? Get out of the fire, republicons.

Phil P.
Phil P6 years ago

Eric Cantor should remove himself - period. At this point the whole House of (Corporate) Representative is totally dysfunctional and waste of taxpayer money. We could balance the budget and reduce the deficit with the money that wasted on that bunch of inflated egos and thieves. Unfortunately the Senate is not much better. To rely on those elected bodies to truly represent the "People of America" and to put partisan politics aside is like hoping to get a big, unsecured loan when your credit score is 450. Good luck to us all, we're going to need it to survive the next few years.