President Obama called on Congress to move quickly on lifting the debt ceiling Friday as the August 2 deadline rapidly approaches.
With only a few days left before the date that the Treasury Department has said the U.S. risks defaulting on some of its debt obligations, Obama described the moves underway in Congress.
“Right now, the House of Representatives is still trying to pass a bill that a majority of Republicans and Democrats in the Senate have already said they won’t vote for,” he said. “It’s a plan that would force us to re-live this crisis in just a few short months, holding our economy captive to Washington politics once again. In other words, it does not solve the problem, and it has no chance of becoming law.”
House Speaker John Boehner, R-Ohio, struggled to round up enough votes to pass a bill within the House Republican caucus that would raise the debt ceiling in two increments, but was forced to call off the vote Thursday night. He has reportedly revised the bill Friday to attract more conservatives by adding the requirement that a balanced budget amendment be passed by Congress before a second hike in the debt ceiling can be approved. If Boehner is able to get the House to pass the bill, it is not expected to be approved by the Senate, but it would strengthen his bargaining position in the negotiations that are expected to take place throughout the weekend.
Meanwhile, Senate Majority Leader Harry Reid, D-Nev., said Friday he would be introducing his own plan and invited Senate Minority Leader Mitch McConnell, R-Ken., to negotiate a deal with him on the plan. However, McConnell said that Democrats should accept Boehner’s plan.
Obama insisted the two sides need to work together. “What’s clear now is that any solution to avoid default must be bipartisan,” he said. “It must have the support of both parties that were sent here to represent the American people—not just one faction. It will have to have the support of both the House and the Senate. And there are multiple ways to resolve this problem. Senator Reid, a Democrat, has introduced a plan in the Senate that contains cuts agreed upon by both parties. Senator McConnell, a Republican, offered a solution that could get us through this. There are plenty of modifications we can make to either of these plans in order to get them passed through both the House and the Senate and would allow me to sign them into law. And today I urge Democrats and Republicans in the Senate to find common ground on a plan that can get support—that can get support from both parties in the House—a plan that I can sign by Tuesday.”
The current plans on the table do not include provisions for tax increases, although some of the earlier plans that have been floated, including one by the so-called Gang of Six, did include several tax proposals. CCH has released a tax briefing guide to the tax ramifications of the debt limit showdown here.
Obama said that if the country loses its AAA credit rating, the effect would be like a tax increase. "And make no mistake—for those who say they oppose tax increases on anyone, a lower credit rating would result potentially in a tax increase on everyone in the form of higher interest rates on their mortgages, their car loans, their credit cards. And that’s inexcusable."
He urged people to contact their congressional representatives, as he did during a speech on Monday night. The switchboards have reportedly been at high volume this week at the Capitol, so Obama asked people to also use email and Twitter.
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