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The Senate voted down the House's Cut, Cap, And Balance plan by a straight party line vote of 51-46. Naturally, Democrats were against cutting spending, capping spending, and balancing the budget, while Republicans favored those things. This marks the second time the Democrat-led Senate has killed a Republican-led House proposal that would have solved the debt limit crisis and put America on a path toward fiscal stability. The Dems earlier killed the Republican House budget, aka, the Ryan plan.
Now we move on to a vote on the Senate Democrat plan....oh sorry, I forgot, THE DEMOCRATS DON'T HAVE A PLAN. They have never proposed one, just as they have not proposed a budget in over two years. Senate Democrats even voted unanimously against President Obama's budget, which failed in the Senate by a vote of 97-0. Such courageous leaders, these Senate Democrats. NOT ! If a debt limit agreement is not reached, I propose the first people we stop paying are Senate Democrats.
Senate Majority Non-Leader Harry Reid (D-NV) was happy about leaving America with no plan, and even had the nerve to criticize House members for taking the weekend off. Here we have Reid, who has shown no leadership and has devised no plan and no budget, criticizing House Republicans, who have proposed two different plans. This proves that Reid is a spineless rat fink.
On the secret Obama negotiations front, House Majority Leader John Boehener (R-OH) broke off negotiations temporarily with President Obama. Obama said the Republicans have "left him at the altar" again, while Boehner said he had a tentative deal with Obama, until Obama changed the deal by asking for more tax increases. Even if Obama and Boehner do reach a deal, there is no guarantee either the House or the Senate would pass it. Many Congresspersons are irked by the secret negotiations, from which they are excluded. One of those irked is the spineless non-leader rat fink, Harry Reid. He's unhappy that his leaderless spineless rat fink butt isn't included in the negotiations. Sorry Harry, only leaders are included in the meetings. You don't qualify. We already know you aren't interested in doing your job. Your actions have spoken loud and clear.
Ten days until the debt limit expires on August 2nd, and we're back to zero, but the Obama negotiations are resuming today. President Obama is still pushing for a larger debt limit deal, and he has a reason:
"If we can't come up with a serious plan for actual deficit and debt reduction, and all we're doing is extending the debt ceiling for another six, seven, eight months, then the probabilities of downgrading U.S. credit are increased, and that will be an additional cloud over the economy and make it more difficult for us and more difficult for businesses to create jobs that the American people so desperately need," Mr. Obama said.
The President has a point here. Standard And Poor's just said there is a 50-50 chance that the credit rating of the United States will be lowered within three months, and that it will depend on how serious America gets about cutting the deficit:
If an agreement is reached to raise the debt ceiling but nothing meaningful is done in terms of deficit reduction, the U.S. would likely have its rating cut to the AA category, S&P said.
"While banks and broker-dealers wouldn't likely suffer any immediate ratings downgrades, we would downgrade the debt of Fannie Mae, Freddie Mac, the 'AAA' rated Federal Home Loan Banks, and the 'AAA' rated Federal Farm Credit System Banks to correspond with the U.S. sovereign rating," S&P said in its report.
"We would also lower the ratings on 'AAA' rated U.S. insurance groups, as per our criteria that correlates insurers' and sovereigns' ratings," the firm said.
And if no debt limit agreement is reached ???
However, S&P said it sees a failure to reach an agreement on raising the debt ceiling and reducing deficits as the least likely scenario, adding that in such a case the global financial markets would be in turmoil and "likely shove the U.S. economy back into recession."
In such a hypothetical case, it envisages the U.S. Treasury curtailing spending sharply and the U.S. Federal Reserve launching another round of quantitative easing to help prop up the economy.
"Under this scenario, we expect that interest rates could rise--say, 50 bps on short-term rates and double that on the long end--though this may depend on whether Treasuries would lose their status as the safe haven that investors have historically perceived them to be, or whether physical assets such as gold would benefit from such a flight to quality," S&P said.
It added that either way, corporate borrowers would likely see yield spreads widen while equity markets and the U.S. dollar would likely suffer
Not raising the debt limit is not a good option, folks. A deal must be struck.