How Do You Solve A Problem Like The Debt Ceiling?

United States Mint/Wikimedia Commons

By MICHAEL FALCONE ( @michaelpfalcone ) and AMY WALTER ( @amyewalter )


  • LEW FOR TREASURY: President Obama today will name his current chief of staff, Jack Lew, to serve as the nation's next treasury secretary, replacing Timothy Geithner, the White House announced. "Jack Lew will bring an impressive record of service in both the public and private sectors for over three decades, and economic expertise, to this important role, and his deep knowledge of domestic and international economic issues will enable him to take on the challenges facing our economy at home and abroad on day one," a White House official said. "Throughout his career, Jack Lew has proven a successful and effective advocate for middle-class families who can build bipartisan consensus to implement proven economic policies." ABC's Mary Bruce reports that as chief of staff for the past year and budget director before that, Lew has been intimately involved in the negotiations with Congress on the debt ceiling, averting a government shutdown and the fiscal cliff. It may be experience that will come in handy as he heads into several months of tough fiscal negotiations with congressional Republicans.
  • SOLIS STEPS DOWN: Secretary of Labor Hilda Solis has stepped down. The first Latina to lead a federal agency, Solis joined the Obama administration back in 2009 after representing California in the House of Representatives. She said in a letter to colleagues that she was leaving her post to "begin a new future" by returning to her roots. She calls her departure "one of the most difficult decisions" she has made. "Growing up in a large Mexican-American family in La Puente, California, I never imagined that I would have the opportunity to serve in a president's Cabinet, let alone in the service of such an incredible leader," said Solis. … Solis was the first Hispanic woman to serve in a presidential cabinet.
  • CABINET SHUFFLE: OBAMA ASKS THREE TO STAY: After the departures of Hillary Clinton, Timothy Geithner, Leon Panetta, Lisa Jackson, and Hilda Solis, ABC's Jonathan Karl reports: There's nothing unusual about 2nd term cabinet changes, of course, and there may be more to come. But a senior White House official tells me that at least three other cabinet secretaries have been asked to stay as the President begins his second term: Attorney General Eric Holder, HHS Secretary Kathleen Sebelius, and VA Secretary Eric Shinseki.


Trillion dollar coins? Invoke the 14th Amendment? Impose the "Boehner Rule"? Just raise it?

Seems like everyone's got an idea about what to do about the impending debt ceiling crisis, but we're a long way from a solution.

ABC News' Jonathan Karl reported that White House Press Secretary Jay Carney flatly ruled out negotiations with Congress over raising the ceiling, telling reporters yesterday, "There is no Plan B. There is no backup plan. There is Congress's responsibility to pay the bills of the United States."

Karl notes that some have suggested President Obama could invoke the 14th Amendment to the Constitution, which states, "the validity of the public debt of the United States … shall not be questioned" and ignore the debt ceiling altogether.

But Carney demurred: "We just don't believe that it provides the authority that some believe it does," he said.

And in his Wall Street Journal column this morning, Republican strategist Karl Rove argued that Republicans should stick with the so-called "Boehner Rule," which as Rove notes, "requires matching any debt increase dollar for dollar with spending cuts."

"House Republicans must pass a measure pairing specific spending cuts with a debt-ceiling increase that will have few, if any, Democratic votes. It would therefore be tactically wise for Republicans to draw many of these cuts from the recommendations of Mr. Obama's own National Commission on Fiscal Responsibility and Reform (aka Simpson-Bowles). It would be even better if much of the savings were achieved by moderating future spending increases or freezing outlays, rather than reducing them from today's levels."

Meanwhile, back at the White House, Carney did not rule out minting trillion dollars coins if Congress fails to act, saying "you could speculate about a lot of things."

"Nothing needs to come to these kinds of … speculative notions about how to deal with a problem that is easily resolved by Congress doing its job, very simply," he said.


ABC's AMY WALTER: For all the hand-wringing over the lack of diversity in the Obama Administration's second term Cabinet, Democrats should really be more depressed about the fact that their potential 2016 field is a lot less diverse than the GOP's. Take away Hillary Clinton, and the Democratic bench looks more like that picture in the New York Times' than it does the picture of Obama's 2012 voting coalition.

ABC's RICK KLEIN: Look left. Gov. Andrew Cuomo's State of the State address garnered headlines for his gun control plans, but that's just the start. In putting forward New York State as a "progressive beacon of light to the rest of the nation," with tighter greenhouse gas caps and loosened marijuana laws among a host of other proposals, Cuomo is staking out liberal - yes, liberal - ground. It's an intriguing piece of positioning for a man who came into office battling with public-employee unions and avoiding national storylines. The truth is few Democrats know what the post-Obama era will hold for their party, but a few prominent party leaders are trying to find out.


-GETTING BIBLICAL: ABC's Devin Dwyer reports: The Presidential Inaugural committee announced today that President Obama will use two bibles for his swearing in-one owned by Martin Luther King, Jr. and one by Abraham Lincoln. In 2009, he used the Lincoln bible. No word on whether either will be open to a specific passage. From the Presidential Inaugural Committee release: "President Obama is honored to use these Bibles at the swearing-in ceremonies," said Steve Kerrigan, President and CEO of the PIC. "On the 50th anniversary of the March on Washington and 150th anniversary of the Emancipation Proclamation, this historic moment is a reflection of the extraordinary progress we've made as a nation."

-ABC ANNOUNCES EXTENSIVE RADIO COVERAGE. ABC News Radio Correspondent Aaron Katersky will anchor live coverage of President Obama's Second Inaugural starting at 11:00a.m.ET on Sunday, Jan. 20 with the president's official swearing-in ceremony at the White House. ABC News Radio's team of correspondents - Ann Compton, Vic Ratner, Steven Portnoy and Andy Field - will contribute on-the-ground-reporting and analysis. On Monday, Jan. 21, Sam Donaldson will report on the swearing-in of Barack Obama from the steps of Capitol Hill; and Trey Hardin and Steve Roberts will provide insight from ABC News Headquarters in Washington, D.C. ABC News Radio will provide live, anchored coverage of the inaugural ceremony on Monday between 11:00a.m.-1:00p.m.ET, along with President Obama's greetings to the crowd between 2:00p.m.-3:00p.m.ET.


with ABC's Chris Good ( @c_good)

BIDEN INCLUDES NRA, WAL-MART IN GUN MEETINGS. ABC's Arlette Saenz reports: Vice President Joe Biden will start day two of this week's meetings on gun violence Thursday, and the participants in the latest round of talks will include two powerhouses in the gun industry - the National Rifle Association and Wal-Mart, one of the largest sellers of firearms in the country. Spokesmen for the NRA and Wal-Mart confirmed representatives from their organizations will be included in the meetings Thursday. Advocates for sportsmen, women's groups, wildlife groups and gun owners will also be there. The vice president is slated to meet with members of the entertainment industry in the evening. James J. Baker, the NRA's top lobbyist, will attend the meeting on behalf of the organization. The NRA called for armed officers to be placed in every school after the massacre at Sandy Hook Elementary School in Newtown, Conn. in December. "We are sending a representative to hear what they have to say," Andrew Arulanandam, a spokesman for the NRA, said.

EXECUTIVE ACTION ON GUN CONTROL? Vice President Biden suggests it's a possibility. The Hill's Amie Parnes writes: "President Obama will likely take executive action in an effort to tamp down the recent rash of gun violence, Vice President Biden said Wednesday. 'The president is going go act,' said Biden, who is conducting meetings all week on gun control. 'There are executive orders, executive action that can be taken. We haven't decided what that is yet, but we're compiling it all.' … It is unclear what specific executive orders Obama is contemplating, though one Democratic aide with insight into the talks said Obama could sidestep Congress and bolster federally funded mental-health programs."

MOVEON MEMBER LAUNCHES PETITION TO PUT BARNEY FRANK IN THE SENATE. Bloomberg's Don Frederick reports: "Barney Frank broke somewhat with traditional political decorum - such as that is-with his public pitch to fill the Massachusetts Senate seat that will come open upon Democrat John Kerry's expected confirmation by his colleagues as secretary of state … Frank's cause now is getting some active public support, courtesy of a petition drive started yesterday by Norfolk, Massachusetts, resident John F. Kelley, 63. Upon hearing of Frank's desire to follow his 32-year House career with a brief Senate stint, Kelley told us today that he thought to himself, 'There's got to be something we can do here' to help make that happen. So, as a member of the liberal advocacy group, Kelley launched his petition effort through the group's online platform, That means the petition will be sent to all Massachusetts MoveOn members, Kelley said. He also posted his pro-Frank push on his Facebook page."

OBAMA CABINET DIVERSITY: PICTURE SAYS 1,000 WORDS. The LA Times' Christi Parsons and Michael A. Memoli write: "Wednesday's 'photo of the day' on the White House website showed an unusual sight in Oval Office history - the president surrounded by top advisors, only half of whom are white men. The picture seemed calculated to counter criticism that President Obama's new set of Cabinet appointees so far all are white and male. … concerns still hover over the president as he attempts to craft a team that lives up to the diversity standards of his first term. Aides say Obama raised the point himself after United Nations Ambassador Susan Rice took herself out of the running for secretary of State. … Still, Obama's first round of appointments has been striking in its homogeneity. This week he nominated former Nebraska Sen. Chuck Hagel to serve as secretary of Defense and anti-terrorism advisor John Brennan to lead the CIA. Sen. John F. Kerry (D-Mass.) is slated to succeed Clinton at the State Department. … Aides complained that the photo wasn't representative. They prefer the day's photo, showing an Oval Office meeting involving Jarrett, DeParle and White House Counsel Kathryn Ruemmler."

NOTED: WHERE ARE THE WOMEN? Watch Jon Karl's "Good Morning America" report on the gender diversity in top White House positions:


-MAJOR DC CONSULTING FIRMS COMBINE FORCES. Gibraltar Associates, LLC, a leading public relations and public affairs firm founded in 2007, announced that it has combined with McBee Strategic Consulting, LLC, a top advisory company that started 10 years ago and represents global corporations, growth companies and institutional investors. The deal creates McBee|Gibraltar, a strategic communications business unit of McBee Strategic. According to a source familiar with the decision: "We met last year and realized that we were both innovating in the same direction. We needed to create a firm in a time where government risk is at an all-time high for business leaders and the failure to anticipate, shape, and adapt to Washington trend-lines can cost billions, but also that flawless execution in Washington can move markets, build brands, and strengthen company positions like never before. … This combination is the next step in our combined effort to bring additional tools to the fight for our clients and also a recognition that for companies to be successful in modern-day Washington requires not just killer advocacy or communications support but a suite of solutions that can support and maximize our clients political, policy, media, brand, and business interests in town."

-ENTERTAINMENT ANNOUNCED FOR 'GREEN' INAUGURAL BALL. Organizers of the 2013 Green Inaugural Ball, which will bring together leaders from the environment, energy and green technology sectors, announced musical guests for their Jan. 20 event today. Onree Gill, musical director for Alicia Keys and Cee Lo Green, will perform with his band and lead off the show at the Newseum. Sheila E., known for collaborating with Prince and Ringo Star, supports Global Green in their efforts to rebuild a green New Orleans. Mayer Hawthorne, whose music has been used in the hit show Ugly Betty and Kanye West's short film "We Were Once a Fairy Tale," will also perform Green Ball. And organizers say additional musical talent will be announced in the coming days. The ball is is sponsored by American Renewable Energy Institute, Defenders of Wildlife, Greenpeace, League of Conservation Voters, National Wildlife Federation, The Nature Conservancy, Oceana, Sierra Club, The Trust for Public Land and many others.


@morningmoneyben: 1600Penn looks pretty darn funny. Josh Gad is awesome. Totally blew me away as Elder Cunningham in Book of Mormon.

@jimgeraghty: Might be shorter to list the Lowcountry lawmakers who AREN'T running in South Carolina's special House election:

@jdickerson: To inject quick diversity & maintain drowsy feel of 2nd inauguration, admin. should swap inauguration entertainers with new cabinet picks.

@HotlineJosh: Sharp piece from @mikecatalini: Andrew Cuomo already making moves for 2016 presidential race …

@davidfrum: The right leader for the gun safety movement: former congresswoman Gabrielle Giffords. …

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