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Boehner Loses Credibility in Revised Budget Deficit Cuts Proposal, Tells Congress to "Get Your Ass in Line"

Politics / US Debt Jul 29, 2011 - 01:55 AM GMT

By: Mike_Shedlock

Politics

Best Financial Markets Analysis ArticleIt was bad enough when Boehner proposed a $3 Trillion deficit cutting proposal that the CBO said would only cut the deficit by a mere $850 billion.

Please see Rating the Obama, Reid, and Boehner Deficit Reduction Plans on Mish's 10-Point Credibility Scale for details.


However, one can make excuses for a "one-time" mistake. However when you submit a second plan that the CBO says will only cut the deficit by $950 billion you lose all credibility. Nonetheless, Boehner tells Congress ...

"Get Your Ass In Line"

Bloomberg reports Boehner Revises Debt Proposal as Aug. 2 Nears

Republican leaders were moving ahead with plans to vote on the measure tomorrow, less than one week before a potential U.S. default Aug. 2, and sought to ease party members’ concerns that it wouldn’t cut spending enough. The Congressional Budget Office said Boehner’s new plan would cut $915 billion in spending over a decade, still short of the $2.2-trillion Senate plan.

Boehner, when asked by radio host Laura Ingraham whether he told members at a closed-door meeting today to get “your A-word in line” behind his debt bill, said: “I sure did. Listen, this is time to do what is doable.”

Boehner’s plan would promise another debt-limit showdown in the 2012 election year unless Republicans and Democrats agree by the end of this year to reduce deficits. President Barack Obama and congressional Democrats insist on extending the nation’s borrowing authority through the 2012 elections, saying continued uncertainty would harm financial markets.

An analysis by the nonpartisan CBO of Boehner’s revised plan said it would cut spending by $915 billion, compared with $850 billion for his original plan. This still was less than the $1.2 trillion advertised by party leaders for an initial round of cuts, which prompted leaders to cancel today’s scheduled House vote on the bill.

Boehner's Credibility Gone In Second Gaseous Proposal

The best Boehner could come with over the course of 10 full years, is another $65 Billion! My dead grandmother could find more than that.

With that gaseous proposal, Boehner’s credibility is burnt toast.

Moreover, the Senate will likely reject any of these proposals of Boehner that require a balanced budget amendment. So what is the point other than to put on a ridiculous show?

It would be one thing if his plan contained debt reductions of substance. But in two attempts, Boehner could only find a mere $95 billion a year in cuts when the deficit is a shocking $1.4 trillion.

On my 10-point credibility scale, Boehner passed #7 "Nauseous" and is now solidly in the #8 spot of "Gaseous". The next step is "Imaginary" where President Obama's nonexistent plan sits.

Governor Chris Christie Blasts Obama


New Jersey Governor Chris Christie blasted Obama for not having a plan, telling the president ""You Can't Lead From Behind".

Please see Chris Christie on Obama's Unwillingness to Submit a Deficit Plan "You Can't Lead From Behind" for details and a video.

Exercise in Futility


Meanwhile in an exercise in futility Boehner Moves Ahead on Debt.

House Republican leaders pleaded with their recalcitrant rank and file Thursday to back a plan to stave off an unprecedented government default next week. The House vote would bring President Barack Obama and congressional leaders one step closer to the endgame before Tuesday's deadline.

Republicans are seeking deep spending cuts in exchange for raising the nation's $14.3 trillion debt limit. The White House has threatened to veto the House GOP bill even if it makes it through the Senate, where it faces unanimous opposition among Senate Democrats. Still, getting the newly modified House plan passed on Thursday was seen as an important step toward the process of finding a compromise between the House and Senate proposals.

In a closed-door GOP meeting just hours before a scheduled vote, Speaker John Boehner, R-Ohio, made headway in getting toward the 217 votes necessary to pass his plan in the House. No Democrats were expected to support it. Boehner told the Republicans he expected to round up enough votes but was not there yet.

"But today is the day," he said, according to people in the room.

"I think it's the best deal we can get," said Rep. Steve Chabot, R-Ohio, who said he had dropped his opposition. Rep. Walter Jones, R-N.C., said he would back the measure to ensure that Boehner "has a seat at the table" for the endgame negotiations.

Best Deal You Can Get?

Notice the rank and file starting to cave in to Boehner's gaseous proposal. Rep. Steve Chabot, R-Ohio called it "the best deal we can get."

No it's not. It's not even the best deal you can't get. The Senate will not go along, so there is nothing to get.

As long as you are going to submit proposals you can't get, you may as well make it a good one. $950 billion over 10 years is not a good deal. It's not even a down payment on a good deal, and with that, Boehner just pissed away his credibility.

In the end, something will pass. But it will not do a damn thing credible to reduce the deficit. Reid's plan and Boehner's plan are both back-loaded.

Republicans had a golden opportunity to attempt to extract some major concessions in return for tiny tax concessions. Instead, they are going to settle for nothing. This fiasco is exactly why Republicans need someone like Chris Christie running for president. No one else has managed to show any leadership.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .

© 2011 Mike Shedlock, All Rights Reserved.


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