Bargaining between Democrats and Republicans over the US debt ceiling will resume at the White House again today, after what has been a difficult and at times bitter negotiation.
The biggest news overnight regarded stocks in gold, which rallied for a ninth day of gains after investors hinted there could be a rush to buy hard assets if the stalemate was not resolved by the August 2 deadline.
The week’s acrid debate kicked into overdrive on Tuesday when President Barack Obama zinged House Majority Leader Eric Cantor for trying to usurp his boss, Speaker John Boehner, in the talks. The next day the New York Post reported Obama had walked out of negotiations before their end after another exchange with Cantor, which the president later denied.
On Thursday more pressure was stacked on the debate after credit ratings agency S&P joined with Moody’s and Chinese agency Dagong in putting US sovereign debt on watch for a possible credit downgrade.
Earlier in the week top Republican Senator Mitch McConnell outlined a plan to hand Congress’s debt ceiling power to the White House, which proved unpopular with his conservative colleagues, and Sarah Palin also weighed into the debate, saying on Fox News McConnell’s plan “makes no sense”.
While initially silent on the proposal, Democrats soon slated the plan as a possible “fall-back” option. But not everyone is opposed to McConnell’s plan, and while both sides are hoping for more comprehensive solutions, letting the president raise the deficit limit without congressional approval is being tipped as the most likely outcome as arguments continue and the deadline approaches.
Throughout the negotiations Obama has attempted to pitch himself as a pragmatist willing to make concessions and confront both parties, but has also continued to take a hard line on pushing to close tax holes for the wealthy. Republican’s have been equally resolute in opposing these measures, with Senate Minority Leader Mitch McConnell quipping: “Republicans will not be reduced to being the tax collectors for the Obama economy.”
Pundits have been divided over how best to deal with the crisis, but many have pointed the finger at Cantor as the one to blame, with The New York Times yesterday highlighting him as “…the new target for Democratic scorn this week”.
From here it is difficult to know what is going to happen next, but with the deadline looming time is growing short, and most are tipping the lifting of the ceiling as the likely outcome.
“Stocks in gold”? The physical stock? Or would that be the price of gold futures?
The ‘New York Post’ is NOT, and I repeat, NOT, a reliable new source. They tend to be a rather loose with the truth.
The Chinese ‘rating agency’ Dagong is merely a political mouth piece for the CCP. They put the US bond on a negative watch over QE3 because the US is effectively exporting its inflation to the Chinese economy via the yuan peg.
McConnell’s ‘fallback option’ is telling Obama to commit political suicide. It means the US president will now take on ALL the blame on the deficit, with the Congress and House voting to ‘not take a vote’. It is also uncertain whether they’ll have enough people in the House for the bill.
The ‘loopholes’ refers to tax concessions to companies, not the wealthy. Obama wants to get a deal which include the ‘sunsetting’ of the Bush tax cuts so it will not become an election issue for 2012.
The Salon link is from April 2011. They may be tipping it 3 months ago, however things are looking a lot worse now.
It is not good enough to merely search the internet and post some links. Please spend some time understanding the issue first, then you can use the links to support the conclusion.