Friday evening, with just 72 hours to go before the United States runs out of cash, The House Republicans passed the Boehner plan with only Republican votes. Minutes later, on a bi-partisan vote, the Senate effectively killed the Boehner plan by a vote to table it.
The only bill left to solve the debt crisis is the Reid compromise bill, which he amended to mirror bills already voted for by Republicans. Senate Republican Leader Mitch McConnell (R-KY) decided to filibuster the bill to prevent it from being brought up for a vote.
Furthermore, McConnell refused to even negotiate with Senator Reid on any changes the GOP now wants to the bill. Reid says the bill now contains everything the GOP wanted wrapped up in a bow. It has cuts that equal the increase in the debt ceiling, closes no tax loopholes, has no tax increases,, and Obama must come back to Congress again next year for another increase–all of these are Republican passed provisions.. The earliest the Senate can vote to end fillibuster is 1:00 AM Sunday morning when Senators are tired, exhausted, cranky, and not at their best.
McConnell has said publically at least a dozen times, his number one priority is to insure that Barack Obama is not re-elected. Raw, ugly, disgusting, partisan politics is trumping the good of the nation with McConnell. So, while America burns, McConnell fiddles hoping it will defeat the nation’s first African American President.
Crisis is beginning to cost Americans
As of Friday, the U.S. Treasury was down to $53 billion in cash on hand. That is less than Apple Computer and many other corporations have in the bank. The bills that need paid August 3rd amount to $306 billion. Do the math. Someone is going to get burned, but it won’t be Congress. They will collect their pay, health care, and perks on time.
The stock market has dropped for six days in a row as investors watch this political spectacle play out in Washington. This has already cost investors billions of dollars in wealth. It hurts 401K retirement accounts especially hard. The average American lost thousands in their retirement accounts already due to the ugliness in Washington.
This is just the beginning. If this is not resolved in the next 72 hours, this is how it will hurt Americans. If the credit agencies downgrade our credit rating, interest on car loans, student loans, mortgages, and credit cards will go up. Mortgages went up slightly already last week.
A default, not just on the interest on the debt, but default on other payments such as paychecks to Federal employees and businesses having contracts with the government, will set off a double dip recession according to nearly all economists. This will cause the stock market to lose value like it did in 2001 and 2008 wiping out as much as a third of the value of investments.
America’s credibility in world already damaged and will get worse
The United States is the world’s biggest economy, but it is running its affairs like a banana republic. This baffles and angers our allies and trading partners who have hitched their wagon to our horse and may go down with us.
China, which has the most to lose because it holds $1.16 trillion of our debt, offered a blistering attack on Washington on Friday, calling for a show of responsibility and an end to the partisan bickering. This was reported in an article by Liz Ackerman in The New York Times.
“The ugliest part of the saga is that the well-being of many other countries is also in the impact zone when the donkey and the elephant fight,” the state-run news agency, Xinhua said in an opinion piece Friday. Xinhua said the “irresponsible” brinksmanship in Washington risked “strangling the still fragile economic recovery of not only the United States but also the world as a whole.”
Japan, the second largest foreign creditor worries that their post-tsunami economic problems would only worsen if the yen rises further against the dollar. Economic problems in Japan have already closed American factories because Japan manufactures parts needed by American automobile and electronic manufacturers.
Officials in Europe blasted American hypocrisy recalling that American leaders had admonished them just a few weeks ago to straighten out the messy politics of Europe’s own debt crisis. “One could now ask why is the U.S. debt treated any better than a country like Portugal, which has about the same levels of deficit and debt,” said a senior European policymaker, who spoke on condition of anonymity according to the Times article.
So, with 72 hours to go, the Do-nothing Congress is still doing nothing.
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