Current Senate and White House negotiations cause markets to rebound

3 p.m. meeting postponedHuffPo

The White House says a meeting between Obama and congressional leaders has been postponed to give Senate leaders more time to resolve a standoff over the nation’s debt and the partial government shutdown.

From Slate’s Shutdown Liveblog:

12:05 p.m.: Afternoon Action as Congressional Leaders Head to the White House, via WaPo:

President Obama and Vice President Biden will meet with the top-ranking House and Senate leaders in both parties this afternoon at 3 p.m., a White House official said. Obama will huddle at the White House with House Speaker John Boehner (R-Ohio), House Minority Leader Nancy Pelosi (D-Calif.), Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.).

12 p.m.: Reid Makes an Offer, via Politico:

Harry Reid has privately offered Senate Minority Leader Mitch McConnell a deal that would reopen the government until mid-to-late December while extending the U.S. debt ceiling until next year, according to several sources familiar with the talks.

The proposal would set up a framework for larger budget negotiations with the House over the automatic sequestration spending cuts and and other major deficit issues, the sources said. Moreover, Senate Democrats are open to delaying Obamacare’s medical device tax and a requirement that those receiving Obamacare subsidies be subject to income verification — but they would have to get something from Republicans in return, sources said.

McConnell is still reviewing the offer and is privately huddling with groups of GOP senators Monday who could be key to providing enough votes in the Senate. On Monday morning, McConnell met with Sens. John McCain of Arizona, Susan Collins of Maine, Lisa Murkowski of Alaska, Mike Johanns of Nebraska and Mark Kirk of Illinois.

And, Markets, any comment?

Capture

Stock markets rebound as budget talks continue - via Politico

The stock market rebounded Monday afternoon following a weak opening, amid renewed hope that Congress was nearing an agreement to re-open the government and raise the debt ceiling, which the Treasury Department says needs to be done by Thursday.

By early afternoon trading, the Dow Jones Industrial Average was up more than 20 points, having made up the ground it had lost in early morning trading when it was down as much as 100 points. The Nasdaq, which had also dipped in the morning, was up more than 12 points, while the S&P 500 was also up more than 2 points.

The bounce in the stock market followed new signals from the Senate Monday that an agreement could be reached soon. Senate Majority Leader Harry Reid (D-Nev.) — who had rejected a proposal from Sen. Susan Collins (R-Maine) over the weekend — has offered Senate Minority Leader Mitch McConnell (R-Ky.) a plan that would re-open the government and raise the debt ceiling until next year, POLITICO reported.

The Republican hostage plan: monthly debt ceiling hikes until they can all agree on a ransom

Can you imagine the debt ceiling fight going month to month — for eternity? That’s John Boehner’s new vision for America, because even though Republicans know the debt ceiling has to be raised, they want to use it as leverage for all their demands. Forever.

Greg Sargent thinks it’s a sign that Republicans may not have the spine for a debt ceiling fight:

“Boehner does this by threatening to only agree to ‘monthly’ debt ceiling hikes. But this should be read, if anything, as a sign of weakness. It’s essentially a concession that the debt limit has to be raised; Boehner is merely threatening to drag his feet as he allows the inevitable to happen. But it’s just nonsense. The business community is not going to go for such a course of action, to put it mildly. And it risks dragging the country through monthly threats of default, a terrible thing to inflict on the American people.

Ultimately, what this highlights is the utter incoherence of the GOP position on the debt ceiling. Republican leaders know they have to raise the debt limit — they know the threat not to do this isn’t credible, and they need to signal to the business community that they don’t view this option seriously — yet they want to continue to use it as leverage to get what they want, anyway.”

Steve Benen agrees that it’s a sign of weakness:

“In order for a hostage standoff to work, everyone has to sincerely believe the hostage takers are prepared to follow through on their threats. In the case of the Republicans’ latest debt-ceiling crisis, that means President Obama and congressional Democrats have to be convinced that GOP policymakers will hurt Americans on purpose unless Dem meet Republicans’ demands.

[...] the fact that Boehner hedged at all on using the debt ceiling suggests there’s at least a small crack in the wall.Indeed, it’s not the only one. The Washington Post quoted Rep. Billy Long (R-Mo.) the other day questioning the utility of the strategy, noting “no one knows the ramifications of not passing a debt ceiling increase.” Senate Minority Leader Mitch McConnell (R-Ky.) was reluctant to rattle his saber, too, in his Sunday show appearances.

Newt Gingrich and the Wall Street Journal‘s conservative editorial board have also raised concerns about the apparent Republican plan. (I use the word “plan” loosely; to date GOP leaders have indicated they intend to hold the debt ceiling hostage, but they have not yet figured out what to put on the ransom note.)”

And Kevin Drum summarizes Boehner’s negotiating “skills” during the fiscal cliff negotiations — and what it probably means for future “negotiations” over the debt ceiling:

“Because in this case, the objective facts are really pretty clear. Boehner never once put forward a detailed plan, while Obama did repeatedly. And as Andrew says, Obama’s position moved in Boehner’s direction every time, with his revenue ask going down and his spending cuts going up.

In the end, though, Boehner just couldn’t make a deal. This isn’t because Obama was an arrogant bastard who never tried to understand their differences, it’s because a majority of Boehner’s caucus simply wasn’t willing to agree to a tax hike of any kind and Boehner wasn’t willing to back a plan that didn’t have majority GOP support. There’s really not much more to it than that. Boehner and Obama may well be tired of each other, but that’s not why their negotiations routinely fall apart. It’s because Boehner has no control over his own caucus.”

Is negotiating with lunatics and idiots — whose only concern is staying in their recently acquired, cushy, do-nothing jobs for life by answering only to the voters in their little gerrymandered districts — really what’s best for the country?

David Brooks: Republicans deserve most of the blame, have had “brain freeze” since election

“What’s happening in Washington right now is pathetic. When you think about what the revolutionary generation did, what the civil war generation did, what the World War II generation did — we’re asking not to bankrupt our children and we’ve got a shambolic, dysfunctional process. Most of the blame still has to go to the Republicans. They’ve had a brain freeze since the election. They have no strategy. They don’t know what they want. They haven’t decided what they want.”

— David Brooks, during an appearance on NBC’s “Meet the Press” yesterday.

Harry Reid this afternoon: “…we are apart on some pretty big issues.”

Pres. Obama was right. From Steve Benen:

“What seems to be the trouble? As of this afternoon, McConnell is demanding chained CPI, and wants more tax breaks for the wealthiest of the wealthy through higher estate-tax thresholds. He’s also refusing to include a debt-ceiling increase in the agreement.

Or put another way, in a literal sense, Republicans are holding up middle class tax breaks by demanding cuts to Social Security benefits and a tax break for the top 0.01% of the country — all while laying the groundwork for another hostage crisis in two months.”

Tell me again how both sides do it — how there’s no difference between the parties.

The adults make a last-ditch effort on the fiscal cliff

Reuters: Obama said he was “modestly optimistic” that an agreement could be found that would prevent taxes going up for almost all working Americans.

If things cannot be worked out in the Senate, Obama said he wanted both chambers in Congress to vote on a plan of his that would increase taxes only for households earning more than $250,000 a year.

The plan would also extend unemployment insurance for about 2 million Americans and set up a framework for a larger deficit reduction deal next year.

“The hour for immediate action is here. It is now. We’re now at the point where in just four days, every American’s tax rates are scheduled to go up by law. Every American’s paycheck will get considerably smaller. And that would be the wrong thing to do,” Obama told reporters.

He was speaking after an hour-long meeting in the White House with the two Senate leaders plus their counterparts in the House, Republican Speaker John Boehner and Democratic Minority Leader Nancy Pelosi.

A total of $600 billion in tax hikes and cuts to government spending will start kicking in on Tuesday if politicians cannot reach a deal, which could push the U.S. economy into a recession.

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The President’s Weekly Address: Congress must protect the Middle Class from income tax hike –


In part:

“For the past couple months, I’ve been working with people in both parties — with the help of business leaders and ordinary Americans — to come together around a plan to grow the economy and shrink our deficits.

It’s a balanced plan — one that would protect the middle class, cut spending in a responsible way, and ask the wealthiest Americans to pay a little more. And I’ll keep working with anybody who’s serious about getting a comprehensive plan like this done — because it’s the right thing to do for our economic growth.

In just a couple days, the law says that every American’s tax rates are going up. Every American’s paycheck will get a lot smaller. And that would be the wrong thing to do for our economy. It would hurt middle-class families, and it would hurt the businesses that depend on your spending.

Congress can prevent it from happening if they act now.

Leaders in Congress are working on a way to prevent this tax hike on the middle class, and I believe we may be able to reach an agreement that can pass both houses in time.

But if an agreement isn’t reached on time, then I’ll urge the Senate to hold an up-or-down vote on a basic package that protects the middle class from an income tax hike, extends vital unemployment insurance for Americans looking for a job, and lays the groundwork for future progress on more economic growth and deficit reduction.” …

The only rational way to negotiate with House Republicans

Why Obama isn’t caving: “After his 2008 win, he talked a lot about bipartisanship. This time he’s determined to squeeze it out of Republicans. He believes he owes that to the people who voted for him.”

WSJ: “Mr. Obama repeatedly lost patience with the speaker as negotiations faltered. In an Oval Office meeting last week, he told Mr. Boehner that if the sides didn’t reach agreement, he would use his inaugural address and his State of the Union speech to tell the country the Republicans were at fault.

“At one point, according to notes taken by a participant, Mr. Boehner told the president, “I put $800 billion [in tax revenue] on the table. What do I get for that?”

“You get nothing,” the president said. “I get that for free.”



Or as John Cole reminds us: “And the GOP continues to lose their shit and become publicly undone [...] If this was just about the collapse of the Republican party, it would be one thing. But the fact of the matter is they are very dangerous to the country. If they were just lying on the floor unraveled, it would be one thing. But institutionally, they have enough power to do serious harm to the nation.”

…Though it has been 45 days since voters emphatically reaffirmed their faith in Mr. Obama, the time since then has shown the president’s power to be severely constrained by a Republican opposition that is bitter about its losses, unmoved by Mr. Obama’s victory and unwilling to compromise on social policy, economics or foreign affairs.

“The stars are all aligning the wrong way in terms of working together,” said Peter Wehner, a former top White House aide to President George W. Bush. “Right now, the political system is not up to the moment and the challenges that we face.”

House Republicans argue that voters handed their members a mandate as well, granting the party control of the House for another two years and with it the right to stick to their own views, even when they clash strongly with the president’s…

We are living in strange times

“This is not a negotiation in the normal sense, in which each side makes proposals and they dicker over the details; instead, Republicans are demanding that Obama read their minds and produce a proposal they’ll like. And Obama won’t do that, for good reason: he knows that they’ll just pronounce themselves unsatisfied with whatever he comes up with, and are indeed very likely to campaign in 2014 attacking him for whatever cuts take place. But then, should we be surprised? Remember that all the Republican budget “plans” of recent years—very much including the Ryan plan—have been built largely out of magic asterisks…We are at a strange and dangerous place in American political life.”

— Paul Krugman 

How UNSERIOUS is John Boehner in negotiating a solution to the fiscal cliff?

CNN: Washington (CNN) – One of the reasons Tuesday night’s conversation between President Barack Obama and John Boehner did not go well was because the GOP House speaker sent the White House a fiscal cliff proposal calling for a permanent extension of Bush-era tax cuts for all Americans, including for incomes in the top 2%, a Democratic source said Wednesday. — Dem. source: GOP calling for permanent extension of cuts for wealthiest 2%


image: livealifethatscompletelyfree

Debt ceiling negotiations are ongoing

Try to tell me that pic above isn’t an accurate representation of where we are at this moment:

Senate Majority Leader Harry Reid told the Senate Sunday that negotiators were closing in on a debt limit package, but he warned that unresolved questions remained and that “each of them must be resolved before we have a final agreement. And as we know, one problem can stop the whole agreement from going forward.”

[...] Reid also said that as part of an accord, a 12-member joint congressional committee will be created and given the task of achieving further deficit reduction, once a first round of cuts has been made.

“There are no constraints. It can look at any program we have in government,” Reid said of the new committee. “It will be essential to choose members with open minds willing to consider every option, even when the options are difficult to swallow for both parties.”

[...] Plouffe outlined the structure of an agreement between Obama and congressional leaders.

It would require an initial round of $1 trillion in deficit reduction, mostly or entirely coming from spending cuts, followed by work by the new congressional committee to recommend even deeper deficit reduction which would be achieved, said Plouffe, through “entitlement reform and tax reform.”

He said the committee would be mandated to recommend specific spending cuts, but it “is not going to be charged with just doing spending cuts only. The committee is going to be charged looking at our entire deficit reduction problem and look at things like tax reform and revenue.”

And this:

On Saturday McConnell told reporters that, “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.”

Has McConnell ever met these ‘Democrats’ he speaks of?

No debt talks today: Obama gives Congressional leaders 36 hours

ABC’s Jake Tapper reports there will not be a meeting today. “The congressional leaders are going back to their caucuses and will report to President Obama in the next 24-36 hours as to where they think they can go.”

Brian Beutler reports that President Obama told Congressional leaders to reach a final agreement on a path to raise the debt limit in the next 24-36 hours or…he’ll call another meeting at the White House.

No one likes Eric Cantor, except for maybe the wealthiest among us

Thank God Cantor is there to fight for the rich, the corporate powers, the wealthiest among us, whose incomes have increased three-fold in the past few decades while the rest of us have seen our incomes flat-line or disappear. Cantor is fighting to continue the bottom to top income redistribution that Reagan started and GWB continued:

Last night, President Obama and Eric Cantor exchanged harsh words over the debt ceiling, and on the Senate floor just now, Harry Reid uncorked a harsh attack on Cantor that suggests Dems are embarking on a new strategy: Isolating Cantor as the new public face of GOP intransigence.

Reid’s remarks are worth quoting at length:

Even Speaker Boehner and Minority Leader McConnell seem to understand the seriousness of the situation. They are willing to negotiate in good faith, which I appreciate, and the country apppreciates.

Meanwhile, House Majority Leader Eric Cantor has shown he couldn’t be at the table, and Republicans agree he shouldn’t be at the table. One Republican told Politico last night, “he lost a lot of credibility when he walked away from the table. It was childish.”

We had negotiations going here in a room a short jog from here, and he walked out on the meeting…It was childish. Another Republican said Cantor is putting himself first. He said: “He is all about Eric.” End of quote.

The time for personal gain and political posturing are over. It’s time to put our economy and our country first. The risks we face are simply too great. We don’t need to take my word for it. More than 300 respected business leaders wrote to Congress night before last to make it clear how serious this crisis really is.

Accounts of what happened last night vary, but the one thing they all agree upon is that Cantor played a lead role in telling the President that revenue increases simply aren’t going to happen, and that Obama didn’t react kindly to it.

The Daily Beast reports, President Obama pushed back against the mounting menu of spending cuts while the tax column on the negotiating sheets remained blank. He asked the Republican leaders how they expected him to take their proposals seriously.

Is it good faith to suggest all sorts of cuts to services and programs like Medicare, or like students should start paying interest on their student loans while they’re still in school, while you’re demanding the rich not be touched at all, that there is no way the tax cuts should expire on the wealthiest?

All cuts, no new revenue!  Adults don’t think like this.

Debt ceiling disarray: Who exactly is running this thing — Boehner or Cantor?

Little progress in debt ceiling talks:

Since pulling the plug on the deal, Boehner has been largely silent in the meetings, leaving House Majority Leader Eric Cantor (R-Va.) to present details of the House’s position. On Tuesday, people in both parties said, Obama tried to reestablish Boehner’s primacy.

Cantor, who is advocating a smaller deal, at one point demanded that Obama offer the details of his vision for a “grand bargain.”

“Where’s your paper?” he asked angrily.

Obama snapped back: “Frankly, your speaker has it.  Am I dealing with him, or am I dealing with you?

If Boehner needs to go to Cantor to approve any agreement, why is Obama dealing with Boehner at all? Boehner right now is Junior Soprano, permitted to keep his title while Tony actually runs the family. If I’m Obama in the next round of negotiations, I’m looking at Boehner and thiking, “Why are you in this room?” thenewrepublic

 

 

Teaparty’s government shutdown: Procedures and Furlough Notifications

See all government shutdown related posts as they update…

See the 16-page memo to the Heads of Executive Departments and Agencies, detailing shutdown procedures (PDF document). Procedures such as:

Saturday, April 9/Sunday, April 10/Monday, April 11: During the weekend, we will advise you further, depending on the status of appropriations action, as follows:

Normal Operations: If it is apparent late Friday evening or early Saturday that a new CR is likely to be enacted on Saturday, OMB will instruct agencies to operate in a normal manner (and not engage in shutdown activities).

Shutdown: If no new CR is likely to be enacted on Saturday, OMB will issue instructions on Saturday for agencies to proceed with their shutdown implementation, initiating the orderly shutdown by non-excepted employees. Agencies will need to issue furlough notices to non-excepted employees during the next scheduled work day (Saturday or Sunday for weekend employees and Monday for all other employees). Agencies are encouraged to issue furlough notices electronically to employees where possible. Absent compelling circumstances, agencies should complete orderly shutdown activities for non-excepted personnel within the first half-day (i.e., up to four hours) of an employee’s normal work schedule.

New OMB guidance explains shutdown procedures: If a shutdown happens, furloughed employees will get up to four hours on their next scheduled workday to go to their offices and turn in equipment, change voicemail messages, and take other steps to proceed with the closing in an “orderly” way, according to new Office of Management and Budget guidance.

HUD workers asked to update contact and pay information: Update your pay information, make sure your phone number is current, and no matter what happens, show up for work Monday.

Oh, and get this: federal employees continue to be the enemy of the Teaparty Republicans:

Government shutdown: Cuts in federal pay and benefits targeted as part of budget compromise, sources say: Congressional and White House budget negotiators hoping to pass a deal to fund the government by the end of Friday to avoid a government shutdown are considering $1.3 billion in savings by cutting the pay of at least some federal employees, possibly by denying some bonuses and step increases, according to a Republican aide familiar with the GOP offers and a senior administration official.