US debt limit deal – live

A deal on raising the US debt limit has been struck – but will it hold up in Congress? Follow the negotiations and votes live 3.43pm: Boehner now speaking, flanked by Eric Cantor and his posse. Talking up the deal, Boehner says: “It gives us the best shot, in the 20 years I’ve been here, to build support for a balanced budget amendment.” Hmm, that’s not exactly shouting from the rooftops. “The House will vote on a measure today that although not perfect will begin to change the culture of Congress,” says Cantor. “I’ve said the bill is not perfect, and it’s not.” The big win, according to Cantor, is that there are no tax hikes in the deal. Now Jeb Hensarling, the number four in the GOP House leadership, is talking up the balanced budget amendment as well. 3.37pm: Still waiting on John Boehner to appear at his press conference. There are reports that he has told ABC News anchor Diane Sawyer that he has the votes to pass the deal. Nate Silver is now forecasting a comfortable margin of victory, 258-173, in the House. 3.30pm: A gropup of protesters have been expelled from the gallery of the House chamber by the Capitol police, with chants about raising taxes. 3.25pm: “This bill is a baby that only a mother could love,” says Peter Welch, a Democratic representative, on cable news. What’s that old JFK quote? “Victory has a thousand fathers; defeat is an orphan.” 3.20pm: House vote on debt ceiling could be nail-biter, according to USA Today : As groups on the political left and right urge “no” votes on the proposal, meetings are being held to get the rank-and-file of both parties behind the deal reached Sunday night between President Obama and congressional leaders. Asked if Boehner has the votes yet, freshman GOP Rep Tom Reed of New York said: “We’ll know over the next two to three hours.” 3.15pm: It’s a nervous time in the House of Representatives right now, says MSNBC’s Chuck Todd : Lots of nervousness about this House vote right now; A tad bit of finger-pointing between two sides about who needs to fill in gaps for 216 On Fox News, commentators are getting nervous about the automatic triggers that cut spending – especially from military spending – if there’s no agreement by the “super committeee” on savings. 3.08pm: Obama for America has distributed this video from the president to its supporters. In it, Obama talks about the “cloud of uncertainty” over the economy as a result of the debt ceiling limit. 3pm: Should we all relax? Uber-blogger Nate Silver now reckons the deal will pass the House by 227-204, with a caveat : Bottom line: if Pelosi whips votes for bill, almost 100% certain to pass. If she leaves Dems to own devices, maybe a 60/40 favorite. Or Pelosi could whip votes against, in which case passage is unlikely. She has a LOT of power. But not clear what her endgame is. Meaning if Nancy Pelosi aggresively lobbys Democrats against the deal, it might fail. 2.50pm: Two of the hardline Tea Party favourites in the House, Republican representatives Jason Chaffetz of Utah and Jeff Duncan of South Carolina, tell ABC News they are voting no: Chaffetz told us that he “can’t support it,” while Duncan said his “analysis of the plan is something I can’t support.” Significantly, Chaffetz says he thinks the bill will pass the House. 2.40pm: Republican presidential front-runner Mitt Romney weighs in and he’s against the deal: While I appreciate the extraordinarily difficult situation President Obama’s lack of leadership has placed Republican Members of Congress in, I personally cannot support this deal. You want a Republican weather-vane, there it is. 2.37pm: Nancy Pelosi, Democratic minority leader in the House, asked if there are enough votes to pass the deal: “You’ll have to ask the Speaker. He has the majority.” Ouch. 2.25pm: Here’s a bad sign: House Speaker John Boehner was going to hold a press conference sometime after 1pm. It got delayed and delayed, and now it’s supposed to happen at 3.30pm. Why the delay? Maybe Boehner realised he was going to miss his sunbed tanning session. More likely, he hasn’t got the votes and needs the time to do some Republican arm-twisting. 2.15pm: The best short analysis of the debt deal cuts themsleves that I’ve seen has come from Josh Barro at the Manhattan Institute: The deal includes a lot of spending cuts, but it’s important to understand how backloaded these cuts are. The headline figure is $2.5 trillion in cuts over ten years, but less than 1 percent of those cuts will come in FY 2012. The near-term fiscal changes are so small that they will matter very little for the economy. The long term changes will be subject to revision by future Congresses and will hopefully come when the economy is healthier—and the parts that do go into effect will probably not be that different from whatever fiscal adjustment we were going to have to enact sooner or later. There are two parts of the spending cuts in this package that really do matter. One is the cuts that will apply in Fiscal Year 2012. There probably won’t be very big; there will be $22 billion in spending cuts compared to the baseline for 2012, or about 0.15 percent of GDP. (That’s out of the $1 trillion in cuts that will be agreed upfront.) A “Super Committee” will be charged with finding a further $1.5 trillion in deficit reduction, and we can expect that the cuts it recommends will again be backloaded. (Indeed, if the Super Committee deadlocks, we will go to an automatic “trigger” process which involves no cuts at all until FY 2013). Discretionary spending cuts that come out of the Super Committee process will again be subject to the whims of future Congresses. Any changes to mandatory spending that come out of the Super Committee are more likely to be sticky — that’s the second part of the cuts that matters — but I’ll believe we’re getting meaningful entitlement reform when I see it. Barro concludes: “So, liberals who are upset that this deal is destimulative, or who expect it to tank the economy, are off base.” 1.54pm: Yikes: Nate Silver has just tweeted : My latest extrapolation from @thehill ‘s whip count: R’s approve 153-87, D’s against 59-132, bill FAILS 212-219. Blimey. Excuse me while I call my stockbroker. And if anyone from the accounts department is reading this, I’d like to be paid in Swiss francs from now on. 1.42pm: Nate Silver of the New York Times’s FiveThirtyEight blog is trying to talk Paul Krugman down from the ledge: If Democrats read the fine print on the debt deal struck by President Obama and Congressional leaders, they’ll find that it’s a little better than it appears at first glance. That’s not to say that the deal is a good one for them. It concedes a lot to Republicans, and Democrats may be wondering why any of this was necessary in the first place. But the good news, relatively speaking, has to do with the timing and structure of the spending cuts contained in the deal. First, the timing: the cuts are heavily back-loaded, so the deal is unlikely to have much direct effect on the economy in 2012. That’s what I said last night. 1.31pm: Dean Baker, a Guardian contributor and a director of the Centre for Economic and Policy Research , has a strong attack on the debt deal from the left: At a time when growth has slowed to a near halt and unemployment rate is again rising, it is tragic that the nation’s political leadership has spent the last few months crafting a deal that is likely to slow growth further and take away supports from the people who have been hit hardest by the downturn. 1.26pm: Guess which Republicans are opposing the deal? Bill Kristol of the Weekly Standard and David Frum, the former Bush speechwriter. According to TP Carney , the Republican uberhawks like Frum and Kristol (neocons, if you will) really don’t like the proposed cuts on military spending: Assuming this debt deal becomes law and its super-committee is formed, defense cuts could create serious divisions on the right. The Tea Party generally rates budget cuts above the need for military spending, so its easy to see why there might be tension between the two camps. 1.20pm: The Hill is running updated whip counts [warning: contains toxic levels of politics geekery] on the vote in the House and Senate: The debt-limit deal announced on Sunday night is expected to attract more than 60 votes in the Senate, but its outlook in the House is much more cloudy. Speaker John Boehner will need Democratic votes to clear the bill through the lower chamber. How many remains unclear. It doesn’t really matter since there will be enough Democratic votes in play to pass the deal, unless the House Republicans have a full-blown civil war. Which would be entertaining but unlikely. 1.10pm: There’s a House rules committee meeting going on now that will decide the timeline for the vote on the deal. There’s a suggestion that the House will vote at 6pm this evening, and that the Senate will have to vote tomorrow, unless Harry Reid can get unanimous consent to hold the vote tonight. All it takes is one senator to say no and we wait another day. (I’m looking at you, Rand Paul.) 1pm: Here’s the current state of US politics: influential liberal bastion MoveOn.org is against the debt deal. Also: influential conservative bastion the Club for Growth is against it. Both are advising “no” votes. In conclusion: Um. 12.44pm: With DeMint saying he won’t try and block the deal in the Senate, satirical radio personality Rush Limbaugh appears to be on the same page. On his radio show today, it’s reported that Limbaugh announced: I don’t know the budget battle has been won. I’m undecided about it. Rush Limbaugh doesn’t have an opinion on something. In other news, September will be composed entirely of Sundays. 12.38pm: Here we go: the godfather of the Tea Party, Republican Senator Jim DeMint, says : “I’m not going to filibuster.” That’s significant. Jim DeMint is a hugely significant figure on the US right/Tea Party faction, far more than the likes of Sarah Palin. If DeMint is not trying to block the deal, then it’ll pass the Senate, and it means that enough of the Republican head-bangers in the House will also vote for it. So, it’s a done deal. 12.32pm: White House press secretary Jay Carney has held a briefing for the media, and was mainly concerned with defending the deal. He says its not true that the White House or Democrats got “nothing” from the deal. Carney says the White House “fully expects” that new tax revenue can be added to the deficit reduction plan drawn up by the “super committee” created as part of the debt limit deal. Let’s wait and see who the Republicans appoint on their side of the committee. Rand Paul? Jim DeMint? 12.24pm: Is there a Democratic revolt in the House? Maybe. Reuters reports that Democratic minority leader Nancy Pelosi says she’s undecided on voting for debt limit bill, saying she’s concerned about lack of new revenues. Pelosi runs a tight ship: if she’s “undecided” that gives carte blanche to Dems in the House to vote against it. Interesting. 12.12pm: Paul Krugman joins hands (sort of) with his opponents in the Tea Party and says he would vote to blow up the US Treasury . In a blogpost entitled “If I were in the House”, Krugman writes: “Sure, it’s risky. But the whole situation is immensely risky, thanks to the extremism and bloody-mindedness of the right.” Here’s the guts of his post – read the rest of it here : I guess I have to be explicit at this point: yes, I would vote no. What about the catastrophe that would result? Several thoughts. First, what I keep hearing from people who should know is that Treasury won’t actually run out of cash tomorrow, that it still has a few more days. Second, the people who claim that terrible things would immediately happen in the markets also claimed that there would be a big relief rally once a deal was struck. Not so much: the Dow is down 121 right now. Third, the idea that a temporary disruption would permanently damage faith in US institutions now seems moot; if you haven’t already lost faith in US institutions, you’re not paying attention. As a political columnist, Paul Krugman makes a great trade economist. 12.05pm: How much will the current debt deal actually save? According to the Congressional Budget Office, it will cut deficits by $2.1tn over 10 years. Of that, the CBO says $917bn in deficit reduction comes from caps on discretionary spending, with $1.2tn more from either the “super committee” savings or the automatic spending reductions – the triggers – that come into effect if the super committee fails. All the wonky details in PDF format here . Preamble: So there’s a deal on raising the US debt ceiling . The deal, struck between the White House, Democratic and Republican leadership in Congress, will now have to be passed through the House of Representatives and the Senate before the deadline of 2 August after which the US Treasury predicts that the $14.3tn limit on government borrowing will be hit. As deals go, this is one in which neither party seems happy with the outcome . In both the Democratic and Republican party their are wings that remain deeply unhappy with the result – and all eyes are now on them as the deal moves from smoke-filled rooms to the chambers of Congress. Will the Republican right – the Tea Party-inspired, the fiscal hardliners, the swivel-eyed – continue to fight against the deal and demand more? Will the Democratic party’s left say enough is enough and revolt when it comes time to vote. Meanwhile, the details of the detail remain frighteningly vague – beyond the comprehension of members of Congress, let alone voters. The headline figures – themselves disputed – of budget savings between $2tn and $3tn involve a complex series of assumptions over a decade, and include the results of an as-yet unborn “super committee” to identify cuts. Debate is now starting in the House of Representatives – so follow all the action right here. US economy Obama administration Republicans John Boehner US Congress US politics US economic growth and recession United States Economics Richard Adams guardian.co.uk

Posted by on August 1, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.