Ares
14th July 2011, 12:58 PM
U.S. can’t extend debt ceiling deadline, Geithner says
Briefing reporters just hours ahead of the latest round of debt-ceiling talks, White House press secretary Jay Carney said the Obama administration made clear in talks on Wednesday that there are “significant cuts, $1.5 trillion in cuts, that everybody can agree on.”
He added there are an extra $200 billion in cuts that the White House believes everybody can agree on. “That’s $1.7 trillion, significant in and of itself,” Carney said.
Obama and congressional leaders are scheduled to meet again on Thursday afternoon. Obama is calling for a Friday deadline about whether the parties can reach a broad budget agreement, according to published reports.
Leaders of both parties made fresh calls for action Thursday morning as they prepared for the afternoon talks at the White House. But Republicans and Democrats were still at odds, at least in public, over deficit-reduction goals and how to achieve them.
Tensions were still simmering Thursday after Wednesday’s White House meeting reportedly ended after a testy exchange between House Republican Leader Eric Cantor and Obama.
“House Majority Leader Eric Cantor has shown that he shouldn’t even be at the table,” Senate Democratic Leader Harry Reid said on the Senate floor Thursday morning.
Cantor for the first time told Obama he was wiling to accept a smaller package of spending cuts and pass a short-term debt-limit extension, according to The Wall Street Journal. But Obama rejected the idea.
Meanwhile, Senate Republican Leader Mitch McConnell renewed his call for a balanced budget amendment in remarks on the Senate floor, saying, “It’s time to change this debate altogether.”
But with the Obama administration urging Congress to raise the debt ceiling by Aug. 2 or face default on obligations, Democrats were showing no appetite for shifting the terms of the debate.
“If we allow this nation for the first time in its history to default on our national obligations, it will be not only a black mark on our reputation but also a massive financial disaster that will sweep the world into global depression,” Reid said Thursday.
Reid spoke a day after Moody’s Investors Service said it put the U.S. government’s triple-A bond rating on review for possible default because it fears “a small but rising risk” of a short-lived default.
Obama, McConnell, Reid and others are set to meet at the White House at 4:15 p.m. Eastern on Thursday. Cantor and House Speaker John Boehner are also part of the negotiating group.
Republicans have insisted that they’ll vote to raise the $14.3 trillion debt ceiling only if the size of the increase is matched with spending cuts and no tax increases. That’s put them at odds with Obama and congressional Democrats, who say some tax hikes are needed to help shrink deficits.
Both sides say they want to avoid default and pressure is intense on lawmakers and the White House to avoid it.
Fed Chairman Ben Bernanke warned Congress again on Thursday to raise the debt ceiling as part of a “strong, credible” debt deal, with action coming “the sooner the better.” Also Thursday, J.P. Morgan Chase & Co. Chief Executive Jamie Dimon said: “No one can tell me with certainty a U.S. default wouldn’t cause catastrophe and wouldn’t severely damage the U.S. or global economy.”
As lawmakers and the White House haggle over a debt deal, the cost of insuring $10 million of U.S. debt against default for one year has climbed to $60,000 as of Thursday from $15,000 at the beginning of May, according to data provider Markit.
But the bond market has been little impacted, with yields on 10-year Treasurys remaining below 3%. Read Bond Report.
Speaking to the Senate Banking Committee, Bernanke also questioned an argument from some members of Congress that Treasury could prioritize payments and avoid a default on Treasurys if the debt ceiling is not raised.
“Whether default is on securities or on payments we owe to Medicare recipients it is going to constitute a default of some type” and it will certainly have an impact on foreign investor confidence, the Fed chairman said.
http://www.marketwatch.com/story/debt-talks-to-resume-after-testy-exchanges-2011-07-14?dist=countdown
Briefing reporters just hours ahead of the latest round of debt-ceiling talks, White House press secretary Jay Carney said the Obama administration made clear in talks on Wednesday that there are “significant cuts, $1.5 trillion in cuts, that everybody can agree on.”
He added there are an extra $200 billion in cuts that the White House believes everybody can agree on. “That’s $1.7 trillion, significant in and of itself,” Carney said.
Obama and congressional leaders are scheduled to meet again on Thursday afternoon. Obama is calling for a Friday deadline about whether the parties can reach a broad budget agreement, according to published reports.
Leaders of both parties made fresh calls for action Thursday morning as they prepared for the afternoon talks at the White House. But Republicans and Democrats were still at odds, at least in public, over deficit-reduction goals and how to achieve them.
Tensions were still simmering Thursday after Wednesday’s White House meeting reportedly ended after a testy exchange between House Republican Leader Eric Cantor and Obama.
“House Majority Leader Eric Cantor has shown that he shouldn’t even be at the table,” Senate Democratic Leader Harry Reid said on the Senate floor Thursday morning.
Cantor for the first time told Obama he was wiling to accept a smaller package of spending cuts and pass a short-term debt-limit extension, according to The Wall Street Journal. But Obama rejected the idea.
Meanwhile, Senate Republican Leader Mitch McConnell renewed his call for a balanced budget amendment in remarks on the Senate floor, saying, “It’s time to change this debate altogether.”
But with the Obama administration urging Congress to raise the debt ceiling by Aug. 2 or face default on obligations, Democrats were showing no appetite for shifting the terms of the debate.
“If we allow this nation for the first time in its history to default on our national obligations, it will be not only a black mark on our reputation but also a massive financial disaster that will sweep the world into global depression,” Reid said Thursday.
Reid spoke a day after Moody’s Investors Service said it put the U.S. government’s triple-A bond rating on review for possible default because it fears “a small but rising risk” of a short-lived default.
Obama, McConnell, Reid and others are set to meet at the White House at 4:15 p.m. Eastern on Thursday. Cantor and House Speaker John Boehner are also part of the negotiating group.
Republicans have insisted that they’ll vote to raise the $14.3 trillion debt ceiling only if the size of the increase is matched with spending cuts and no tax increases. That’s put them at odds with Obama and congressional Democrats, who say some tax hikes are needed to help shrink deficits.
Both sides say they want to avoid default and pressure is intense on lawmakers and the White House to avoid it.
Fed Chairman Ben Bernanke warned Congress again on Thursday to raise the debt ceiling as part of a “strong, credible” debt deal, with action coming “the sooner the better.” Also Thursday, J.P. Morgan Chase & Co. Chief Executive Jamie Dimon said: “No one can tell me with certainty a U.S. default wouldn’t cause catastrophe and wouldn’t severely damage the U.S. or global economy.”
As lawmakers and the White House haggle over a debt deal, the cost of insuring $10 million of U.S. debt against default for one year has climbed to $60,000 as of Thursday from $15,000 at the beginning of May, according to data provider Markit.
But the bond market has been little impacted, with yields on 10-year Treasurys remaining below 3%. Read Bond Report.
Speaking to the Senate Banking Committee, Bernanke also questioned an argument from some members of Congress that Treasury could prioritize payments and avoid a default on Treasurys if the debt ceiling is not raised.
“Whether default is on securities or on payments we owe to Medicare recipients it is going to constitute a default of some type” and it will certainly have an impact on foreign investor confidence, the Fed chairman said.
http://www.marketwatch.com/story/debt-talks-to-resume-after-testy-exchanges-2011-07-14?dist=countdown