The RP’s Budget Crisis Update- July 26

In dueling speeches in primetime Monday, President Obama and Speaker Boehner reinforced their positions on the debt ceiling debate, with the President criticizing overly-steadfast Republicans for their intransigence (though he assigned blame to both parties) and the Speaker continuing his push against revenue increases. As part of his 15-minute speech, President Obama encouraged American to contact their representatives and urge them to compromise on a debt agreement. Shortly after the speech, several Senate and House member websites were overloaded. [Politico]

President Obama, in speaking on the debt debate, notably refrained form using the word “veto” on Monday, moving away from his earlier threats to veto any plan that did not extend the debt ceiling through the end of 2012. It has been speculated that the President may now believe that he will have to accept any deal that manages to pass both houses of Congress. [National Journal]

National Journal has compiled a list of consequences if the United States fails to raise its debt ceiling. Among them: stock markets around the world are likely to tank, government programs including food stamps and Pell Grants face spending cuts by 40 to 45 percent, economic recovery would slow drastically or reverse, Social Security checks may or may not be released, the US’s credit rating could be cut to as low as D, and businesses across the country run the risk of total failure. [National Journal]

One common factor of the plans put forth by Speaker Boehner and Majority Leader Reid is the “Super Congress,” a bipartisan commission with extraordinary power to craft debt and budget legislation. In both cases, the Tea Party faction of the Republican Party finds the proposal unacceptable, while left-leaning groups such as MoveOn.org are criticizing the plan for its intent to make cuts to entitlement programs. [Huffington Post]

Additionally, the Boehner plan has received criticism from fiscal conservatives who feel that it is a step back from Cut, Cap, and Balance and the Balanced Budget Amendment. Majority Whip Kevin McCarthy of California has declined to say whether the Boehner plan has a support of the majority of the House Republican caucus. [The Hill]

Reuters has put together a concise comparison of the Boehner and Reid debt-reduction plans. [Reuters]

One of the biggest sticking points on the debt debate is whether troop drawdowns in Iraq and Afghanistan count as part of a deficit reduction plan, with Democrats including Senate Majority Leader Harry Reid arguing that it does and Republicans including House Majority Leader Eric Cantor claiming it does not, even though Representative Paul Ryan’s plan earlier this year took the same tack as Reid. [Huffington Post]

The House Rules Committee has posted the content of the Boehner deal on its website and scheduled a hearing for Tuesday afternoon at 3 p.m. [House Rules Committee]

In Congressional debt ceiling negotiations, House Majority Leader Eric Cantor has been leading the charge to push back against the Obama Administration’s desire to hit hedge funds and private equity firms with higher taxes. [Washington Post]

According to Standard & Poor, the Boehner plan may still trigger a lowering of the US’s AAA credit rating. The agency says that such a move would likely be viewed as a “Band-Aid” that would not assure the country’s financial stability for a long enough period to avoid the downgrade. [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.”