Debt talks: Are we ready for Plan C?
Share Now on:
STEVE CHIOTAKIS: At his third news conference in two weeks today, President Obama acknowledged it’s gonna be hard to put a big package together to raise the nation’s debt ceiling — a package that he says would utilize a balanced approach. But Mr. Obama says he’s waiting on the other side.
BARACK OBAMA: If they show me a serious plan, I’m ready to move, even if it requires some tough decisions on my part.
Marketplace’s David Gura is with us live from Washington with the latest. Good morning, David.
DAVID GURA: Good morning Steve.
CHIOTAKIS: So that press conferences just wrapped up a few moments ago. The president underscored the Congress has 24 to 36 hours to tell him what’s on the table, what’s realistic there. Are we any closer to a deal?
GURA: Well, there aren’t any negotiations happening today, between the White House and the leaders of the House and Senate. In fact, earlier this morning, the Speaker of the House, John Boehner, held a news conference of his own. And he told reporters what the president’s put forward so far just isn’t good enough.
JOHN BOEHNER: There is no reason for this debate and this discussion to go past August the 2. All it takes is a little courage to actually cut spending and put America on a path to fiscal sanity.
And that’s been the big stumbling block, Steve. Republicans say there’s no way they’re going to consider any tax increases. President Obama wants a plan that combines spending cuts.
CHIOTAKIS: Of course August 2 — that deadline for the default on the debt. So, if they can’t reach an agreement, what’s Plan B?
GURA: Well there are a few of them floating around, but the one that’s gotten the most traction comes from the Senate Minority Leader, Republican Mitch McConnell. Basically, Congress would give the president the ability to raise the debt ceiling three times over the next year and half. So, he’d get all the blame, or all the credit, depending on how you feel about this issue — not Congress. We should have a better sense of how this may shake out what’s realistic in the next day or two.
CHIOTAKIS: Marketplace’s David Gura in Washington. David thanks.
GURA: Thanks you.
JEREMY HOBSON: President Obama will not be negotiating with members of Congress about raising the debt limit today. At least not publicly. But that doesn’t mean the pressure has let up — the President reportedly told lawmakers “it’s decision time.” He’ll take his message to reporters later this morning in a news conference.
Marketplace’s David Gura joins us now live from Washington with more on this story. Good morning.
DAVID GURA: Good morning Jeremy.
HOBSON: Well David — the President says it’s decision time — but I assume we’re not talking about what you might call Plan A — the stuff that we were talking about at the beginning of the week.
GURA: No, that’s what President Obama really wanted, What’s been called the “holy grail,” “a grand bargain.” That would save up to $4 trillion over the next ten years through both spending cuts and new tax revenues, mostly tax increases for corporations and wealthier Americans. That suffered a big setback last weekend when members of the GOP say they oppose any plan that would include tax hikes. Yesterday President Obama reportedly told lawmakers that the clock is ticking down to August 2. They’ve had meetings all week Jeremy, and it’s time for them to tell him what’s feasible.
HOBSON: And what kind of plan could work, David? I mean, what is Plan B, Plan C? What are the other options?
GURA: There are a few of them floating around here, but the one that’s gained the most traction is from the Senate Minority Leader, Mitch McConnell. Basically, the president could raise the debt ceiling, by about $2.5 trillion. But the onus would be on him, not Congress. He’d get all the blame or the credit depending on how you see it. The president would be able to raise the limit in three stages, if he suggests new spending cuts every time. McConnell’s plan also calls for a bi-partisan debt-reduction commission, apparently. Democrats rejected McConnell’s plan early on, but now the two credit rating agencies have said they’re considering downgrading the U.S.’s credit rating. Now they may have to consider it.
HOBSON: Marketplace’s David Gura in Washington, thanks.
GURA: Thank you.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.