Gus Bilirakis Won't Vote For Clean CR

Voters should remember that Rep. Gus Bilirakis vowing not to vote for a clean continuing resolution to fund the federal government.

“I am not in favor of shutting the government down," the Palm Harbor lawmaker said in a statement. "However, there are a number of policy issues that deserve to be discussed and negotiated before I would consider a clean CR. These issues include treating Congress like the rest of America under the health care law and getting our runaway spending under control. The President and Senate must sit down with the House to discuss these important issues first.”

The media should ask Bilirakis how does he expect to get President Barack Obama to sign legislation to defund Obamacare. It is not going to happen.

Ted Yoho Needs to Take an Economics Course

Sen. Tom Coburn went on CBS to claim that the United States will be able to pay its bills if the debt ceiling is not raised. The reality is the Treasury Department will be broke because it can no longer borrow money to pay its bills. Rep. Ted Yoho doesn't want to raise the debt ceiling. Ever. In fact, Yoho claims not raising the debt ceiling would be great.

“I think we need to have that moment where we realize [we’re] going broke,” Yoho said. If the debt ceiling isn’t raised, that will sure as heck be a moment. “I think, personally, it would bring stability to the world markets,” since they would be assured that the United States had moved decisively to curb its debt.

If the Treasury Department runs out of money there will be a credit freeze. The last time there was a major credit freeze was in 2008 after Lehman Brothers went under. The result was the biggest financial crash since the Great Depression. It should be required that candidates take an economics course before they run for Congress.

Quote of the Day

"There’s no such thing as a debt ceiling in this country because it’s never been not increased, and that’s why we’re $17 trillion in debt. And I would dispel therumor that’s going around that you hear onevery newscast that if we don’t raise the debt ceiling, we’ll default on our debt -- we won’t. We’ll continue to pay our interest, we’ll continueto redeem bonds, and we’ll issue new bonds to replace those."

Sen. Tom Coburn, on CBS This Morning

I hope Sen. Coburn enjoys living in the land of make believe.

Rubio the Debt Ceiling Hack

The bullshit is getting thick. Sen. Marco Rubio (or more likely his speechwriter) penned an op-ed claiming that President Barack Obama is trying to cause foom through hid "wrath."

It is unfortunate that the president and his allies would seemingly take our government to the brink in order to compel us to fund his disastrous health care law. Every day brings new examples of how this law is hurting working-class Americans, or how even former supporters of the law are now asking to be spared Obamacare’s wrath.

It takes serious chutzpah for Rubio to make this assertion. Rubio is threatening to vote against raising the debt ceiling and allowing the Treasury Department to default.

"We should refuse to raise the debt limit by one single cent unless we pass and the president agrees to sign a budget that shows us how we’re going to get to balance in at least 10 years," the Republican said.

"This is not an unreasonable request. They will say that it is. But it is not," Rubio said, pointing to the size of the federal debt. "They will say ‘oh, you’re going to risk default.’ The $17 trillion debt is the risk of default. The lack of any plan to fix it is the risk of default."

Rubio is now feeling the heat from Senators in his own party on his stupidity on not wanting to raise the debt ceiling. Rubio's own ignorance shows he doesn't have an understanding of economics. The Treasury Department has never defaulted. Partly because the Treasury is where the money is made. Financial institutions have never had a problem with loaning Treasury money because the Treasury always paid off its debts and was obligated to under the law. Rubio would throw the United States credit standing away, at a time when America and Europe are going through painful economic recoveries. All because Rubio wants to be president. Exactly what kind of economy does Rubio think he will inherent? Rubio should at least stand up for his own policy positions and not blame Obama for his actions.

Ted Yoho Wants the United States to Default

Florida Congressman Ted Yoho told people at a town hall meeting that credit agencies would love it if the federal government didn't raise the debt ceiling and defaulted.

I think the creditors that we owe money to around theworld would say, "you know what, they're getting their house in order." And I think our credit rating would do better, if we did that thanface the mass [sic] program we've beenup to ... There are severalof us that we'renot raising the debt ceiling; don't ask us. We don't have a money problem, we have a spending problem.

Enron and World Com were downgraded when it became apparent that these companies couldn't pay their bills. Foreign governments and banks are not going to want the United States to default and announce to the world that they aren't going to pay their debts. What Yoho is proposing is turning the United States into Greece or a banana republic. You can kiss the days of the United States being a world economic power goodbye.

Marco Rubio is Still an Economic Illiterate

Sen. Marco Rubio's reasoning for not allowing Republican House members to conference with the Senate is mind-boggingly stupid. Rubio tweeted this gem.

Rubio, who has made a couple floor speeches about the standoff, tweeted this evening: "Will keep objecting to budget negotiations moving forward until Senate leaders agree to rule out raising #DebtLimit." If they don't plan to raise #DebtLimit in budget then why do they object to putting it in writing upfront?"

Rubio's position is he won't let the House of Representatives conference with the Senate because he wants the federal government to default. That is exactly what would happen if the debt ceiling isn't raised. Congress controls the power of the purse. The main job of Congress is to pass a budget. Rubio is denying Congress the ability to fulfill its constitutional responsibility so he can create a potential international economic crisis.

Every country on the planet is tied to United States currency. The most likely scenario would be countries freezing credit. A credit freeze is what caused the crashes in 1929 and 2008. The federal government doesn't have the revenue to pay the debt. If the debt ceiling isn't raised the international markets will panic. Rubio throws his political spitballs but he never offers a solution. Of course, Rubio ignored Alex Sink's warnings to deal with Florida's debt.

The Investors Strike Back

One of the paradoxes of the Great Recession (I do not recognize this "double dip" phrase because I never saw the first recession end) was that corporations were swimming in profits -- and stock prices were sky high. We almost grew used to seeing the Dow Jones index above 12,000 points. All of that changed in the past few days, since the debt ceiling was raised -- the Wall Street ceiling has fallen. Nobody knows when it will land.

Despite investors placing money in corporations by purchasing their stock, American employment has been stagnant -- companies didn't want to hire, despite having the cash to expand. Companies argued that markets for new goods didn't exist since, well, none of them were hiring new people.

That negative feedback loop perpetuated itself until Obama was elected, passed a historic stimulus bill that spent a few hundred billion on needed infrastructure repairs around the country, put people back to work, created markets of employed workers who would purchase more goods, and prompted private companies to start hiring again to cash in on the new prosperity.

Hah! Just kidding. Obama's "stimulus" bill spent $26 billion on highway infrastructure projects, while allotting $116 billion for a tax credit. Fat lot of fucking good that did -- Obama added that to get Republicans to vote for the stimulus deal, which none of them did. Corporations awash in investors money still didn't hire, and now investors finally realized that corporations tied to their stock portfolios weren't going to expand, so they fled.

Lesson to corporations: If you don't spend the money when you have it, then you lose it.

Lesson to Obama: Stop fucking around with Republicans on useless bullshit like deficit cutting when, right now, we need deficit spending like crazy -- and that doesn't mean spending on tax cuts. Raise those. And if you can't sell this policy to the American people, sit aside and let a candidate who will do the right thing run for president.

For those keeping score at home...

S&P revoking the United States AAA credit rating will force us to pay more interest on our bonds, thus increasing our debt when we're forced to pay that interest back to bond holders.

This, naturally, will increase our national debt.

One reason why S&P revoked our AAA rating is because of political turmoil in this country -- indecision and infighting caused our politicians to push the economy to the brink. Which is amazing since we weren't facing an immediate crisis.

Who caused this needless, high stakes political brinkmanship that not only held the economy hostage, but will also increase the national debt? The Tea Party, aided and abetted by their (now) Republican slaves.

Now if President Obama can't hammer away at this obvious and obvious hypocrisy -- and FIGHT against them WITHOUT compromise -- then please don't blame people like myself when he loses in 2012.

I'm so sick of this shit. I thought I voted for a president who would fight for the good of the nation, so what the fuck happened?

Triangulation Man: Debt Ceiling Aftermath

President Barack Obama wanted to appear centrist. Which is why Obama caved on the debt ceiling deal. The Real Clear Politics poll tracker shows Obama's job approval rating dipping to 44 percent. To make matters worse, the stock market went down 512.76 points. Translation: the gains the market made in 2011 were wiped out. Obama admitted yesterday that the debt ceiling crisis has hurt the economy.

"Unfortunately the debt ceiling crisis over the last month, I think, has had an unnecessary negative impact on the economy ... as well," he said.

My question is why did Obama placed being portrayed as centrist? I don't buy that Obama or Congressional Republicans were seriously concerned about the budget deficit or national debt. Otherwise, both sides would not have allowed the FAA to lose $1 billion in tax revenue. Obama threw the Social Security surplus on the table. Republicans took corporate jet tax breaks off the table. The White House thinks pissing off their base will make them appear more centrist. Republicans are terrified that their base will turn on them if they do anything that smells like a tax increase. The truth is most voters care about Social Security and could care less about corporate jet tax breaks. This tells you how far disconnected Washington is from reality.

Former President Bill Clinton prepared himself for Republicans using the debt ceiling against him.

“Here’s what happened, as I remember – but let me back up a second,” Clinton said. “I have read accounts of that time where people at Treasury have been interviewed, and they say they did look into [the president's authority to raise the debt ceiling without congressional approval].” As for the Republicans, “they did think about doing that" -- withholding approval of a higher limit -- "and I knew they were thinking about it.” But the question ultimately did not arise for Clinton, he says, because his opponents in Congress decided “they didn’t want to get caught” in a position where they appeared to be repudiating the debt incurred by their own party’s two previous presidents.

“The reason that raising the debt limit is so unpopular is that people think you’re voting to keep [increasing] deficit spending, instead of voting to honor obligations that were already incurred,” he said. “I think [the Gingrich Republicans] figured I’d be smart enough to explain to the American people that they were refusing to pay for the expenses they had voted for when Ronald Reagan and George H.W. Bush were president. And that would make ‘em look bad.”

How the 14th amendment argument would have played out is unknown. What is known is Clinton used the behind the scenes threat of executive power and telling the American people that the debt was created from Republican presidential spending. People will argue that Clinton was dealing with a different congress than Obama.

If you mean the Congress that had members that would later try to impeach Clinton out of office then you are correct. Republicans held both the House and Senate during the 1995 government shutdowns. Like the tea party elected officials under Boehner and McConnell, the Contract With America Republicans were insane. George Stephanopoulos detailed how Dole gave up trying to control his caucus and went to Iowa to campaign. Gingrich complained to the Clinton White House that he couldn't control his newly elected radicals. This is exactly what Clinton wanted and how he got the Republicans to cave. Boehner had trouble passing his own debt ceiling plan with his own caucus. It would have been easy for someone with Clinton's skills to play Boehner, Cantor, McConnell and the tea party Republicans off of each other.

What enabled Republicans is they knew Obama would flinch and want to appear centrist. Sen. Tom Coburn rightfully said that Obama would sign any debt ceiling bill that reached his desk.



The DCCC wants to attack House Republicans for supporting Medicare cuts. Apparently, the DCCC is forgetting that the President actively pushed for Medicare cuts in the debt deal. The so-called Super Congress will likely support entitlement cuts. If and when that happens several Democrats will have a hard time explaining why they voted for the debt ceiling deal.

I am not excusing the Republicans reckless behavior for one second. However, Obama was elected to "change" the way things are done in Washington. Not use Dick Morris' triangulation playbook as a means to govern. I wrote posts before Obama was elected president that he is not a progressive. I didn't expect to agree with Obama on every policy. I was expecting Obama to govern with competency. Watching Obama govern with super-majorities was painful. Government has now become utterly incompetent. Obama certainly can't be blamed for everything, but this do nothing Congress and stock market crash is on his watch.

Quote of the Day

"I'd like to see a plan that cuts $900 trillion."

Alan Simpson, on the debt ceiling deal.

It is obvious that Simpson doesn't realize that the national debt is 14.3. Simpson wouldn't have an answer what to do with the surplus. I can guarantee that Simpson will not want a penny to go to social programs.

People wonder why I bash Obama on policy and triangulation. Only a President obsessed with appearing centrist would appoint someone as ignorant as Simpson to the deficit commission.

House Debt Ceiling Vote

Here is how members of the House of Representatives voted on raising the debt ceiling. Less Republicans voted against raising the debt ceiling than Democrats. President Obama will take this as triangulation being a success.

Read more »

This is What Bipartisanship Looks Like

Sen. John McCain McCain and Sen. Dick Durbin have an actual debate on the Senate floor. McCain and Dubin disagree on several points. McCain and Durbin do agree that the United States cannot default and that elected members of Congress must govern. McCain takes House Republicans to task for their insistence on a balanced budget amendment in the Constitution.

Bernie Sanders Votes No on Debt Deal

Sen. Bernie Sanders issued this press release.

Sen. Bernie Sanders issued the following statement today after he voted against a Senate deficit- reduction proposal:

"The Republicans have been absolutely determined to make certain that the rich and large corporations not contribute one penny for deficit reduction, and that all of the sacrifice comes from the middle class and working families in terms of cuts in Social Security, Medicare, Medicaid, LIHEAP, community health centers, education, Head Start, nutrition, MILC, affordable housing and many other vitally important programs.

"I cannot support legislation like the Reid proposal which balances the budget on the backs of struggling Americans while not requiring one penny of sacrifice from the wealthiest people in our country. That is not only grotesquely immoral, it is bad economic policy."

I guarantee Obama will act mystified when Republicans run ads that the president cut Social Security and Medicare.

Democrats can no longer accuse Republicans of supporting to cut SS and Medicare cuts (by supporting the Paul Ryan plan) when they themselves made actual cuts to the budget. This is a huge political win for Republicans. The GOP got their ideological cuts and can attack Democrats for making cuts to their sacred cows of the Left. The Republicans always intended to raise the debt ceiling. They knew Obama was a horrible negotiator. The Republicans bluffed and won.

Rick Scott: Don't Raise the Debt Ceiling

Gov. Rick Scott is either pandering to the tea party or is absolutely clueless about the effects not raising the debt ceiling would have on Florida.

"The impact would be minimal," Scott said.

The markets have already started to panic about the debt ceiling not being raised.



Despite this Scott says the markets will be just fine.

"I don't think anybody knows, because it's never happened," he said. "I believe the markets understand where the federal government is. They understand where the spending is, so I think the market has already priced it in."

Several states will go broke without federal revenue. Scott's own internal report shows that health care services would be shutdown. There is uncertainty in what other Florida agencies would have to shutdown. Scott's solution is don't raise the debt ceiling.

Scott was thrown off in the CNN interview when it was pointed out to him the debt is not current spending but repayment previous borrowed money from past bills created by Congress. Scott also sticks to the talking points. When Scott is forced off the talking points he sounds clueless. Scott is so clueless that he is advocating that the United States breaks the 14th amendment and not pay its debt.



Update: Adam Weinstein has harsh words for Scott's appearance on CNN.

Scott's latest crusade is to argue against any rise in the federal debt ceiling—an issue in which he has no official say, and whose basic economic consequences he seems to grasp not one jot. (This week, Scott said Florida would see no effects from a US default; his opponent in last year's gubernatorial race, former state CFO Alex Sink, called his statement "clueless...That's Florida Budgeting 101.") The beleaguered guv took his case to CNN today, and managed to get himself yelled at by two anchors. At one point, Ali Velshi gave up. "Why is this difficult for you to understand, governor?"

Why the Boehner Debt Ceiling Plan Died

The Congressional Budget Office found that the John Boehner debt ceiling cut plan would only cut $890 billion from the budget from the budget from 2012 to 2021. The cuts aren't radical enough for Boehner to get his caucus behind it.

Relative to the adjusted March baseline, proposed budget authority would be $840 billionlower and outlays $710 billion lower over the 2012-2021 period. Relative to the January baseline, excluding funding for the wars in Iraq and Afghanistan and for similar activities, the proposed caps would lower budget authority by nearly $1.1 trillion and outlays by about $890 billion over the 2012-2021 period (see Table 1).

The one Republican that was behind it was Rep. Allen West. It had nothing to do with Milton Friedman economic theories.. House Majority Whip Kevin McCarthy showed the Republican caucus the Ben Affleck movie The Town. The scene that West made his decision on the future of America's private and public financial system was a scene of Affleck's and Jeremy Renner's characters talking about fucking up some local hoodlums.

Ben Affleck: I need your help. I can’t tell you what it is. You can never ask me about it later. And we’re going to hurt some people.

Jeremy Renner: Which car are we going to take?

Republicans aides told the Washington Post West's reaction to this inspiring message on economic policy.

After showing the clip, Rep. Allen West (R-Fla.), one of the most outspoken critics of leadership among the 87 freshmen, stood up to speak, according to GOP aides.

“I’m ready to drive the car,” West replied, surprising many Republicans by giving his full -throated support for the plan.

Words fail me.

Below is the CBO score of Boehner's plan.

House Budget Control Act

Standard and Poors Places United States on Credit Watch

Standard and Poors have placed several United States financial assets on negative credit watch placement. This means the United States will lose its AAA rating if it doesn't resolve the debt ceiling crisis. It also depends on how the debt ceiling is raised.

However, S&P has said it could move "even if a debt-reduction deal is met and the $14.29 trillion federal debt ceiling is raised. S&P has cited $4 trillion in debt reduction as a figure that would be appropriate for keeping the triple-A rating. S&P has also said it wants a credible agreement, meaning one that has bipartisan support."

Americans could have their homes foreclosed upon, if the Treasury Department cannot make bond payments for Fannie Mae or Freddie Mac. S&P has also place a negative credit watch on subsidized public housing and mortgage-backed securities. The federral government took more bad mortgages to bailout banks. This is many homeowners at potential risk.

Obama: Master Negotiator

This is the take it or leave it deal President Barack Obama is offering Republicans.

The White House is squarely backing a proposal by Majority Leader Harry Reid (D-NV) that would raise the debt limit through 2012 while making $2.7 trillion in spending cuts -- and providing no tax revenue.

The onus is now on Republicans to sign onto Reid's deal or continue to test the financial markets' stability as the clock runs down on the Aug. 2 deadline to raise the nation's borrowing limit or face default.

John Boehner offered Obama a $2 trillion deal with (don't laugh) that Republicans would down the road vote for tax increases. Obama took the deal. Boehner couldn't get his caucus to agree on sticking Obama on tax increases down the road. Any talk of raising taxes, even under a bargaining lie, was toxic to tea party Republicans. In the end: Obama negotiated a deal that gave Boehner more than what he asked for.

I'm sorry, but I have a hard time taking Obama seriously.

Futures Market Down

The futures market is taking a big dive. Wall Street is officially in panic mode. Congress needs to raise the debt ceiling ASAP.

Anwar Richardson School of Economics Award: Tim Pawlenty

Anwar Richardson School of Economics Award is given to people that make economic claims that have no basis in reality. The award is named after sports writer Anwar Richardson making up stories about Brett Farve becoming a Tampa Bay Buccaneer and the economic impact Farve would have on Tampa. Richardson wrote these stories without citing any sources.

Tim Pawlenty is getting plenty of attention for calling President Barack Obama a "chicken." Pawlenty played chicken when Candy Crowley pointed out that "cut, cap and balance" is not going to pass in the Senate. Pawlenty avoids answering what concessions he would make in order to get the debt ceiling raised.

CROWLEY: Sure, but where would you -- what I'm asking is where we -- I think we know what you would push for, where would you compromise? Because "cut, cap, and balance" is not passing the Senate. You have to come up with something. And so I guess my question is, where do you -- where's the give here, if there is? Because you have to get it passed the Senate and the Senate is controlled by Democrats?

PAWLENTY: Yes. Well, first, let's -- I do want to say, let's remember how we got here. President Obama took office with a $500 billion or so deficit, and he ran it up the deficit to $1.5 trillion -- excuse me, $1.5 trillion.

CROWLEY: Can I just interject that he inherited two wars. He inherited an ongoing prescription drug plan that was passed under the Bush administration, and a recession that went deeper and deeper.

Troop levels are down in Iraq. Obama has increased combat operations in Afghanistan. Obama also authorize the use of airstrikes in Libya. Three wars cost money. Best of all is Pawlenty dodges the question of how he would break the Congressional gridlock on raising the debt ceiling. For someone who is questioning the courage of the President, Pawlenty isn't displaying his own courage.

Pawlenty repeats the line that Obama inherited a $500 billion deficit from President Bush.

PAWLENTY: The two wars were taking place under President Bush at a larger level in Iraq. So, again, when President Bush left office there was a $500 billion deficit. Now it's about $1.5 trillion under President Obama's watch. He tripled the deficit of this country.

Actually, Obama inherited a $1.2 trillion deficit from Bush. From the CBO January 2009 report.

CBO projects that the deficit this year will total $1.2 trillion, or 8.3 percent of GDP. Enactment of an economic stimulus package would add to that deficit. In CBO’s baseline, the deficit for 2010 falls to 4.9 percent of GDP, still high by historical standards.

Pawlenty is off by $700 billion from the CBO deficit numbers. The fact that Pawlenty repeats this means it is a talking point. Pawlenty receives a Joy-Ann Reid Award for knowingly lying. I could buy Rick Santorum being too stupid to know the real deficit numbers. Pawlenty does not get that free pass.

Pawlenty's support for the "cut, cap and balance" bill shows how unserious he is. It is impossible to get a balance budget amendment into the Constitution before August 2nd. It doesn't matter to Pawlenty because he refuses to acknowledge reality.

Democratic Caucus Angry At the White House

The Obama team has handled their caucuses poorly since the beginning of their administration. President Barack Obama and his team not informing the Democratic caucuses that they made a deal with Republicans to extend the Bush tax cuts was a move that created bad blood. Sen. Diane Feinstein told CNN that she could not get a straight answer from Jacob Lew on the White House negotiations with Republicans on the debt ceiling.

"Are discussions going on or not?" she said. "We couldn't get an answer. Then you pick up the morning paper and all you see right-hand (side), above the fold, front page (is) about all these discussions going on. It's hard. It's hard."

The CNN article backs up previous reports that Democrats went ballistic on Lew. The White House fails to realize that Democrats still control the Senate. House Speaker John Boehner and Minority Leader Mitch McConnell have shown in the past that they cannot deliver their caucuses. Republicans place fear of the tea party over fiscal sanity. These Republicans figure their nay votes are safe because enough Democrats will pass vote to raise the debt ceiling. That is less likely with Obama offering entitlement cuts and no concessions from Republicans.

Benjamin Kirby offers this argument on Obama's strategy.

The president offered to cut Medicare and Social Security -- central tenets of Democratic policy and politics -- and yet the other side apparently doesn't have the capacity to accept a deal. I know progressive bloggers whose heads are exploding right now. They have totally turned on Obama and his supporters. From my view, it's about making a deal before we essentially destroy the republic.

Obama doesn't have to offer anything. Boehner and McConnell have made it clear that they intend to raise the debt ceiling. They know Wall Street will cut off campaign contributions to the GOP if the debt ceiling is not raised. There are enough Democrats and Republican Wall Street lackeys to raise the debt ceiling. Many Republicans will not vote to raise the debt ceiling once they know McConnell and Boehner have the votes. It doesn't matter as long as the debt ceiling is raised.

Obama is offering entitlement cuts because he is triangulating. I wrote that Obama extended the Bush tax cuts because he wanted to appeal to independent voters. If Obama really cared about the debt and budget deficit he would have never extended the tax cuts. This is why Obama isn't going after tax cuts for top earners. Obama is as unserious about the debt as Marco Rubio.