Issue link: https://www.epageflip.net/i/36626
Debt talks: Dire warnings, a possible compromise? 7A Friday, July 15, 2011 – Daily News WASHINGTON (AP) — With time growing short and warnings more dire, the first, fragile signs emerged Thursday of a possible compromise to raise the nation’s debt limit and avert a potentially catastrophic default on Aug. 2. Under a plan discussed by the Senate’s top two leaders, President Barack Obama would receive enhanced authority to raise the debt ceiling at the same time pro- cedures would be set in motion that could lead to federal spending cuts. Word that Majority Leader Harry Reid, D-Nev., and Republi- can leader Mitch McConnell of Kentucky were at work on the fall- back plan came as Obama and congressional leaders held a fifth straight day of debt-crisis talks at the White House. McConnell pronounced the session a good one. ‘‘We’re going to continue to discuss a way for- ward over the next couple of days and see what happens,’’ he said. Obama was having his say on Friday, scheduling his second White House news conference of the week. House Republicans and Democrats scheduled closed-door meetings of the rank and file to review the spending cuts and tax increases proposed by one side or the other so far. After weeks of political tur- moil, it appeared attempts to avoid a default were proceeding along two tracks — the White House negotiations that appeared near an end, and the fallback that officials said privately presented the stronger opportunity to avert a cri- sis. One Republican, speaking on condition of anonymity, said that in the White House talks so far, negotiators had agreed on about $1.5 trillion in deficit cuts, far less than the $2.4 trillion or so needed to meet Obama’s demand that the debt limit go up enough to tide the Treasury over through the 2012 elections. A summary that House Major- ity Leader Eric Cantor, R-Va., pre- pared for the talks earlier in the week showed the bulk of cuts coming from day-to-day operating budgets of federal programs. Also included were as much as $245 billion from Medicare, including higher premiums for wealthier beneficiaries, and addi- tional savings from skilled nursing homes and home health care. The summary indicated that federal workers would pay more for their pensions, agriculture subsidies would be cut and food stamp spending would be restrained. Two officials said Cantor did not speak during the day’s session, after irritating Obama on Wednes- day by repeatedly proposing a short-term debt limit increase the president has vowed to veto. Attempts by Democrats to include higher taxes were rejected by Republicans, as expected. One Democratic official said GOP negotiators declined to con- sider closing corporate tax loop- holes in order to pay for a one-year extension of the payroll tax cut approved last winter. The day’s events were shad- owed by warnings from Federal Reserve Chairman Ben Bernanke and JPMorgan Chase CEO Jaime Dimon. Speaking separately, the two men admonished bickering lawmakers that failure to avoid an unprecedented default could have a devastating effect on an already anemic U.S. economy. Adding to the urgency, Moody’s Investor Service has announced it is reviewing Ameri- ca’s bond rating for a possible downgrade. In a separate announcement, the credit rating agency Standard & Poor’s warned that there is a 50 percent chance it will downgrade the government’s credit rating within three months because of the impasse. There was growing concern overseas, too. A Chinese rating agency, Dagong Global Credit Rating Co., also advised of a pos- sible downgrade, and Chinese Foreign Ministry spokesman Hong Lei said: ‘‘We hope that the U.S. government adopts a respon- sible policy to ensure the interests of the investors.’’ It was unclear when McConnell and Reid might unveil their legislation, or whether they would first present their ideas to Obama and others involved in the daily meetings at the White House. McConnell said the plans had not been discussed in depth at Thursday’s White House session, which lasted less than 90 min- utes. One option under discussion by the Senate leaders is creation of a group of lawmakers who could recommend spending cuts, possibly including changes in benefit programs, that would be guaranteed a yes-or-no vote in Congress. COMFORT SERVICE INC. 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Eligibility ❖ Applicant must be 501(C)(3) nonprofit organization or have a fiscal agent that is 501(C)(3) and capable of administering the project’s funds; ❖ Project or program must be a response to the health priorities identified by the hospitals’ Community Health Needs Assessment or benefit plan; and ❖ Project to be funded must involve collaboration with other organizations and/or with a CHW hospital in your community. To request registration information call or e-mail Kristin Behrens @ (530) 529- 8038 or kristin.behrens@chw.edu