Reid Delays Senate Vote To Give Debt Negotiators More Time

Senate Majority Leader Harry Reid announced Saturday night that he was delaying a vote on his deficit-cutting bill until 1 p.m. Sunday in order to give negotiators more time to reach an accord on raising the debt limit.

Elements of a possible deal began to emerge near midnight.

Numerous reports, all citing anonymous sources, said the White House and Republicans were discussing a plan to raise the debt ceiling by up to $2.8 trillion and making cuts of about that in two separate chunks. The Associated Press and The Washington Post reported a lower figure for the increase in the debt ceiling of $2.4 trillion.

Reuters laid out these elements:

* $2.8 trillion deal. It would raise the debt ceiling by that amount through 2012 and make equal spending cuts.
* $1 trillion in cuts would be agreed now.
* Special committee appointed by Congress would recommend a second installment of savings of about $1.8 trillion.
* If Congress cannot agree on how to implement the cuts recommended by the committee, automatic cuts would be triggered, including reductions in military spending and cost savings to the Medicare health care program for the elderly. Benefit cuts would not be triggered though.
* No cuts in Social Security.

It was unclear whether tax increases could contribute to the additional budget savings under the trigger. The AP and ABC News said the deal would include a vote on a balanced budget amendment, although it was unclear what form such a vote would take.

“There are many elements to be finalized and there is still a distance to go before any arrangement can be completed, but I believe we should give everyone as much room as possible to do their work,” Reid said on the Senate floor.

Reid said that he'd spoken to White House officials several times Saturday night and that they agreed that a delay was necessary “to give them more time to talk” — seeming to imply that the bargaining at this point was between Republicans and President Barack Obama.

“I’m glad to see this move toward cooperation and compromise. I hope it bears fruit,” Reid said.

As of Saturday evening, Reid apparently lacked the 60 votes he needs, under Senate rules, to end debate on his bill and proceed to a final vote.

But the center of the drama appeared to have shifted to Republican Leader Mitch McConnell's office as he continued telephone conversations with Obama and Vice President Joe Biden in an attempt to design a deal that enough members in each party could support.

GOP leader 'confident and optimistic'
McConnell said Saturday afternoon he was “confident and optimistic” that he and GOP leaders will reach an accord “in the very near future” with Obama. But a few hours later, Reid took to the Senate floor to dispute McConnell's assessment, saying that "the process has not been moved forward during this day."

McConnell responded by telling the Senate, "I'm more optimistic than my friend, the majority leader. We both talked to the president today, talked to the vice president several times. I think we've got a chance of getting there.... I actually cut short a conversation with the vice president to come out here" to the Senate floor.

At that point, McConnell proposed to move, after an interval of a few minutes, to a vote on ending debate on Reid's bill.

But Reid immediately blocked McConnell's proposal, leaving the vote on cloture, or ending debate, the most likely next move.

Forty-three Republican senators said they opposed the Reid bill. In a letter to Reid, they wrote that the bill "fails to address our current fiscal imbalance and lacks any serious effort to ensure that any subsequent spending cuts are enacted."

On Saturday the House voted down the Reid proposal by a vote of 246 to 173. Eleven Democrats, mostly from Republican-leaning districts, voted with 235 Republicans to defeat the bill.

Assessing Reid's proposal
The non-partisan Congressional Budget Office has estimated that the Reid proposal would reduce deficits by about $2.2 trillion over ten years, which would be about a 16 percent reduction in future deficits, using the CBO's most plausible budget scenario.

But Republicans contend that $1 trillion of those savings are illusory since they're based on the anticipated cost of troop deployments in Iraq and Afghanistan until 2021. Obama and Congress have already decided to end those deployments well before 2021.

Without those savings from Iraq, Afghanistan and other "overseas contingency operations," Reid's proposal would cut deficits by a total of $1.1 trillion, compared to $917 billion in deficit cutting in House Speaker John Boehner's plan, which the House approved but the Senate rejected Friday.

Earlier Saturday McConnell told reporters that he and Boehner “are now fully engaged... with the one person in America, out of 307 million people, who can sign a bill into law..... We now have, I think, a level of seriousness with the right people at the table. We’re going to get a result.”

He added, “We all know that if the president decides to reach an agreement with us, the Democrats, most of them, will fall in line. He is the leader of the Democratic Party; he is the president of the United States. He needs to indicate what he will sign. And we are in those discussions now.”

Why so optimistic?
The House and the Senate, where the Democrats have a majority of 53, had each other essentially in legislative check Saturday, with neither Reid's deficit reduction bill nor Boehner's having enough support in the other body to move ahead.

There appears to be general agreement between Democratic and Republican leaders on an initial round of cuts in discretionary spending. That first round of cuts would not apply to entitlement programs such as Medicare and Social Security.

A crucial point blocking a final agreement is the question of “triggers” — mandatory actions that would occur if Congress did not approve a second round of spending cuts.

Given this discord, it was not clear what new development, if any, had made McConnell and Boehner sound so confident of a deal.

Boehner, standing with McConnell at the press conference Saturday, said he too was confident that an accord will be reached soon. Referring to Obama and his aides, Boehner said “We’re dealing with reasonable, responsible people who want this crisis to end as quickly as possible.”

McConnell also declared to reporters Saturday that a default on government debt “is not going to happen,” even though the government is only two days from reaching the date the Treasury Department had identified as the point at which the government will exhaust its legal ability to issue new bonds.

If the borrowing limit is reached, Treasury Secretary Tim Geithner has said, the government will be forced to make a 40 percent cut in outlays.

Geithner has been unwilling to discuss in public how the Treasury would manage its cash if it exhausts its borrowing ability.

But Bloomberg News reported Friday that the Treasury would give priority to making interest payments to holders of Treasury bonds if lawmakers fail to reach an agreement to raise the debt ceiling.

The prolonged standoff over raising the $14.3 trillion debt limit comes at a time when data are pointing to persistent economic weakness and when business leaders are voicing worry that a disruption of bond markets would only make matters worse.

Vulnerable to a shock
The government reported Friday that in the first quarter of the year the economy grew by only 0.4 percent.

The government also revised its previous output figures for 2008 and 2009, revealing that the recession was worse than previously thought, with the economy shrinking by 0.3 percent in 2009 and by 3.5 percent in 2008.

With more than 14 million people still officially categorized as unemployed, and with millions more having given up looking for jobs, the economy remains in a fragile state.

David Beers, the global head of sovereign ratings at the bond rating firm Standard & Poor’s, said last week that reaching the debt limit “would not be default so long as the government is continuing to pay its debt as it matures and its interest payments.”

But the government being unable to borrow, and the resulting cut in outlays, would be, Beers said, “a very sudden fiscal shock that, the longer it lasted, would filter powerfully through the system… Potentially that would be deeply disruptive to the economy.”

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  • by Obama Snake Oil co Location: Washington on Aug 1, 2011 at 10:00 AM
    No Kimo, Barlow thinks the government should take care of everything for us. He apparently, cannot make good decisions for himself...afterall, look who he voted for.
  • by Kimo Location: Belhaven on Jul 31, 2011 at 11:40 AM
    So Barlow thinks that non-profit medical care will cost less. I refer you to UHS tax return at Take a look at where their money goes and then tell me again how much better a non-profit is at taking care of the folks. The only folks they take care of is themselves.
  • by Tyee Location: Hyde County on Jul 31, 2011 at 09:28 AM
    Reference to confirm my previous statement. This is super important. Thanks WITN.
  • by Tyee Location: Hyde County on Jul 31, 2011 at 08:56 AM
    This matter goes further than medical care, it is the budget of the U.S. Our defenses is in dire straights. Two years ago the Russians outwitted us by putting missiles underneath the ice cap (2 of them) and they plan to build plenty more and can not be detected. This is a comprehensive budget, it is super important. Being put out as a medical plan is just another joke being played on the people of the US.
  • by Wilson Location: NC on Jul 31, 2011 at 06:00 AM
    All Penney Health does is help you find health insurance , but you have to pay them $29.00 dollars a month. They want your money! Here is there ad , don't be fooled people? Like Barlow tries to spin Obama on you. - Penny Health Insurance offers help to find health insurance plan and medical coverage for any one with any condition or situation in the US. We call our self Penny Health Insurance to remind the importance of even a penny. No body can provide medical insurance for pennies but if it has become harder to get an affordable health coverage for you or your family we can definitely help you find an affordable insurance plan! Penny Medical Insurance provides free quotes for individual, group, and family plans. Our plans may start as low as $29/month. All our quotes are free and there are no hidden fees. No SSN required to receive the free quote. Contact us for free health insurance consultation. We will find right insurance. Below are the complete list of Affordable Health Insurance Provided in the US by Major Insurance Companies as well as by the Government. Please check ALL of them to find the right program for you
    • reply
      by Wolfgang on Jul 31, 2011 at 09:13 AM in reply to Wilson
      Wilson you are right all Barlow is doing is spinning Obama on us. Penny Heath is not health insurance , they are a finders company who you have to pay for their service , thats all. Nice try Barlow. Barlow - Daffy Duck could beat Obama in a election today.
      • reply
        by Barlow on Jul 31, 2011 at 12:11 PM in reply to Wolfgang
        I said "they have a big ad for people with pre-existing conditions" and they do. I said nothing about them selling insurance. MY POINT WAS without the health care plan initiated by the Obama administration, there would be no coverage for pre-existing conditions. Again, thank you President Obam.
        • reply
          by Obama Snake Oil co on Jul 31, 2011 at 02:03 PM in reply to Barlow
          Thanks him, but don't forget to say goodbye to him...
  • by Reader Location: Beaufort County on Jul 31, 2011 at 05:56 AM
    Thanks WITN for this informative article. You do such a great job with this website!
  • by here comes big brother on Jul 31, 2011 at 04:24 AM
    great, let me purcahase fire insurence after a fire and drive the insurence companies out of business, then the feds will have to take care of it, draining what little money that this country has and really making us default. I'm sorry you have an illiness (and before you get snarky, so do I) but we need a better solution then runing to the goverment for everything and making us depend on them for everything in our lives. I guess the vision of USS, Untied socialial States where there is no free will, just big brother watching you.
  • by tinalevenson Location: ca on Jul 31, 2011 at 01:44 AM
    In fact, under new health care reform your health insurance company will no longer be allowed to cancel your policy if you get sick, we should be doing this already! search online "Penny Health" it is a good place to find insurance if you have illness like me.
    • reply
      by Barlow on Jul 31, 2011 at 02:57 AM in reply to tinalevenson
      I went to Penny Health. I see they have a big ad for people with pre-existing conditions. Since you have illnesses you should be especially appreciative of the new provision in the new Health Care Bill that prevents insurance companies from denying you insurance. I'm sure you'd like to thank President Obama for that.
      • reply
        by Obama Snake Oil co on Jul 31, 2011 at 05:03 AM in reply to Barlow
        Can you furnish information of where anyone was denied insurance for a condition? There you go with the make believe web sites.
        • reply
          by Barlow on Jul 31, 2011 at 08:20 AM in reply to Obama Snake Oil co
          A recent national survey estimated that 12.6 million non-elderly adults5 – 36 percent of those who tried to purchase health insurance directly from an insurance company in the individual insurance market – were in fact discriminated against because of a pre-existing condition in the previous three years. In another survey, one in 10 people with cancer said they could not obtain health coverage, and six percent said they lost their coverage, because of being diagnosed with the disease.
        • reply
          by Anonymous on Jul 31, 2011 at 05:16 PM in reply to Obama Snake Oil co
          Don't be ridiculous, just ask any elderly person, parent, or cancer patient. Chances are, they were denied coverage on certain illnesses. Go back under your rock.
        • reply
          by Obama Snake Oil co on Aug 1, 2011 at 03:42 PM in reply to Obama Snake Oil co
          Well furnish the facts here right now. Put you money where you post is. That is the biggest made up liberal hooey website nonsense posted here yet.
      • reply
        by Anonymous on Jul 31, 2011 at 06:23 AM in reply to Barlow
        Thats great Barlow and the rest of us who have to pay full price for insurance and the rising cost of medical care (thanks to Obama) get to pay even more for insurance now. It is great to help the less fortunate but someone has to pick up their side of the bill and that is the taxpayers.
        • reply
          by Barlow on Jul 31, 2011 at 08:18 AM in reply to
          Like your medical bills weren't going up and up before Obama became President! I got an itemized bill from the hospital and got charged $30 for a 5ft piece of gauze! BASIC MEDICAL CARE SHOULD NOT BE FOR PROFIT. France has a national healtcare system and health-care spending in 2004 was at just $3,500, compared with $6,100 in the U.S., according to the World Health Organization. France spends 10.7% of gross domestic product on health care, vs. 16.5% in the U.S. France does not rely totally on the state for health care, but neither do they allow themselves to be raped by hospitals and insurance companies.
        • reply
          by Obama Snake Oil co on Jul 31, 2011 at 02:08 PM in reply to
          Again Barlow...spinning the facts. France has mandated healthcare just like all the socialist countries do. That 6K will soon be about 8K since now we will pay for illegals still, just like before only with a new bigger bureacracy. That is what libtards do...
        • reply
          by Me on Jul 31, 2011 at 03:22 PM in reply to
          To Barlow @ 11:18 - I have a great idea for your Barlow, how about you move to France, permanently, and let the american citizens who love this country for what it was before Obama have it back. We don't want your hope and change, quite frankly, it sucks!!!

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