Obama’s Opponent
Negotiating over raising the U.S. debt limit is obviously rankling President Obama. His opponent, Speaker of the House John Boehner, is known as a naysayer.
Obama knows that politicians have to be thick-skinned. He doesn’t take criticism by the media especially seriously because it is all a part of the game of politics. The still unresolved negotiations over raising the debt limit, however, are obviously rankling him. When he last met with John Boehner on the issue, there were no jovial smiles for the cameras from either man.
For a time, it appeared that Obama and Boehner were close to an agreement on the debt question, but both men obviously had difficulty selling the compromise to their respective parties. When Boehner broke off talks for the second time last Friday, the language became sharper. “We have run out of time,” Obama said in a hastily called press conference. “I think one of the questions the Republican Party is gonna have to ask itself is can they say yes to anything,” he quipped.
In return, Boehner accused Obama of insisting on tax increases instead of promised cuts to Social Security and Medicare. There had been a handshake agreement on the extent of revenue increases, but the government then simply added an additional $400 billion to the increases, raising the total to $1.2 trillion. That prompted Boehner to remark, "Dealing with the White House is like dealing with a bowl of Jell-o.”
Treasury Department Tricks
The debt ceiling debate in Washington is beginning to cause anxiety in financial markets. If Congress doesn’t raise the ceiling limit by August 2, the government will be threatened with defaulting on its bills. Influential credit rating agencies like Moody’s or Standard & Poor’s have threatened the possibility of America’s credit rating being downgraded. Federal Reserve Chairman Ben Bernanke recently described a U.S. default as “catastrophic,” having the potential of causing global shockwaves.
Republicans, who now control the House of Representatives under John Boehner’s leadership, will only agree to a raise in the debt ceiling in conjunction with a lowering of the nation’s deficit, but there are differing proposals of how to accomplish that. Republicans refuse to consider tax hikes, and Democrats want no reductions in social programs. The government already reached the current debt ceiling of $14.3 trillion in May. Since that date, the Treasury has been using bookkeeping tricks and has reduced its accumulation of new debt to stay solvent. If the early August deadline passes without a solution to the problem, not only will America’s creditors stop receiving interest payments on their loans, but millions of retired Americans will stop receiving their monthly checks as well. According to a CNN poll, two-thirds of Americans accuse Republicans of dealing irresponsibly in negotiating an agreement; only slightly more than half see Obama as acting responsibly.
“Hell No!”
Last year, when the Democrats still controlled both houses of Congress, Boehner made headlines by opposing Obama with his “Hell No!” speech concerning healthcare reform. He stands to gain support from the more radical members of the tea party movement by not compromising with Obama on the debt issue, but Boehner also has to take into account the potential damage that will be done to the U.S. economy if no agreement is reached.
Boehner, who has German ancestors and hails from the Cincinnati area, made the leap from employee in a pharmaceutical company to student of economics. He was later head of a medium-sized company that produced packaging. He began his political career in the 1980s, first as a state representative in Ohio's government and later as a member of the U.S. House of Representatives. At 61 years of age, he is more than 10 years Obama’s senior and is a less gifted speaker than the president, but the two men have one thing in common: Both of them love cigarettes, so hope for an agreement isn’t totally out of the picture.
Obama knows that politicians have to be thick-skinned. He doesn’t take criticism by the media especially seriously because it is all a part of the game of politics. The still unresolved negotiations over raising the debt limit, however, are obviously rankling him. When he last met with John Boehner on the issue, there were no jovial smiles for the cameras from either man.
For a time, it appeared that Obama and Boehner were close to an agreement on the debt question, but both men obviously had difficulty selling the compromise to their respective parties. When Boehner broke off talks for the second time last Friday, the language became sharper. “We have run out of time,” Obama said in a hastily called press conference. “I think one of the questions the Republican Party is gonna have to ask itself is can they say yes to anything,” he quipped.
In return, Boehner accused Obama of insisting on tax increases instead of promised cuts to Social Security and Medicare. There had been a handshake agreement on the extent of revenue increases, but the government then simply added an additional $400 billion to the increases, raising the total to $1.2 trillion. That prompted Boehner to remark, "Dealing with the White House is like dealing with a bowl of Jell-o.”
Treasury Department Tricks
The debt ceiling debate in Washington is beginning to cause anxiety in financial markets. If Congress doesn’t raise the ceiling limit by August 2, the government will be threatened with defaulting on its bills. Influential credit rating agencies like Moody’s or Standard & Poor’s have threatened the possibility of America’s credit rating being downgraded. Federal Reserve Chairman Ben Bernanke recently described a U.S. default as “catastrophic,” having the potential of causing global shockwaves.
Republicans, who now control the House of Representatives under John Boehner’s leadership, will only agree to a raise in the debt ceiling in conjunction with a lowering of the nation’s deficit, but there are differing proposals of how to accomplish that. Republicans refuse to consider tax hikes, and Democrats want no reductions in social programs. The government already reached the current debt ceiling of $14.3 trillion in May. Since that date, the Treasury has been using bookkeeping tricks and has reduced its accumulation of new debt to stay solvent. If the early August deadline passes without a solution to the problem, not only will America’s creditors stop receiving interest payments on their loans, but millions of retired Americans will stop receiving their monthly checks as well. According to a CNN poll, two-thirds of Americans accuse Republicans of dealing irresponsibly in negotiating an agreement; only slightly more than half see Obama as acting responsibly.
“Hell No!”
Last year, when the Democrats still controlled both houses of Congress, Boehner made headlines by opposing Obama with his “Hell No!” speech concerning healthcare reform. He stands to gain support from the more radical members of the tea party movement by not compromising with Obama on the debt issue, but Boehner also has to take into account the potential damage that will be done to the U.S. economy if no agreement is reached.
Boehner, who has German ancestors and hails from the Cincinnati area, made the leap from employee in a pharmaceutical company to student of economics. He was later head of a medium-sized company that produced packaging. He began his political career in the 1980s, first as a state representative in Ohio's government and later as a member of the U.S. House of Representatives. At 61 years of age, he is more than 10 years Obama’s senior and is a less gifted speaker than the president, but the two men have one thing in common: Both of them love cigarettes, so hope for an agreement isn’t totally out of the picture.