ABC News’ John R. Parkinson (@JRPabcDC) reports:
It’s been described as a calamitous threat to the nation’s economic security that could spook investors across the globe, sending the financial markets into chaos while pushing America into another deep recession.
Just 20 days from now, if the country’s top politicians cannot reach an agreement to raise the debt ceiling the United States of America could be the next Greece: Dead broke.
If the federal government defaults on its debt obligations, economists caution that 401Ks could be destroyed. President Obama even sounded the alarm that Social Security checks might not go out in the mail if the bipartisan discussions end in a stalemate.
As the top leaders in Congress prepare to rendezvous Wednesday evening at the White House for the fourth straight day to update the president on the progress of the talks, the leaders bargaining at the Cabinet Room table in the West Wing openly concede the seriousness of inaction.
“I agree with the president we cannot allow our nation to default on our debt,” House Speaker John Boehner said Monday.
“Whether we raise the debt ceiling is a mathematical, absolute urgency,” House Minority Leader Nancy Pelosi agreed Tuesday.
But who’s to blame for this mess?
As leaders struggle to find enough common ground to pass a bill through the House of Representatives while meeting the president’s requirement to pass an extension that keeps the nation’s credit in good standing until 2013, Washington is rife with finger pointing as Democrats and Republicans alike blame each other for digging the country into a deep deficit while distancing themselves from potentially toxic debt limit ownership.
On Tuesday, John Boehner placed the responsibility to strike a deal at the feet of the president.
“We passed our budget back in the spring, outlined our priorities,” Boehner, R-Ohio, said of the GOP’s Path to Prosperity budget created by Budget Chairman Paul Ryan. “Where's the president's plan? When's he going to lay his cards on the table? This debt limit increase is his problem.”
The White House reacted to Boehner’s prodding for presidential leadership by deflecting the duty back to the Congressional leaders to figure out how to finish a deal.
“As the President has said, ‘If not now, when?’” White House press secretary Jay Carney said in a statement Tuesday night. “It is time for our leaders to find common ground and reduce our deficit in a way that will strengthen our economy.”
House Republicans, meanwhile, are critical of recent spending championed by Democrats and the Obama administration.
“The American people know we have a debt crisis, not because they are under-taxed, it's because this president and previous Democratic Congresses have spent too much,” House Republican Conference Chairman Jeb Hensarling, R-Texas, said. “We look at the government takeover of our health care — over $1 trillion. The president's failed stimulus plan — $1.2 trillion with interest.”
House Minority Whip Steny Hoyer explained the history of the deficit by blaming the George W. Bush administration for racking up an ample portion of the total debt.
“It is clearly not the President's fault,” Hoyer, D-Maryland, told reporters at his pen and pad briefing Tuesday. “Almost every honest economist and observer points out that the debt we are confronting has largely been incurred under Republican administrations, most recently the Bush administration, which took the debt from a debt of $5.728 trillion to a debt of $10 trillion, almost double the debt, something like an 87 percent increase.”
But Congress has the constitutional power of the purse, and the leaders involved in the negotiations, including President Obama and Vice President Biden, have all been in the majority at some point, and have also voted to increase the statutory debt limit during their careers.
“President Bush was president and we were in the majority,” Pelosi said. “I voted, I think, at least five times to raise the debt limit.”
Hoyer, the No. 2 Democrat in the House, pointed out that Boehner voted to increase the debt limit eight times during his career (four times during the Clinton administration and four times during the George W. Bush administration) while Cantor has voted to do it four times since taking office in 2001.
Still, as the country is on the brink of another financial catastrophe, Hoyer, a 16-term congressman, reminded reporters that Democrats always kept the cash flowing when they were in charge.
“In the past when we were in charge, we made sure that we in fact kept the creditworthiness of the United States of America in place,” Hoyer said. “[Republicans] were given the responsibility by the American people to lead the House of Representatives. The American people expected responsibility.”
Boehner says he is still optimistic that a bipartisan deal can pass, but he admits that it will take a considerable number of Democratic votes to help pass it through because a strong contingency of House Republicans object to increasing the debt limit simply on principle. Plus, any bill that goes through the House has to go through the Democratic Senate unchanged, creating the necessity for balance and increasing the difficulty to find a formula that can succeed.
“I was born with a glass half-full. I'm the optimist. I'm going to continue to be the optimist, that we can do the right thing for the country,” Boehner said. “Washington has a spending problem. We don't have a revenue problem.”
Boehner has compared the difficulty in striking the right balance as similar to solving a Rubik’s Cube. Making Boehner’s task even more difficult is quite possibly the GOP’s landslide victory last year when Tea Party freshman defeated almost all of the moderate Blue Dog Democrats. As a result, the Democratic Caucus is considered more progressive and liberal than the 111th Congress while the new House Republican Conference is perceived as more conservative – only creating a wider gap for leaders to bridge.
Congressional insiders suggest anywhere from 60-100 House Republicans will outright oppose any deal leaders come up with. Even more could abandon Boehner’s boat depending on what’s in the deal – assuming leaders devise legislation to bring to the floor for a vote in time to meet the Treasury’s August 2 deadline. Depending on what happens to entitlements, a greater number of Democrats have pledged to oppose the deal.
Some of those House Republicans who will oppose an increase regardless of the details in the package are not so sure the leaders will be able to pass a deal through both chambers of Congress.
In case the government actually does default, Reps. Steve King of Iowa, Louie Gohmert of Texas and Republican presidential candidate Michele Bachmann of Minnesota will introduce a contingency plan that prioritizes funding to first pay for troops and secondly pay down interest on the country’s debt.
As the clock ticks down to the debt limit deadline, the divided Congressional leaders will meet once again Wednesday evening and resume the legislative staring contest in the Cabinet Room of the West Wing. The president says they’ll meet every day until a deal is reached.
So who will blink first?