Markets Slump Over Debt Talks Stalemate

Reuters: “U.S. stock index futures fell sharply on Sunday as failure so far by the government to strike a deal on the debt ceiling made the prospect of default — once considered an impossible outcome — more likely.”

White House chief of staff Bill Daley told CBS News that global stock markets might have “a stressful few days” in the event that the Congress fails to agree on a plan by the end of Sunday.

Boehner Quietly Negotiating with Obama Again

Despite publicly calling off debt talks on Friday afternoon, ABC News reports that House Speaker John Boehner and President Obama “are once again having back-channel talks on a large-scale deficit reduction plan that would include cuts to entitlement programs and increases in tax revenues.”

“One source described the talks as Boehner and the president ‘footsie’ because the talks are indirect, and they are happening even as Boehner and the other Congressional leaders are attempting to negotiate a Plan B.”

Still No Deal

House Speaker John Boehner (R-OH) and the Senate Majority Leader Harry Reid (D-NV) “were preparing separate backup plans to raise the nation’s debt ceiling on Sunday, after the leaders were unable to end an increasingly grim standoff over the federal budget,” theNew York Times reports.

“The contours of Mr. Boehner’s backup plan were far from clear, but it seemed likely to take the form of a two-step process, with a short-term increase in the debt limit along with about $1 trillion in cuts, an amount the Republicans said was sufficient to clear the way for a debt limit increase through year’s end.”

Washington Post: “The Senate plan would add to the dizzying proliferation of debt-limit ideas, with just 10 days before the Treasury is due to run short of cash to pay the nation’s bills. But it is the simplest, by far: According to a Senate Democratic leadership aide, Reid will offer to cut spending by $2.5 trillion in exchange for an equal increase in the debt limit, meeting the dollar-for-dollar test Boehner laid down in early May.”

Mark Halperin: “It seems impossible for Democrats to give up on their insistence that any debt limit increase go through 2013. If they surrender on that — and (it is safe to assume at this point) they get no additional revenue to go with spending cuts — they will have allowed Republicans, who control only the House, to pretty much roll them on most everything.”


Echoes of 2004

Politico: “Unlike the 2000 caucuses, which boiled down to George W. Bush and an array of candidates jockeying to get to his right or the 2008 Iowa GOP campaign — where the race was destined to come down to Romney and an alternative — next year’s contest has no such clarity. If anything, the Iowa Republican contest of 2012 bears an uncanny resemblance to the 2004 Democratic contest here, with multiple candidates competing for different slices of the party vote and uncertainty likely to hang over the race well after the first frost has emerged on the corn stalks.”

Debt Talks Break Down Again

“Congressional talks dissolved in recrimination again Saturday night, as the latest proposal for cutting the deficit and raising the government’s debt limit hit a wall with 10 days left before the U.S. begins defaulting on its obligations,” the Wall Street Journal reports.

“House Speaker John Boehner (R-OH), hosted the leaders of both parties in his conference room at 5:30 p.m. in an attempt to resolve the impasse. The leaders were expected to issue a joint statement following the meeting, in part to reassure the markets. But no such statement was issued…”

The Washington Post notes that after the meeting, Reid issued a statement saying he was “deeply disappointed in the status of negotiations” and urging Republicans “to reconsider their intransigence.”

Said Reid: “Their unwillingness to compromise is pushing us to the brink of a default on the full faith and credit of the United States. We have run out of time for politics. Now is the time for cooperation.”

Reuters notes Congress “will struggle Sunday to hammer out a deficit deal and assure investors before Asian markets open that America can avert a catastrophic default and hold onto its prized credit rating.”


Pressure Grows for Wu to Resign

The Oregonian reports Rep. David Wu (D-OR) spoke briefly to House Minority Leader Nancy Pelosi today after a young woman claimed he initiated an “unwanted sexual encounter.”

“The substance of the conversation was not disclosed, but congressional sources familiar with the thinking and attitude of congressional leadership said it’s likely that Pelosi told Wu to resign and to step down soon.”

Boehner Wants Deal Before Asian Markets Open

House Speaker John Boehner (R-OH) told House Republican lawmakers that he ” wanted movement on the negotiations within the next 24 hours, before Asian markets open Sunday night U.S. time,” the Wall Street Journal reports.

“Boehner also said that he has not ruled out reaching an agreement that would reduce the deficit by between $3 trillion to $4 trillion over 10 years, the aide said, despite that he walked away Friday night from negotiations with Mr. Obama on an agreement of that size.”

Politico: “He acknowledged that he might not be able to get the details of a plan to all members by the time he makes an announcement tomorrow, but warned colleagues that they risk losing leverage in the negotiations if something isn’t enacted by Aug. 2.”

Ezra Klein: “Boehner is hoping to present a plan by then, but a plan is very different from a deal. A plan is something politicians can come up with. A deal, we’re increasingly finding, is something that we need the markets to force.”

Are Sane Leaders Really Best?

Out soon: A First-Rate Madness: Uncovering the Links Between Leadership and Mental Illness by Nassir Ghaemi.

The author tells the Washington Post that presidents “widely considered successful — such as Abraham Lincoln, Teddy Roosevelt and John F. Kennedy — suffered from mood disorders for most of their lives… In times of crisis, leaders with mood disorders were at an advantage rather than impaired, he writes. They were more resilient, more creative, more thoughtful, more empathetic and better able to endure times of intense stress.”

“Conversely, Ghaemi believes that George W. Bush and Tony Blair were failures as leaders because they were mentally healthy.”

Iowa Straw Poll Ballot Set

The Des Moines Register reports the official ballot for the Iowa straw poll “will list nine names, including three declared candidates who have decided to not compete in the Aug. 13 event: Mitt Romney, Jon Huntsman and Newt Gingrich.”

“It will exclude two candidates who are merely flirting with a bid: Rick Perry and Sarah Palin, the Republican Party of Iowa’s state central committee decided today.”

Republicans for Big Oil, Democrats for Big Banks

Jeffrey Sachs: “The idea that the Republicans are for the billionaires and the Democrats are for the common man is quaint but outdated. It’s more accurate to say that the Republicans are for Big Oil while the Democrats are for Big Banks. That has been the case since the modern Democratic Party was re-created by Bill Clinton and Robert Rubin.”

“America needs a third-party movement to break the hammerlock of the financial elites. Until that happens, the political class and the media conglomerates will continue to spew lies, American militarism will continue to destabilize a growing swath of the world, and the country will continue its economic decline.”


Threat of Mutiny Scuttled Debt Ceiling Deal

Wall Street Journal: “In seeking a big deficit-cutting deal, President Obama, the capital’s top Democrat, and John Boehner, its top Republican, were focused on their legacies and the next election. Many of their followers, however, wanted only to stick to what they saw as their parties’ basic principles. Each time their own followers pulled them down.”

The Los Angeles Times has the tick-tock of how the deal unraveled.

A Stealth Presidential Race

John Avlon profiles a new group, Americans Elect, “which has quietly collected enough signatures to secure a 2012 ballot line in eight states… the ballot position they’re securing isn’t for a specific platform, person, or ideology, but rather an entirely new way to elect a president.”

“Here’s how the group envisions it will work: An online convention will take place over a course of two weeks in June 2012. Any registered voter can participate as a delegate, after signing up securely at the newly launched AmericansElect.org. Through a series of interactive online questionnaires, they will be able to seek out potential candidates whose policy positions most closely resemble their own. A party platform will be determined and candidates drafted. A final field of six prospective nominees will then each select a running mate from a different party, with those options eventually winnowed down to a bipartisan ticket that will inherit the Americans Elect ballot line in, the organizers hope, all 50 states.”

Explore posts in the same categories: Candidates, National, Politics

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