Here's What's Happening
You know what they say: Never negotiate with terrorists. It only encourages them.
These last few months, much of the country has watched in horror as the Tea Party Republicans have waged jihad on the American people. Their intransigent demands for deep spending cuts, coupled with their almost gleeful willingness to destroy one of America’s most invaluable assets, its full faith and credit, were incredibly irresponsible. But they didn’t care. Their goal, they believed, was worth blowing up the country for, if that’s what it took.
Like ideologues everywhere, they scorned compromise. When John Boehner, the House speaker, tried to cut a deal with President Obama that included some modest revenue increases, they humiliated him. After this latest agreement was finally struck on Sunday night — amounting to a near-complete capitulation by Obama — Tea Party members went on Fox News to complain that it only called for $2.4 trillion in cuts, instead of $4 trillion. It was head-spinning.
Tuesday, August 2 10:10 AM/ET Have Your Say
Thought you'd like to see what some of our readers have to say about what's happening in DC:
majikco writes:These congressman and President are laughing at all of us like we are fools. There will be a budget bill passed and the debt ceiling will increase, this has been already decided months ago by congress. What this really is all about is election 2012, what better way to get free media exposure to sell one self to the dumb ass American people.
Apocalypse_Now writes:The whole congressional debt story is like being on the deck of the Titanic, trying to save myself, while the Captain is reading a poem and the band is playing. P.S. In that vision - CNBC is the band playing in the background. See you at the bottom!
Moweaqua writes:As usual, nothing is being done about the deficit. Both the president and congress are just "kicking the can further down the road" and and increasing exponentially the burden on later generations to clean up this mess !
pseudo-intellectual writes:“We have negotiated with terrorists,” an angry Doyle said, according to sources in the room. “This small group of terrorists have made it impossible to spend any money.” That says it all, doesn't it? Spend-and-tax, tax-and-spend.
JohnSteel writes: (re: Obama) ... The man is the most pathetic excuse for a leader in history. He is an even worse excuse for a Democrat. It is absurd when Tea Party types label him a socialist. The wealthy elite have no better friend. He is a traitor to this nation and the oath he swore. He should be arrested, tried and hung.
And my favorite — DoitYourself writes:Just wanted to say thanks to the writers for keeping this entertaining! Nice work on a miserable story.
Buy that reader a beer! Thanks to you all for your comments.
Tuesday, August 2 9:55 AM/ET: - Wanna Watch Your Senate in Action?
Click here to watch the Senate debate and (hopefully) vote on the Debt Bill
Tuesday, August 2 9:42 AM/ET: Joe Biden and the Art of the Deal
Joe Biden, Mitch McConnell and the making of a debt deal (Politico.com)
He had given away his demand for a clean increase in the debt limit. He had given up on tax hikes on the rich and closing corporate loopholes. He had even given away billions in cuts to domestic programs close to his heart.
But by 4 p.m. Sunday — two days before the country would plunge into default — President Barack Obama drew the line against congressional Republicans who wanted assurances that defense spending would be cut less than many other programs.
“We just can’t give there,” Vice President Joe Biden, Obama’s chief emissary to the Hill in the budget negotiations, pointedly told House Speaker John Boehner (R-Ohio).
With that, a grim Obama contemplated the unthinkable: pulling the plug on a deal and precipitating a global economic crisis. Huddled in the Oval Office, the president and his top aides proceeded to discuss how Treasury Secretary Tim Geithner might step out later that night and prepare the country for the inevitable market crash.
Then, almost as abruptly, the compromise started coming together. What happened during a weekend of frenzied negotiations to salvage the deal is a tale of cataclysm narrowly averted, a historic debt-reduction plan that satisfies none of its signatories and a lesson on how even the most dysfunctional political system can be made functional through the injection of fear, finesse and Joe Biden’s old friendships.
Tuesday, August 9 9:33 AM/ET: FYI, The Senate is Now in Session
Vote is scheduled for Noon(ish)
Tuesday, August 2 9:30 AM/ET: Next Time on Jeopardy
Geithner Uncertain If US Credit Rating in Jeopardy (CNBC.com)
Treasury Secretary Timothy Geithner said he doesn't know if the bruising debt-limit battle will harm America's triple-A credit rating, but said he fears "world confidence was damaged by this spectacle."
Geithner told ABC News the credit rating is "not my judgment to make." But he also said "this is, in some ways, a judgment on the capacity of Congress to act."
He acknowledges the bill passed by the House Monday and pending in the Senate will not immediately relieve high unemployment. But Geithner said "this is a very strong, very resilient economy," and the new stability should allow the Obama administration to return to its heavy focus on job creation.
Tuesday, 7.30 am/ET: European Markets Shift Focus
European markets appear to have forgotten about the debt vote passed in the House on Tuesday morning, focusing instead on worries that Italy could be the next domino to fall in the European debt crisis and on the sharp slowdown in the US economy.
Marc Faber, editor and publisher of The Gloom Boom & Doom Report joined the chorus of disapproval over the debt ceiling impasse on Tuesday morning.
"The politicians are all useless individuals. Nobody is reducing the problems in the US or Europe, just putting on a band aid and postponing the problems endlessly," he told CNBC. "Some analysts think that there's a chance economic data will surprise on the upside but I think, if anything, it will be on the downside," Faber said.
But Dr. Harm Bandholz, chief US economist at Unicredit Research said in a note to clients that the fighting over how to cut spending had been worth it
“Despite entrenched positions, the parties were after all able to find a compromise. Second, the debate has highlighted how big the US debt problem really is, and that austerity measures are unavoidable,” he wrote.
Tuesday, August 2 4:45 AM/ET: Asia Doesn't Pop the Bubbly
It's the big vote day but Asia's gone straight from Monday's euphoria to worrying about the U.S. economy, with every Asian market down during the day. China's official mouthpiece, the People's Daily, is also playing spoilsport. The paper issued a brief commentary complaining that the debt issue had been kicked further down the road.
"Although the United States has basically avoided default, its sovereign debt problems remain unresolved. They have merely been pushed off, and there is a tendency for them to grow," Reuters quoted the paper as saying.
It's not just the Chinese who are fretting, the Japanese are priming the markets for a double dose: FX intervention and monetary easing. There was a brief respite though for the Yen, which weakened versus the dollar overnight.
Monday, August 1 8:10 PM/ET: Giffords' Dramatic Return to House (Part Two)
This is better video. You get to see the Congresswoman in a better light. Short but sweet.