Obama argues debt case to nation

Boehner rebuts in another speech as divide deepens, default looms

By Matt Viser
Globe Staff / July 26, 2011

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WASHINGTON - President Obama, reminding lawmakers “the whole world is watching,’’ exhorted them last night to break through partisan bickering and pass a comprehensive budget deal that protects Americans from the pain of a government default in one week.

The prime-time address to the nation came hours after House and Senate leaders released dueling plans that promised to spark days of battles between the chambers and within the parties. No clear path to a resolution emerged.

Invoking the words and actions of Ronald Reagan and hinting of impending economic havoc, the president told lawmakers failure is not an option.

“The American people may have voted for divided government, but they didn’t vote for a dysfunctional government,’’ Obama said during a 15-minute address. “We can’t allow the American people to become collateral damage to Washington’s warfare.’’

A hint of how lawmakers will respond is expected to come as soon as tomorrow. Speaker John Boehner plans to hold a vote in the Republican-controlled House on his two-step approach that would cut spending by $1.2 trillion and allow the government to keep borrowing money for another seven or eight months.

It would also establish a complicated system to allow the debt limit to again be extended with a later vote, as long as a bipartisan commission can find nearly $1.8 trillion in additional cuts to the deficit’s growth.

Obama said such a short-term approach was dangerous, imperiling markets and the US credit rating while guaranteeing the nation would face another crisis in a few months.

Obama targeted conservative Republicans in the House, blaming them for blocking a balanced deal he and Boehner had been working on by insisting on a cuts-only approach and accusing them of protecting only the interests of the richest Americans. In an attempt to isolate the Republicans backed by the Tea Party movement, Obama made an unusual appeal: Americans who agree with him should call and pressure their local lawmaker.

Although Obama had said he will veto any legislation that does not extend the debt limit through 2012, he did not explicitly repeat that vow last night.

Continuing the high-stakes battle for public opinion, Boehner delivered a nationally televised address just moments after Obama spoke.

“The president has said we need a balanced approach, which in Washington means, ‘We spend more, you pay more,’ ’’ Boehner said during his 5-minute address from Capitol Hill.

In the Senate, majority leader Harry Reid planned to move forward, perhaps as early as Thursday, with his own legislation in his Democrat-controlled chamber that would cut spending by $2.7 trillion and allow the nation’s debt to increase for about 17 months.

The president backed Reid’s plan in his speech last night, even though it does not call for any revenue increases.

The competing plans emerged after several days of fruitless bipartisan negotiations. Even as investors, creditors, and recipients of government programs anxiously await a resolution, Democrats and Republicans spent much of yesterday blasting the other party’s proposals.

Some accused Republicans of bald opportunism in the face of a potential national economic calamity. Edward Markey, the dean of the Massachusetts delegation, said the GOP was content to bring down the global economy.

“The strategy that Republicans have is purely political because they believe that economic uncertainty is their friend - and a lack of investment dollars coming from the sidelines to reinvigorate our economy is in their best political interests in November 2012,’’ said Markey, Democrat of Malden. “That is their plan in a nutshell.’’

Republicans also were dismissive in their appraisals.

“The plan is full of gimmicks,’’ Boehner said of Reid’s proposal at a news conference where he was surrounded by House GOP leadership.

Against the din of such brinkmanship, it remained unclear how a solution will be forged. But Republicans would appear to have the legislative leverage in the current course of debate.

With control of the House majority, they should be able to push through Boehner’s plan, putting the pressure on the Democrats in the Senate. But some Republicans have hinted they may vote against it because they want deeper budget cuts or they oppose increasing the debt ceiling in any form. With Democrats uniting against it, Boehner cannot afford a major defection within his party.

The Senate could become a legislative tar pit for both bills. If Republicans unite - and minority leader Mitch McConnell of Kentucky has been very successful at keeping his corps together - they could filibuster Reid’s plan.

If Boehner succeeds in passing his bill in the House, it would face a filibuster from Democrats.

Senator Susan Collins, a Maine Republican who is often a barometer for moderates in the Senate, was unenthusiastic about Reid’s plan. “I don’t feel good about it, based on what I’ve heard,’’ she said.

Republicans appear to be hoping that their plan will be the only viable one still standing as the deadline of Aug. 2 for a government default approaches.

“If you get to the 11th hour and you actually have some legislation that’s doable - if there’s not a lot of time for negotiations - it really puts pressure on Obama,’’ said Julian Zelizer, a professor at Princeton University.

Senator John Kerry, a Massachusetts Democrat, said he supported Reid’s approach.

Senator Scott Brown, a Massachusetts Republican, has remained noncommittal on whether he supports either Reid’s or Boehner’s plan.

“Senator Brown is reviewing both of the proposals that were released earlier today,’’ spokesman Colin Reed said in a statement. “He remains hopeful he will be able to vote for a reasonable package that cuts spending and prevents our nation from defaulting on its obligations.’’

Markey’s comments were among the most caustic.

Republicans “are allowing the pointed gun of economic uncertainty to continue to be pointed at our recovery,’’ the Democrat said in an interview. “Rather than resolve the economic issues, what we’re seeing is that the Tea Party has congressional Republicans wrapped around its finger, but it’s the American people who are getting squeezed.’’

Boehner’s plan would establish a 12-member bipartisan commission composed of House and Senate lawmakers. That commission would have until Nov. 23 to report recommendations - on a majority vote - about how to cut another $1.6 trillion to $1.8 trillion. Congress would have a month to vote on the plan, with no amendments and no filibusters.

If the commission’s recommendations were approved, it would be easy to raise the debt limit by another $1.5 trillion. If the recommendations were not, the country would be in the same position it’s in now.

At one point, Obama read the words of Reagan, and compared his own position on raising taxes to lower deficits to that of the former president and Republican icon.

“Today, many Republicans in the House refuse to consider this kind of balanced approach - an approach that was pursued not only by President Reagan, but by the first President Bush, by President Clinton, by myself,’’ Obama said. “So we’re left with a stalemate.’’

In the end, the president said, a deal requires both parties to come to the table with something other than ideological purity.

“People . . . are fed up with a town where compromise has become a dirty word,’’ Obama said, adding, “Let’s seize this moment.’’

Theo Emery of the Globe staff contributed to this report. Matt Viser can be reached at