Obama: seniors could be hurt without debt deal

WASHINGTON Tue Jul 12, 2011 6:45pm EDT

1 of 5. Storm clouds gather above the U.S. Capitol in Washington, July 11, 2011.

Credit: Reuters/Jonathan Ernst

WASHINGTON (Reuters) - President Barack Obama warned on Tuesday that elderly Americans could suffer first from a debt default, raising pressure on lawmakers as prospects for a deal to lift the debt ceiling appeared far from reach.

The president and congressional leaders met at the White House for the third time in as many days, working to break a logjam over taxes before August 2. when the U.S. Treasury says it will run out of money to pay all of the country's bills.

Earlier Senate Republican leader Mitch McConnell proposed a plan to allow a divided U.S. Congress to raise the U.S. debt ceiling while giving Republicans political cover.

Adding to heated rhetoric from both sides, McConnell said a "real solution" to the U.S. debt problem was unlikely while Obama was in office. The White House, responding to the comments, urged both sides to find common ground.

As politicians sparred, U.S. business leaders pressed Washington to act swiftly to raise the $14.3 trillion U.S. debt ceiling or risk derailing a sputtering economic recovery and endangering the global financial system.

Obama said in an interview with U.S. television network CBS before the meeting that checks to recipients of the Social Security retirement program may not go out in early August if he and congressional leaders do not agree on a debt deal.

"I cannot guarantee that those checks go out on August 3rd if we haven't resolved this issue," Obama said, according to excerpts of the interview released before its broadcast.

"There may simply not be the money in the coffers to do it," Obama said. He said veterans checks and disability benefits could also be affected without a deal.

Failure to seal a deal by August 2 could spook investors, causing U.S. interest rates to surge and stock prices to plummet, putting the United States at risk of another recession, Treasury officials and economists have warned.

Tuesday's talks lasted nearly two hours.

House of Representatives Speaker John Boehner, the top Republican in Congress, told Fox News that Obama's insistence on tax increases as part of the plan was holding up a deal.

Republicans have balked at raising the debt limit without steep spending cuts, while Democrats say new tax revenues need to be part of any deal. Republicans oppose any increase in taxes which they say would hurt the economy.

McConnell's complicated legislative maneuver would avert an imminent default and let Republicans wash their hands of the politically toxic issue.

Obama would formally request an increase in the $14.3 trillion debt ceiling, which Congress would reject through a "resolution of disapproval."

Obama would then veto that resolution and send it back to Congress. If Congress failed to muster the two-thirds vote needed to override a veto, the debt ceiling would effectively be lifted by the amount Obama had requested.

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Comments (104)
McBob08 wrote:
The Bush Tax Cuts didn’t help the economy, nor did it create jobs, so ending them will neither hurt the economy, nor destroy jobs. Rich people need to pay a fair share of the taxes — right now, the only revenue that the government is getting from the richest 2% is the taxes of the ethical Democratic ones that don’t rape the tax loopholes to save every last cent.

The deficit cannot be reduced without raising revenues — not selling off government assets, not raising taxes somewhere and lowering them somewhere else; only by drastically increasing the tax revenue being taken in by the government can fix the deficit.

Meanwhile, the money spent on Welfare, Medicare and Medicaid is minute compared to the massive amount of money being spent on Corporate Welfare — rich, successful companies, like the ones in the petroleum business, getting enormous government subsidies, on top of their own towering profits. Cut the budget and staff of the military by 60%, and cancel military contracts for things that no one wants, and you can easily pay off the deficit, and then some, and still have the ability to invade foreign nations for their oil.

The Democrats have given until it hurts already. Until the Republicans stop acting like spoiled children and start making serious concessions, they should have all their governmental perks suspended, and their finances audited by the IRS. They need to be shown that the American people mean business. Not the tiny minority that are Teabaggers, but real Americans, whose jobs are being sent overseas by the very rich people that the Republicans protect.

Jul 12, 2011 3:43am EDT  --  Report as abuse
PKFA wrote:
McBob08, some misunderstanding clarification:

The Obama stimulus package didn’t help the economy, nor did it create jobs; those wasted dollars are irrecoverable. All people need to reduce their dependence on Government — right now. The government has no revenue left over after politicians buy votes with wealth redistribution schemes.

The deficit cannot be reduced without reducing spending — not selling off government assets, not raising taxes somewhere and lowering them somewhere else; only drastically reducing unnecessary and wasteful Government programs can fix the deficit.

Meanwhile, the money spent on Defense, infrastructure and vital programs such as protecting the nation’s food and drug safety is minute compared to the massive amount of money being spent on entitlement programs, social and corporate, and the staff to administer them. Cut the budget and staff of the government by 60%, redeploy Government workers to jobs that actually produce something and you can easily pay off the deficit, and then some, and still have the ability to take proper care of the truly poor and needy.

The newly elected members of Congress have seen no concession from the old guard, Democrat or Republican. Until the incumbents stop acting like spoiled children and start making serious concessions, they should have all their governmental perks suspended, and their finances audited by the IRS. They need to be shown that the American people mean business. Not just the tiny vocal minority, but real Americans: producers whose hard-earned dollars are being confiscated by the looters and the moochers.

Jul 12, 2011 8:52am EDT  --  Report as abuse
bck555 wrote:
@PKFA – Great post! I might add a counter however to McBob08. The Bush tax cuts stimulated our economy after 9/11 significantly. You might check and see that unemployment was around 4-5%. About half of what it is today. The economy started its tanking however around June of 08 when the housing bubble began to pop and when BO was nominated by his party. The BO effect is continuing.

Jul 12, 2011 9:32am EDT  --  Report as abuse
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