The RP’s Budget Crisis Update- July 25, Part 2

It’s been a busy day for debt and budget negotiations in Washington, enough to justify a second round of budget crisis updates from The Recovering Politician:

President Obama has endorsed Harry Reid’s plan to cut $2.7 trillion from the budget without raising revenues, a major departure from his earlier insistence that any debt deal include significant revenue increases, though the Reid plan does fulfill his desire to have the debt ceiling raised enough to get the US through the 2012 election cycle. White House Press Secretary Jay Carney praised the plan for cutting responsibly and removing default-related uncertainty from the coming year. [Politico]

Speaker Boehner has released the details of his debt-reduction plan to House Republicans. The proposal includes a two-step process that will cut spending by $3 trillion over the next ten years without raising taxes. It also includes the temporary debt ceiling increase that President Obama and Congressional Democrats have balked at in the past. [The National Review]

The International Monetary Fund has weighed in on the United States debt crisis, echoing the sentiment that getting spending under control, and more immediately, raising the debt ceiling, are necessary for the continued economic health of the US and the rest of the world. The IMF supported proposals that include spending cut and revenue increase triggers should Congress fail to act in a timely manner. [The Hill]

In spite of extensive testimony to the contrary, Representative and candidate for President Ron Paul has said that a default is the best thing that could happen to the United States. He cites past credit defaults as evidence that a default in 2011, though harmful to the US economy, would not be calamitous. [National Journal]

The Boehner budget proposal is being referred to as a victory for the Tea Party, since it includes no revenue increases, a two-tier raising of the debt ceiling, and a vote on a balanced budget amendment. Though not a complete rehash of the Cut, Cap, and Balance bill, this budget would require a vote on a Constitutional amendment during 2012. [Huffington Post]

Massachusetts Democratic Representative Edward Markey has accused House Republicans, and Speaker Boehner in particular, of trying to harm the US economy in hopes of pinning the blame on President Obama. [The Hill]

Democratic sources have confirmed that Harry Reid’s $2.7 trillion deficit reduction plan does not touch entitlement benefits in any way. This further differentiates his plan from Speaker Boehner’s and is likely to shore up support among Democrats who were unhappy that President Obama had expressed a willingness to put entitlement programs on the table as part of a debt deal. [Huffington Post]

Still confused as to what all of this means?  Want to find out how you can have your voice heard on this issue?  Click here to read The RP’s “Debt Ceiling for Dummies.”