The opening of financial markets in East Asia is causing anxiety in official Washington and beyond. The concern is that a Friday night breakdown in talks between President Obama and House Speaker John Boehner on raising the debt ceiling may have negative repercussions when trading gets under way.
More meetings took place all day Saturday, first at the White House, then at the Capitol, seeking that elusive bipartisan deal.
The four top congressional leaders all showed up at the White House for a late Saturday morning meeting convened by President Obama; they all avoided contact with reporters afterward. The White House put out a statement reiterating Obama's opposition to a short-term extension of the debt ceiling, saying it would cause the country's credit rating to be downgraded. It was likely in response to reports that such a short-term deal had been floated at the meeting by the two Republican leaders, Senate Minority Leader Mitch McConnell and Boehner.
McConnell released a statement saying only that the bipartisan congressional leadership was committed to working on new legislation to prevent default. Late in the afternoon, Boehner hosted a meeting in his office, flanked by McConnell and Senate Majority Leader Harry Reid on his right and House Minority Leader Nancy Pelosi on his left. During a brief photo-op, Boehner blithely ignored reporters' questions.
The two Democrats in the meeting, Reid and Pelosi, had just released a statement saying they opposed any short-term fix for the debt ceiling crisis. The two emerged from the meeting nearly an hour later stony-faced and silent. Aides reported they were at an impasse and had no plans for further meetings. Boehner had earlier told fellow House Republicans in a conference call that he hoped to be able to issue what he called a "framework for progress" before the Asian markets opened. The sticking point appears to be the Republican leaders' insistence on a short-term deal to raise the debt ceiling. At the White House Friday evening, just after talks with Boehner had collapsed, Obama made clear he wanted to raise the debt ceiling high enough not to have to do it again before voters go to the polls next year.
"They can come up with any plans that they want, and bring them up here, and we will work on them," he said. "The only bottom line that I have is that we have to extend this debt ceiling through the next election, into 2013."
Boehner aligned himself with the president's stance on that issue when asked about it at the news conference he held Friday evening.
"I'm not really interested in a short-term increase in the debt limit," he said. "I believe that we have two challenges, that we have to increase the debt limit and we have to deal with our deficit and our debt."
But Boehner also made clear he was not backing down on the two conditions he's insisted on for raising the debt ceiling.
"Spending cuts ... must be greater than the increase in the debt limit, and no tax increases," he said.
In other words, all spending cuts and no new taxes to reduce deficits — an approach Obama and Democratic leaders say they cannot agree to. Still, the president said Friday he trusts the debt ceiling will be raised by the deadline a week from Tuesday.
"I am confident simply because I cannot believe that Congress would end up being that irresponsible that they would not send a package that avoids a self-inflicted wound to the economy at a time when things are so difficult," he said.
Boehner was similarly confident:
"No one wants to default on the full faith and credit of the United States government and I'm convinced that we will not," he said.
If that's to happen, a deal to raise the debt ceiling may have to be reached no later than Monday for Congress to enact it by the Aug. 2 deadline.
Sunday, July 24, 2011
Debt Talks Impasse Leads To Market Fears : NPR
Saturday, July 23, 2011
AFP: Former top US military officer John Shalikashvili dies
Former top US military officer John Shalikashvili dies(AFP) – 1 hour ago
WASHINGTON — Retired army general John Shalikashvili, the first foreign-born chairman of the US Joint Chiefs of Staff, died early Saturday of complications from a stroke, a military hospital said. He was 75.
Shalikashvili -- known simply as "Shali" -- passed away at Madigan Army Medical Center in Tacoma, Washington, Joint Base Lewis-McChord said in a statement. He had previously suffered a severe stroke in 2004.
Shalikashvili is survived by his wife Joan and their son Brant.
A public memorial service is planned for August 6 in Tacoma, to be followed at an undetermined date by a funeral service at Arlington National Cemetery just outside the US capital.
The Polish-born Shalikashvili became chairman of the Joint Chiefs of Staff in 1993, serving under then-president Bill Clinton until he retired in 1997.
"As we mourn his passing, so, too, do we reflect on his contributions to our nation -- the lives he changed, the careers he mentored, the impact he made simply by virtue of his character and commitment," Chairman of the Joint Chiefs of Staff Mike Mullen said.
"We are a stronger, more capable military today because of his efforts to make us so. He will be deeply missed."
President Barack Obama hailed his "only in America" story, born on June 27, 1936 in Warsaw to Georgian refugee parents fleeing Russia's Bolshevik uprising.
He was granted US citizenship in 1958, six years after immigrating to Illinois. It was his first citizenship ever as he had previously been considered "stateless."
"With the passing of general John M. Shalikashvili, the United States has lost a genuine soldier-statesman whose extraordinary life represented the promise of America and the limitless possibilities that are open to those who choose to serve it," Obama said in a statement.
"From his arrival in the United States as a 16-year old Polish immigrant after the Second World War, to a young man who learned English from John Wayne movies, to his rise to the highest ranks of our military, Shali's life was an 'only in America' story."
NATO's 10th supreme allied commander for Europe and commander-in-chief of United States European Command from 1992 to 1993, Shalikashvili was first drafted into the US Army in 1958, rising through the ranks of every level of unit command from battalion to division during four decades of service.
He served from 1968-69 in Vietnam and headed Operation Provide Comfort, a peacekeeping and humanitarian mission that defended Kurds in northern Iraq in the 1990s. It was the US military's first major humanitarian mission.
He also led military operations in Bosnia, Haiti and elsewhere around the world.
"John was an extraordinary patriot who faithfully defended this country for four decades, rising to the very pinnacle of the military profession," said Defense Secretary Leon Panetta, who worked closely with Shalikashvili in the Clinton administration when he was White House chief of staff and the general was Joints Chiefs chairman.
"I came to rely on his wise counsel, his wealth of military expertise, and his candor as we were challenged by foreign policy crises in Haiti, the Balkans, and elsewhere," added Panetta, praising Shalikashvili as "one of this country's finest."
Shalikashvili had expressed support in his final years for a repeal of "Don't Ask, Don't Tell," the ban on gays and lesbians serving openly in the US military, saying there was no evidence that allowing gay soldiers to be open about their sexual orientation would undermine military readiness.
The ban is now set to be formally repealed on September 20.
Clinton awarded Shalikashvili the Presidential Medal of Freedom, the highest civilian award given by the United States. An inscription on the medal thanked him for working "tirelessly to improve our nation's security and promote world peace."
Copyright © 2011 AFP. All rights reserved. More »
Three dead in shooting at Arizona motorcycle rally | Reuters
(Reuters) - A shooting late Friday at a motorcycle rally in Northern Arizona left three dead and one critically wounded, police said on Saturday.
The killings at Mormon Lake, a few miles south of Flagstaff, happened as an annual rally called "Too Broke for Sturgis" was just getting underway, the Coconino County Sheriff's Office said.
A sergeant with the sheriff's office assigned to the event radioed in at about 11:20 p.m. Friday that he had heard shots fired.
Boehner Said to Seek $3 Trillion Cuts, Signal for Markets
(Updates with comment from analyst in fourth paragraph, plans for new meeting in sixth paragraph.)
July 23 (Bloomberg) -- House Speaker John Boehner told Republican lawmakers they need to provide a positive signal on a plan to avert a U.S. default before Asian financial markets open tomorrow, Republican congressional aides said.
Boehner wants at least $3 trillion in cuts in a two-step plan to accompany an increase in the U.S. debt limit, one of the aides said. Concern about Asian markets' reaction to the collapse of talks on a long-term deficit plan between Boehner and President Barack Obama was a subject in a meeting today among the president and congressional leaders, the aides said.
The markets could be tumultuous if a plan isn't negotiated over the weekend, said Christian Cooper, head of U.S. dollar derivatives trading in New York at Jefferies & Co.
"The markets will be under very real pressure at the open because the assumption will be there is really no resolution to this," Cooper said. "The breakdown in negotiations has crossed the line from the political posturing of the last few weeks to potentially a very real crisis.
"The Tea Party is effectively playing Russian roulette with the bond market and they will, with certainty, lose," Cooper said. Jefferies is one of 20 primary dealers that trade with the U.S. Federal Reserve.
Boehner's office said congressional leaders would meet at his office at 5:30 p.m. today.
No Short-Term Deal
Obama remained opposed to any increase in the $14.3 trillion debt limit that doesn't go through the next election in November 2012. He told lawmakers today that a short-term extension would be "irresponsible" and "could cause our country's credit rating to be downgraded, causing harm to our economy," White House Press Secretary Jay Carney said in a statement.
Congressional leaders sought to produce a plan that could pass both chambers.
"Over this weekend Congress will forge a responsible path forward," Boehner, an Ohio Republican, said in a statement after the White House meeting. "House and Senate leaders will be working to find a bipartisan solution to significantly reduce Washington spending and preserve the full faith and credit of the United States."
One Republican congressional aide said that under Boehner's scenario, a first vote next week would provide a down payment on spending reductions, though the amount hasn't been determined. Another vote would be held later.
Lawmakers 'Committed'
Boehner told Republican lawmakers yesterday he would need to introduce legislation by July 27, one lawmaker said, to ensure both chambers could enact it under their regular procedures before Aug. 2, when the Treasury has projected it will exhaust its legal borrowing authority.
Senate Republican leader Mitch McConnell of Kentucky said top lawmakers are "committed" to preventing a U.S. default.
House Democratic leader Nancy Pelosi of California said the leaders must "make every moment count." She said there would "absolutely, positively not" be a short-term deal and that leaders weren't talking about raising the eligibility age for Medicare.
With the debt-limit deadline approaching, Obama said at the White House last night that "at minimum" Congress must act to avoid a default that would roil financial markets and damage the economy. He said he was consulting with Treasury Department officials about the potential consequences of a default.
'Have Some Answers'
"It's very important that the leadership understands that Wall Street will be opening on Monday, and we'd better have some answers during the course of the next several days," Obama said.
Boehner yesterday withdrew from the efforts the two have pursued to revamp the government's finances over the next decade.