|Tuesday, August 02, 2011 – Robert Lang and Associated Press|
|President Barack Obama has signed legislation to increase the nation’s borrowing authority and avert a potentially catastrophic government default.Obama signed the bill privately in the Oval Office little more than an hour after the Senate voted final passage.
Maryland Democratic Senators Barbara Mikulski and Ben Cardin voted in favor of the bill.
Obama says the emergency bill Congress passed to prevent a government default is just the first step to ensuring the country lives within its means.
Speaking in the Rose Garden, Obama says lawmakers still need to find a balanced approach to reducing the deficit that includes some adjustments to Medicare and reforming the tax code so the wealthy pay more.
Obama spoke shortly after the Senate passed the bill to raise the debt ceiling and avert a potentially catastrophic default. The House approved the bill Monday.
The White House says Obama will sign the bill as soon as it lands on his desk.
Tuesday’s vote capped an extraordinarily difficult Washington battle pitting tea party Republican forces in the House against Obama and Democrats controlling the Senate. The resulting compromise paired an essential increase in the government’s borrowing cap with promises of more than $2 trillion of budget cuts over the next decade.
Much of the measure, which the House passed Monday night, was negotiated on terms set by House Speaker John Boehner, including a demand that any increase in the nation’s borrowing cap be matched by spending cuts. But the legislation also meets demands made by Obama, including debt-limit increases large enough to keep the government funded into 2013 and curbs on growth of the Pentagon budget.
“We’ve had to settle for less than we wanted, but what we’ve achieved is in no way insignificant,” said Senate GOP leader Mitch McConnell of Kentucky. “But I think it was the view of those in my party that we’d try to get as much spending cuts as we could from a government we didn’t control. And that’s what we’ve done with this bipartisan agreement.”
Many supporters of the legislation lamented what they saw as flaws and the intense partisanship from which it was forged. In the end, it was a lowest-common-denominators approach that puts off tough decisions on tax increases and cuts to entitlement programs like Medicare.
“What troubles me about it is that the bipartisan compromise also represents a kind of bipartisan agreement by each party to yield to the other party’s most politically and ideologically sensitive priority,” said Joseph Lieberman, I-Conn. “In the case of Democrats, it’s to protect entitlement spending. … In the case of Republicans, it’s to not raise taxes.”
The measure would provide an immediate $400 billion increase in the $14.3 trillion U.S. borrowing cap, with $500 billion more assured this fall. That $900 billion would be matched by cuts to agency budgets over the next 10 years.
The Senate vote was never in doubt after Majority Leader Harry Reid, D-Nev., and McConnell signed on. But like Monday’s House vote, defections came from liberal Democrats unhappy that Obama gave too much ground in the talks, as well as from conservative Republicans who said the measure would barely dent deficits that require the government to borrow more than 40 cents of every dollar it spends.
“This is a time for us to make tough choices as compared to kick the can down the road one more time,” said freshman GOP Sen. Jerry Moran of Kansas.
The measure sets up a fall drama that promises to again test the ability of Obama and Republicans to work cooperatively. It establishes a special bipartisan committee to draft legislation to find up to $1.5 trillion more in deficit cuts for a vote later this year. They’re likely to come from such programs as federal retirement benefits, farm subsidies, Medicare and Medicaid. The savings would be matched by a further increase in the borrowing cap.
There’s no guarantee the committee, to be evenly split between the warring parties, will agree on such legislation. But there are powerful incentives to do so because more budget gridlock would trigger a crippling round of automatic cuts across much of the budget, including Pentagon coffers.
And questions linger about the effect the grueling political free-for-all will have on the U.S. credit rating.
Treasury Secretary Timothy Geithner told ABC News that he didn’t know whether the debt-limit fight would cause America’s AAA credit rating to be downgraded. “It’s not my judgment to make,” he said. Geithner also said he fears world confidence in the United States was damaged by “this spectacle.”
Enactment of the measure provides welcome closure for Obama, who has seen his poll numbers sag during the debt-limit battle.
GOP presidential candidates such as Mitt Romney and Michele Bachmann issued statements opposing the legislation.
“As with any compromise, the outcome is far from satisfying,” Obama conceded in a video his re-election campaign sent to millions of Democrats.
In a tweet, the president was more positive: “The debt agreement makes a significant down payment to reduce the deficit – finding savings in both defense and domestic spending.”
Statement from U.S. Senator Barbara Mikulski
“Make no mistake, this agreement is stark and stern, but necessary.”
“Through serious negotiation, leaders from both parties and the President have reached a bipartisan solution that will lift our debt ceiling and prevent a downgrade of our credit.
“Make no mistake. This agreement is stark and stern but necessary. It includes cuts that I would have never voted for under different circumstances. However, if we had failed to take action, the economy of the United States would have been irrevocably fractured.
“While it’s far from perfect, the agreement meets my principles for avoiding default and downgrade. It provides a long-term extension of the debt ceiling, a significant down-payment on cuts, and a path forward to reform tax earmarks and entitlements.
“A default and downgrade would lead to sky-high interest rates that would have created a new tax on every single American. The economy would be further weakened, and it would be a self-inflicted wound. I cannot allow this to happen.
“I took an oath to protect and defend the Constitution. The 14th Amendment says that the validity of America’s debt must not be questioned. While the lawyers made the interpretation complicated, the framers made it simple. America pays its debt with no exceptions. Failure to reach an agreement would be a violation of trust to the American people and our creditors. And it would violate my oath to the Constitution.
“America must meet its obligations to its creditors. We must also meet our obligations to each other. Throughout this debate, I have insisted on no benefit cuts to soldiers, seniors and veterans and will continue to do so. Obligations made must be obligations kept.
“I will also fight to fulfill our obligations to the next generation who will lead us through the 21st Century. We need to rebuild roads, bridges and increase access to broadband to create jobs and rebuild our economy. We need to invest in higher education, science, research and technology that lead to jobs of the future. We can’t afford not to make these investments.
“After wrenching analysis, I will vote in favor of this bipartisan agreement because it is an achievable and pragmatic solution to the crisis that would be caused by inaction. It will require tough action and strong medicine down the road, but it is necessary to honor our obligations to our creditors and to ourselves.”
Statement from U.S. Senator Ben Cardin
“This budget crisis has already harmed our nation and could have been avoided. Unfortunately, a few Republican lawmakers have held our economy hostage, playing a dangerous game with the full faith and credit of the United States. The American people made it clear that they want us to work together to find a bipartisan solution to avoid default. They have urged us – through Facebook, twitter, phone calls, e-mails and letters — to provide certainty to the markets, our creditors, as well as our soldiers fighting overseas, seniors depending on Social Security, small businesses relying on affordable credit, and working families struggling to keep up payments on credit cards.
“The resulting agreement is far from perfect, but it is a positive step forward by raising the debt ceiling through 2013, providing important stability to the American people and the financial markets. Short-term proposals would have continued to harm our economy and likely would have brought about a rerun of the latest partisan episode. The agreement provides for nearly $1 trillion in deficit reduction during the next 10 years. But importantly, it protects domestic priorities by allowing more than $40 billion in discretionary domestic spending next year than the Republican budget that passed the House. The agreement also calls for at least an additional $1.2 trillion in deficit reduction to be agreed to later this year. The failure to enact these additional reductions would trigger across-the-board cuts. The package balances these cuts equally between defense and domestic programs, and – a very important point – it protects Social Security and Medicare beneficiaries.
“However, I remain concerned that this ‘compromise’ may not provide appropriate balance to solving our long-term deficit and debt problem. I’m also troubled by the lack of additional revenue measures, including closing tax loopholes for millionaires and subsidies for oil companies already making record profits.
“We have a responsibility to act. Default on our debt for the first time in our nation’s history is not an option. Our leaders have negotiated a bipartisan compromise. Now that it has passed the Congress, we must turn our attention to creating jobs and strengthening our economy.”