Obama to Congressional Leaders: "Explain to Me How It is We're Going to Avoid Default"

On Friday afternoon, after the stock market closed, House Speaker John Boehner (R-OH) and President Barack Obama issued dueling press conferences to explain that Boehner had decided to discontinue debt ceiling negotiations with the president and instead pursue a solution in Congress.



Boehner claimed that Obama had asked for $400b in revenue over ten years by increasing taxes, in addition to $800b that would be achieved through tax reform. Obama claimed that the deal had been structured to avoid raising taxes because so many Republicans had signed an anti-tax pledge (see I Pledge Allegiance to Grover Norquist). It was unclear from Obama’s press conference whether or not the deal breaking $400b would, indeed, require something other than closing loopholes but it was something that his fellow Democrats had demanded after seeing the ratio of cuts to revenues Obama and Boehner had negotiated.

Coincidentally, earlier Friday morning, Senate Majority Leader Harry Reid (D-NV) held a vote to kill the “Cut, Cap and Balance” bill, passed by the House, without allowing debate.

Harry Reid said, “I think this piece of legislation is about as weak and senseless as anything that has ever come on this senate floor… perhaps some of the worst legislation in the history of this country.”

The vote was killed (51-46) along party lines with two Democrats, John Kerry and Kirsten Gillibrand, and one Republican, John McCain, not voting.

By its refusal to consider this legislation, the senate Democrats joined Republican presidential candidates Michele Bachmann and Ron Paul in voting against raising the debt ceiling. Boehner did not cite the way the House’s legislation was handled as a reason for his leaving the debt ceiling talks but mentioned "partisan sniping" in answering a question.

In terms of deficit reduction, the House Republican’s line in the sand has been “no tax increases.” The Democratic line in the sand has been “no entitlement cuts without shared sacrifice.”

Later in the press conference, Obama expressed some thoughts on additional future uses of revenue. “If you’re a progressive, you should want to get our fiscal house in order because once we do it, it allows us to then have a serious conversation about the investments we need to make: like infrastructure, like rebuilding our roads and bridges, airports, like investing more in college, education, like making sure we’re focused on the kinds of research and technology that’s going to help us win the future.”

With these two press conferences, Boehner and company are faced with a new deadline. They have to come up with something to sooth the stock market by Monday morning.