Debt Limit Tick Tock

In May, CEA Chairman Austan Goolsbee Said Tying The Debt Ceiling To Spending Cuts Was ‘Quite Insane.’ Linking efforts to reduce long-term federal deficits with a congressional vote to raise the government’s debt limit puts U.S. credit at risk, President Barack Obama’s chief economic adviser told a Chicago audience. “To tie this to the debt limit is, in my view, quite insane,” Austan Goolsbee, chairman of the Council of Economic Advisers, said today to the Chicagoland Chamber of Commerce and other business leaders. (Bloomberg, 5/11/11) 

• Vice President Biden: Revenues Must Be A Part Of The Final Deal. "We're confident that if we keep on this pace, we will get to a very large number," Biden said, adding, "At the end of the day, revenues are going to have to be a part of the deal." (The Huffington Post, 5/24/11)

In June, President Obama Continued To Push For Increased Revenues. The debt ceiling needs to be raised by around $2.4 trillion to ensure that the government has enough money to keep functioning through the November 2012 election. Republicans say they want spending cuts to equal any increase in the limit, but the administration is pushing for a package that also includes revenues. Obama favors $3 dollars in spending cuts for every extra dollar in revenue. (Reuters, 6/27/11)

• VP Biden, Sec. Geithner Made Attempted To Pressure Republicans On Higher-Revenue Issues. Vice President Joe Biden and Treasury Secretary Tim Geithner pressed Republicans to accept higher revenue to help curb deficits in talks aimed at achieving a plan to raise the U.S. debt limit before Aug. 2, two congressional aides said. Republicans countered during the private meeting yesterday that any tax increase would hurt the economy and couldn’t pass the Republican-led House, said the aides, who spoke on condition of anonymity as lawmakers stepped up attempts to reach an agreement. The two aides weren’t authorized to discuss the talks publicly. (Bloomberg, 6/10/11)

• At The End Of June, President Obama Declared The Amount Of Deficit Reduction Necessary Cannot Occur Without Higher Taxes. “You can't reduce the deficit to the levels that it needs to be reduced without having some revenues in the mix," Mr. Obama said during a news conference Wednesday. (The Wall Street Journal, 6/30/11)

By The End Of July, President Obama Remained The Only Major Player Insisting On Tax Increases. As Republicans and Democrats continue trying to hammer out the details of rival plans to avert a debt crisis, President Obama on Monday called for a proposal that will raise more revenue ... At the moment, neither Senate Democrats nor House Republicans are talking about tax revenues as part of the final deal. (The Los Angeles Times, 7/25/11)

• President Obama Continued To Call For Tax Hikes Despite His Own Party Abandoning Them. We've watched dozens of these speeches over the years, and this was more like a DNC fund-raiser than an Oval Office address. Though President Obama referred to the need to compromise, his idea of compromise was to call on the public to overwhelm Republicans with demands to raise taxes. ... One irony is that Mr. Obama's demands for tax increases have already been abandoned by Members of his own party in the Senate. Majority Leader Harry Reid knows that Democrats running for re-election next year don't want to vote to raise taxes, so he's fashioning a bill to raise the debt ceiling that includes only reductions in spending. But Mr. Obama never mentioned that rather large fact about Mr. Reid's effort. (The Wall Street Journal, 7/25/11)