US lawmakers reach deal to avert govt shutdown

The agreement included some $38.5 billion
dollars of extra spending cuts
© AFP/File Jewel Samad

AFP

WASHINGTON (AFP) - A dramatic 11th-hour deal slashing spending has staved off a US government shutdown, ending a rancorous budget row between President Barack Obama and his newly empowered Republican foes.

Party leaders clinched the agreement, including some $38.5 billion dollars of extra spending cuts, after intense bargaining, barely an hour before the federal government effectively ran out of money at midnight Friday.

The showdown was just the first bruising engagement in a string of likely clashes between Obama and Republicans boosted by a new crop of conservative Tea Party lawmakers, as the president fires up his 2012 reelection bid.


Obama boasted in remarks at the White House that cooperation born of difficult compromises had yielded "the biggest annual spending cut in history" at a time when Washington faced a projected annual shortfall of $1.65 trillion.


"Some of the cuts we agreed to will be painful. Programs people rely on will be cut back. Needed infrastructure projects will be delayed," the president said.

He continued to sell the deal to the public on Saturday, saying in his weekly radio address that "beginning to live within our means is the only way to protect the investments that will help America compete for new jobs."

House Speaker John Boehner told his restive Republican caucus behind closed doors he had sealed an agreement with the White House to fund the government for the rest of the fiscal year ending October 1.

"This has been a lot of discussion and a long fight. But we fought to keep government spending down because it really will, in fact, help create a better environment for job creators in our country," he told reporters afterwards.

Lawmakers in both chambers raced to approve a stopgap funding measure before midnight to give negotiators until Thursday to finalize the overall deal.

The Senate passed it by voice vote, the House by a 348-70 margin at 12:39 am (0439 GMT) Saturday.

"It's been a gruelling process. We didn't do it at this late hour for drama. We did it because it has been hard to arrive at this point," said Democratic Senate Majority Leader Harry Reid, his party's lead negotiator.

Anticipating a possible insurrection, Boehner told Republicans "this is the best deal we could get out of them," according to two officials who attended the emotional gathering.

Republican Representative Marsha Blackburn wept about the possible impact of spending cuts on a military base dear to her district, a witness said. Another came from a formal event still in black tie. Another wore a ball gown.

The agreement came after a long day in which Republican leaders parried every question with a "no deal" up to three hours before the deadline, despite telephone discussions between Obama and Boehner.

Participants nervously alluded to 1995, when the US government last plunged into a shutdown caused by a funding row, and Bill Clinton outmaneuvered his Republican foes and rescued a sagging presidency.

"We had an opportunity tonight to decide whether we wanted to repeat history or make history. We decided to make history," said Republican Senate Minority Leader Mitch McConnell.

Obama had warned that a prolonged government shutdown could jeopardize America's slow recovery from the worst economic crisis since the 1930s Great Depression.

A shutdown would have seen around 800,000 federal employees temporarily laid off, paychecks for frontline combat soldiers delayed and national parks and monuments closed.

But operations vital to national security such as the war in Afghanistan and border services would have gone on as normal.

McConnell wasted little time signalling that Republicans would do battle with Obama on his request to raise Washington's ability to borrow -- an issue that has inflamed the Tea Party.

"Senate Republicans and House Republicans -- and I hope many Democrats as well -- are going to say 'Mr President, in order to raise the debt ceiling we need to do something significant about the debt,'" he said.

The overall spending accord removed what Democrats had described as the biggest obstacle to a deal: A Republican-crafted measure stripping federal funding from the Planned Parenthood clinics that provide abortions.

Obama canceled a planned trip to Indiana on Friday to stay in Washington and see the final push to the end. He also called off a weekend away with his family in the historic Virginia city of Williamsburg.

© AFP -- Published at Activist Post with license

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Don't Believe the False Budget Arguments (Video)

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http://www.wideawakenews.com/
http://www.moneynews.com/StreetTalk/Laurence-Kotlikoff-Fiscal-Meltdown/2011/0...
http://www.usatoday.com/money/companies/management/2011-03-31-ceo-pay-2010.htm

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Ratigan to Ron Paul: 'Don't You Have an Obligation to Run for President?' (Video)

Activist Post

Ron Paul appears with Dylan Ratigan on April 5th, 2011 to discuss the budget cut debate and foreign policy.  Paul says the budget debate is a joke and "nothing compared to the calamity that we face."  Ratigan, as if pleading with Paul at the end of the interview, asks "Don't you have an obligation to run for President?

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US Republicans vow steep long-term spending cuts

Editor's Note: "Ryan's plan would privatize the Medicare health program for older Americans, giving beneficiaries vouchers to pay for care." Of course it will.  Using a "crisis" to transfer more taxpayer funds to private cartels.

Republican Representative Paul Ryan
© AFP/File Jim Watson

AFP

WASHINGTON (AFP) - President Barack Obama's Republican foes, warning the debt-heavy US economy is headed for collapse, unveiled a plan on Tuesday to slash government spending by $6 trillion over the next decade.

Republican Representative Paul Ryan, the chairman of the House of Representatives' Budget Committee, showcased the party's "Path to Prosperity" as a direct rebuke to what he denounced as Obama's free-spending ways.

"The United States is heading toward a debt crisis," Ryan said in a slickly produced video on his committee web site. "We face a crushing burden of debt, which will take down our economy, and will lower our living standards."
"That doesn't have to be our future," said Ryan, whose blueprint calls for cutting tax rates faced by corporations and the richest Americans while curbing spending on health and retirement programs for the poor and elderly.


Ryan said his plan would cut some $4 trillion from US deficits over the next ten years and roll back all manner of regulations that Republicans -- who have ruled out tax increases as a way to balance the books -- charge stifle growth.

The pitched political battle over government spending and regulations -- on everything from the environment to consumer protections to health care to new rules on the financial industry -- is sure to shape Obama's 2012 reelection bid.

Facing Democratic charges that the blueprint guts help for the neediest to swell the wallets of the wealthiest, the Wisconsin lawmaker warned Washington has "zero hope" of getting spending under control without making hard choices.

But even with support from Republican leaders, the plan faced an uphill political battle -- it faced almost certain doom in the Democratic-led Senate and could rile elderly voters, a hugely powerful voting bloc.

Ryan's plan would privatize the Medicare health program for older Americans, giving beneficiaries vouchers to pay for care, and turn the Medicaid health program for the poor from a partnership between Washington and the states into block grants from the federal government.

Critics have charged that the Medicare approach is a recipe for cost controls by rationing care, and that the Medicaid plan would starve states of cash if an economic downturn forces more people to seek shelter in that program.

© AFP -- Published at Activist Post with license

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US to reach debt limit by May 16: Treasury

"Default would cause a financial crisis potentially more severe than the crisis from which we are only now starting to recover," Geithner said. He warned that military pay, social assistance payments and tax refunds could be among the first things to be blocked.

US Treasury Department said US likely to hit
$14.29 trln debt limit sooner than thought
© AFP/File Karen Bleier

AFP

WASHINGTON (AFP) - The United States is likely to hit its $14.29 trillion debt limit sooner than thought, the Treasury Department said Monday, pressuring lawmakers to raise the ceiling or face a possible government default.

"The Treasury Department now projects that the debt limit will be reached no later than May 16, 2011," the Treasury said.

The department previously estimated it would hit the ceiling by May 31.

If it is not raised, the United States would only have weeks before it runs out of cash to pay its bills, according to government estimates.
"Increasing the limit is necessary to allow the United States to meet obligations that have been previously authorized and appropriated by Congress," Secretary Timothy Geithner said in a letter to lawmakers.


He warned that military pay, social assistance payments and tax refunds could be among the first things to be blocked.

"Default would cause a financial crisis potentially more severe than the crisis from which we are only now starting to recover," Geithner said.

The warning came as US lawmakers battle over how to cut spending and trim the budget deficit.

Although the issues of extending the debt ceiling and balancing the budget are not linked, they have become enmeshed thanks to Washington's political deal-making.

The debt ceiling became a hot-button issue after Republicans took control of the US House of Representatives in early January, leaving Obama's Democrats only in control of the Senate.

© AFP -- Published at Activist Post with license

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