Contingency Plans Underway As Debt Deadline Nears

Wednesday, July 27, 2011

Despite plenty of drama and public rhetoric in the battle over the U.S. debt ceiling, President Obama and House Speaker John Boehner have not yet reached a compromise. The deadline is looming as is the possibility the country will have to default on its $14.3 trillion of debt. As time marches on, analysts are starting to think seriously about what would happen if no deal can be reached. A vote was expected today in the House on Boehner’s last bid to increase the debt limit and cut spending — but that all fell apart last night when Tea Party Republicans refused to vote for it.

Louise Story, Wall Street and financial reporter for our partner, The New York Times, and Todd Zwillich, The Takeaway’s Washington correspondent report on where the talks stand and what sorts of services will be cut in the event of a default.


Louise Story and Todd Zwillich

Produced by:

Susie Warhurst

Comments [7]


It really takes some effort, from the left-leaning media like public radio, to convince the public that the so-called Tea Party needs to be blamed for this.

I am offended at President Obama and the Democrats, demanding a tax increase in return for their agreeing to a debt-limit deal.

The President has had two years to propose and to work through Congress a tax increase, if that is what he wanted. Obama never did that, because he knew that it would be unpopular. More than unpopular; it would have been a non-starter.

But now Obama wants what can only be described as a "crisis tax." It's his crisis. If he'd like to raise taxes, he can propose it later. For now, he needs to get a debt-limit bill done. And quit threatening Congress with vetoes.

I'd look forward, to seeing an Obama tax-increase proposal, debated through all of 2012. Obama can run for re-election on the tax increase platform. Obama can design it any way he wishes. Propose any kind of tax increase, on any class of people or on any loopholes, that he desires. Just propose it when there is time to debate it, and run for re-election on it.

Own it, Mr. President.

Jul. 27 2011 11:13 AM
Dan Parietti from New York, New York

:es, there is a risk to the economy if the debt ceiling is not raised by the August 2 deadlin. But, to me, there is also a benefit. NAmely, it will give the American people the opportunity to expereince what it's like to go wihtout certain government services and see if they can or cannot do without. It will give us an opportunity to decide what services we want our Federal Government to provide. This is an excersie American Society must perform. We as a nation must determine just how big we want goverment to be and what revenue is required to pay for it.

Jul. 27 2011 09:45 AM
Mordecai Christi from Boston

This is where political fact melds with hyperbolized-political fiction... what a world... what a world...

...can you see how easy this is that our paper tiger president might only be in this as a corporate shill, that the 'pubs are in-control, even if they come home to a home they speak in "fluent" 'democrat', that Moody's and S&P et. al. are calling up the 'higher-ups' and schmoozing and waxing threats of failure that both sides might use to pacify their bombast and pathological destruction of humanity via psychological and gut-wrenching warfare?

[again] - S&P, Moody's threat of a drop in our credit-rating would make a wonderful tool to scare voters and 'us normies/non-elected non-rich or non-highest-echelon-types' to pile-on to the fears of financial meltdown, the panicking-little-people-now, transformed by their quasi-intentional-ignorance, that now the politicians have more credence to act in the more-extreme ways they feel they desire.

Fact or fiction, politics in 'merca these days is all-disgusting to me.

Jul. 27 2011 09:20 AM

Is it really true Social Security checks will be stopped if no agreement is made August 2? With all the massive waste and highly questionable expenses in government, isn't odd that the first things that the administration may deny funds to are the popular and high profile services?
Is this a deliberate manipulation of the public for crass political effect?

Jul. 27 2011 09:15 AM
Joe from Florida

The funniest thing is, no plan has any provisions for taxing corporations or the top two percent wealthiest in the country. But there will more than likely be a downgrade in the U.S. Credit rating, raising the interest on our debt, and the only logical move at that point is to raise taxes on corporations & the wealthiest Americans, since the rest of us are spread too thin.
Nothing is certain, but death & taxes.

Jul. 27 2011 09:01 AM
John from Pelham

The President should huddle with his lawyers and raise the ceiling by himself- he will be a hero to the 70% of Americans who see that the republicans selfish scorched earth policy designed to bring down the President is an abuse of their constitutional responsibility.

Jul. 27 2011 07:57 AM
Ed from Larchmont

If there is a default, everyone loses. But they almost had a deal in sight last Saturday, but it fell through. On Sunday same sex marriage became legal in New York. Bad decisions lead to bad results.

Jul. 27 2011 06:20 AM

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