Boehner Just Took Debt Ceiling Negotiations Back Five Steps, Calls Obama's Request "Blank Check", Invokes Visions Of Hank Paulson

Tyler Durden's picture

In a posting on his blog, Boehner just managed to snag any progress in the debt ceiling negotiation, saying that the president "is trying to set up a no-win situation for taxpayers: either he gets his $2.4 trillion blank check, or America defaults", generatinged much despised PTSD visions of Hank Paulson' staccato threats in Congress, and in doing so making any compromise he may have been pursuing with the Tea Party virtually impossibly and certainly nearly unpracticable with just 3 days before the absolute legal deadline this Thursday. Perhaps that is just the reason why bonds suddenly ripped. Remember: bonds will be bought if sendng is curtailed and no incremental debt will be layered... to a point. Should the US default, buying will turn to selling, first very slowly, then very fast.

Treasury response to blog post:

From Boehner's full blog post:

Common-Sense GOP Effort Will Prevent Job-Crushing Default & Deny President Obama a $2.4 Trillion Blank Check

Today, House Republican leaders will discuss with lawmakers a new framework designed to prevent a national default while ensuring any debt limit increase granted to President Obama includes spending reforms and cuts that exceed the debt limit hike.  This common-sense plan is aimed at stopping President Obama’s indefensible quest for a debt limit increase that would run past the next election without a process in place to ensure spending is being cut as the debt ceiling is being raised.  As Speaker Boehner said yesterday on FOX News Sunday, “I know the president's worried about his next election.  But my God, shouldn't we be worried about the country?”

President Obama desperately wants a large debt limit increase that will take him past the next presidential election.

  • The president is demanding a $2.4 trillion debt limit increase all at once – without spending cuts that exceed the hike – and refusing to accept a two-stage process that would ensure government spending continues to be cut as the debt ceiling is raised.  Treasury Secretary Tim Geithner went on the Sunday shows yesterday to “insist” that any agreement “remove the possibility of a default from the politically heated presidential campaign season.”
  • As Majority Leader Cantor said yesterday, the president's stance is purely political, and indefensible.  “He cannot sustain or defend putting politics above the country’s interests in this situation,” Leader Cantor added.

Granting the president's request would amount to giving the president a $2.4 trillion blank check he can use to continue the spending binge that has driven our nation to the brink of a job-destroying downgrade and default.

  • The president has made it pretty clear he sees this debate as inconvenient compared to his desire to create more ‘stimulus’ programs.  “I’d rather be talking about stuff that everybody welcomes – like new programs,” he said at a recent press conference.
  • He is trying to set up a no-win situation for taxpayers: either he gets his $2.4 trillion blank check, or America defaults.

Speaker Boehner and Congressional Republicans have been clear that to pass the House, any debt limit increase must be accompanied by spending cuts that exceed the amount of the debt limit hike.

  • The American people overwhelmingly support this principle of “cut more than you hike.”  According to a recent CNN survey, 66 percent of Americans would only support an increase in the debt limit if “substantial spending cuts and caps on future spending were approved.” This is in addition to a Resurgent Republic survey that found Americans only support raising the debt limit “in exchange for substantial spending cuts and a commitment to reduce the deficit.”
  • More than 150 economists have backed “cut more than you hike,” stating on June 1 that “an increase in the national debt limit that is not accompanied by significant spending cuts and budget reforms to address our government’s spending addiction will harm private-sector job creation in America.  It is critical that any debt limit legislation enacted by Congress include spending cuts and reforms that are greater than the accompanying increase in debt authority being granted to the president.”
  • Columnist Charles Krauthammer has called the “cut more than you hike” approach a “thing of beauty,” “eminently logical and easy to understand,” and “difficult for the president to refuse.”

Republicans have also been steadfast in calling for strict spending caps to control future spending, and a balanced budget amendment to the Constitution requiring Washington to stop spending money we don’t have.

  • In stark contrast to President Obama’s politically-motivated request for a blank check, Republicans are committed to keeping spending in check this year, next year, the year after that, and so forth.  That means implementing real spending cuts and reforms, like a Balanced Budget Amendment.  “I continue to believe that a Balanced Budget Amendment is the greatest enforcement mechanism to bring Washington spending under control,” Speaker Boehner said yesterday.

Congress can deny President Obama a blank check and protect the American people by passing legislation to prevent a default that is consistent with the principles of the Cut, Cap, & Balance plan that passed the House with bipartisan support.

  • Congressional leaders worked through the weekend in an effort to forge such a solution, and plan to move it through Congress this week to cut spending and prevent a national default that would destroy more American jobs.

The American people are still asking the question: ‘where are the jobs?’  And they know Washington’s spending binge is part of the problem.

  • For its part, the Obama Administration maintains the economy is “absolutely” improving when it clearly is not.  What’s more, a new report has surfaced that the White House’s latest effort to win over employers “has gone cold.”  These are just more indications why we need to deny President Obama a $2.4 trillion blank check.
  • For the sake of our economy and our future, we need to stop spending money we don’t have and start creating a better environment for long-term job growth.  Cutting spending and preventing a national default will prevent more American jobs from being destroyed.

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mynhair's picture

Oweblahma is a simple idiotologue, and you can't fix stupid.

redpill's picture

The president has made it pretty clear he sees this debate as inconvenient compared to his desire to create more ‘stimulus’ programs.  “I’d rather be talking about stuff that everybody welcomes – like new programs,” he said at a recent press conference.

 

Everybody welcomes?  Fuck you, sir!

StychoKiller's picture

Demz Republicons iz doin' dis cuz Obama is black and dey is racis!

How Obama goin' pay my mo'gage wif no muny??

</sarc>

TruthInSunshine's picture

Defcon 2, bitchez!

Boner pulls out the Hank the Squid Paulson "give us we want, for me, Goldman Sachs & House of Morgue, or we'll tank your 401(k)s/IRAs/Retirement Accounts into oblivion, bitches" card, and uses it to double down against Obama, bitchez!

cosmictrainwreck's picture

excellent portrait........ dear ol' Hank, just as I remember him <tosses breakfast>

SheepDog-One's picture

Theyre just setting up to seize all 401K's pensions and retirements anyway thats the whole goal of all of this. $5 trillion bucks....theyre not just going to leave that sitting out there all fattened up in the ETF's theyve been pumping all along. Shearing time is very near, america.

LeBalance's picture

the teary-eyed Tammy Faye Boehner sez: "It was a complete surprise to me.  We never saw it coming, even though I've been doing lines and strippers here in DC since 1990.  Please, everyone remain calm, we can get out of this if everyone pitches in.  And by pitching in, I mean its law now and you did.  Thanks!"

Bananamerican's picture

"and in doing so making any compromise he may have been pursuing with the Tea Party virtually impossibly and certainly nearly unpracticable" (sic)

can the next upgrade include a grammar checker?

monkeyboy's picture

I would like a $2.4 trillion blank check.

 

 

LeBalance's picture

If your name is Mervyn, you got it.

Version 7's picture

To default or not to default, to default or not to default, to default or not to default..

johny2's picture

default and jail the corrupt politicians and their paymasters. 

Tortfeasor's picture

For the love of pete, spellcheck please

lizzy36's picture

Neither the GOP nor the democrats have a jobs plan.

The fact that both parties keep using the euphemism of "jobs" as a legitimacy for there economic policies should make everyone realize that the US as we all know it, was RIP'd this weekend. May take a couple of years for all to realize but essentially it is too broke to fix. Time for a reboot.

In the mean time #BTFD. Because as well all know there is no bad news just a buying opportunity.

hedgeless_horseman's picture

“I’d rather be talking about stuff that everybody welcomes – like new programs,” he said at a recent press conference.

Everybody?  Really?  I, for one, do not welcome new programs, nor do I care much for most of the old programs.

 

earnulf's picture

My God, the political BS!   Polls say this, Polls say that, I thought that our "elected" representatives were capable of rational, reasoned thought on their own?     The (R) side of the asile is digging in, blasting the lack of cuts in spending while saying not a thing about thier own stance on taxes.    Not to say the (D) side is blameless, but this is a (R) story, let's stick with that for the moment.     The fact is that our debt is such that every man, woman and child currently owes over 46K apiece.  For a family of four, that's a debt of 184K when the average household income is...wait for it....$46K per year.   So each family of four would have to devote their entire household income for FOUR years to pay off the debt, while living on nothing in the meantime.

The debate is over.   Default.   Live within your means like the rest of the populace.    Congress gets put on SS, not their golden retirement program.    We cannot afford the life our politicans lead.

CrashisOptimistic's picture

rasmussenreports.com has a daily telephone poll that tracks Presidential Approval.

They have pretty good methodology.  Their measure is Strongly Approve minus Strongly Disapprove.  

It stands at -21%.  Overwhelming disapproval.

weinerdog43's picture

"They have pretty good methodology"

No. They. Do. Not.  In fact, Rasmussen is hacktackular.  They are the most consistently wrong pollster operating. 

Look, nobody likes Barry, but he still polls better than anyone in the idiot party. 

pazmaker's picture

yes them wascally wepublicans!!  it's all their fault!!!   Get your head out of your ass and realize the red team and blue team are on the same side.....and it it's not your side!

SheepDog-One's picture

One thing is CERTAIN, there will definitely not be free pallets of money air dropped over Wall St from Stratolifters this time around. 

No free ongoing prime rib and lobster all you can eat buffet, baloney sandwiches from here on out for markets. The big party is over.

JuicedGamma's picture

Bonds flying. TBT getting crushed.  Hope everyone has jumped off before the train plows into the end of the line.

Jim in MN's picture

What, Geithner on his knees doesn't cut no ice with Boehner?

It worked for Paulson with Pelosi....and hey, isn't that little ol' Financial Armageddon thing a major trigger for all this here borrowing?  Wasn't that a Republican Super Emergency?

Really.  Plenty of shame yet no humility.

nonclaim's picture

Can you imagine Geithner giving the Paulson speech and being just as effective, bazooka and all?

No way! Geithner does not have the physical stature to demand anything...

On the other hand, had it been Geithner then and failed to get the money we would probably be in much better shape now.

the not so mighty maximiza's picture

this boner means business.

Lord Welligton's picture

The president is demanding a $2.4 trillion debt limit increase all at once

Isn't Boehner correct here? There's no need to have it all at once. The "situation" could be saved by allowing a $500bn raise. Obama wants to get to the end of his term without having to come back and ask for more. Anybody got money on Obama dropping out of the 2012 race?

SRV - ES339's picture

Funny how Boner was fine raising the limit every year for Bush without the Kabuki Theater... but of course all the good little TP sheeple will fall in line in support of holding the country hostage to gut social programs in order to pay bills that have already been approved by congress.

r101958's picture

Slightly different situation right at the present.....wouldn't ya say?

SRV - ES339's picture

Only because Boehner is being played by the TP... you can see it in his face, he has lost any influence (if he had any).

V in PA's picture

Not if you're blinded by a hatred for Bush and all things GOP. Isn't that right SRV?

SRV - ES339's picture

Absolutely not... without the TP, the GOP has some fine ideas.

As for Bush... he was a disaster but that's yesterdays news.

weinerdog43's picture

How about answering the question? 

CrashisOptimistic's picture

Bills that have already been approved by Congress are like a service contract on your fridge.

It can be cancelled at any time.

In contrast to this is borrowed money.  That's a loan.  If you do not service a loan, that's a default.

A cancelled service contract is not a default.  Pay the cancellation fee and move on.  A failed debt payment is a default, and only a failed debt payment is a default.

 

V in PA's picture

I got this one SRV.

But what about the kids and teachers?? The police and firefighters!?! Grandma!!!!! Are you willing to let grandma die, while your daughter goes without an education because we can't hire teachers. Just $2.4 trillion more and everything will be alright.

I blame the TEA party or TP sheeple.

SRV - ES339's picture

Have your fun, thump your TP chest while you can... keep going after teachers, fire fighters, granny, and social programs then go to the people in 2012... I'm thinkin' about some good old (Wisconsin like) buyers remorse!

weinerdog43's picture

Then how do explain all the "Recall Walker" stickers I see everywhere?