Friday’s dismal jobs report has significantly altered the landscape of the debt limit negotiations. Now that President Obama has been forced to acknowledge that the economy is not as strong as he hoped, he is desperate to win a long-term deficit deal. He badly needs Republicans to co-own both the debt and the economy. Speaker John Boehner, R-Ohio, even seemed perilously close to signing onto a deal that would have both guaranteed massive tax hikes and left all three entitlement programs, Social Security, Medicare and Medicaid, fundamentally unreformed.
But for whatever reason, Boehner wisely pulled back. The U.S. economy and the Republican party dodged one bullet. But what about the next one? The federal government is rapidly running out of money and Treasury Secretary Tim Geithner is steadfastly refusing to prepare any contingency plans should August 2nd come without a deal. He refuses to sell U.S. assets that could provide enough cash to get through the next month, and he refuses to begin the necessary work for the Treasury Department to prioritize federal government obligations. The administration’s plan appears to be to let the deadline approach and hope a mini-market crash motivates Republicans to accept higher taxes.
Republicans may have their own Plan B. When Fox News’ Bret Baier asked, Senate Majority Leader Mitch McConnell, R-Ky., yesterday, “Is there a contingency plan?” McConnell said, “There’s always a contingency plan. … Well, we’re going to go forward and I’ll have more to say about that later in the week.” It better be a good one.
Around the Bigs
The Washington Examiner, Obama, lawmakers fail to break deadlock: A Sunday night negotiation session between President Obama and congressional leaders ended, again, without any deal to raise the federal government’s borrowing authority before the Treasury Department identified August 2nd deadline. Everyone will meet again Monday morning after Obama hosts a news conference at 11 a.m. to discuss the talks.
The Wall Street Journal, Little Hiring Seen by Small Business: A poll of small business owners by the U.S. Chamber of Commerce finds that 64 percent of them are no planning to add to their payrolls in the next year. Another 12 percent even say they are planning to cut jobs. Only 19 percent say the will expand.
The New York Times, Economy Faces a Jolt as Benefit Checks Run Out: According to an analysis by Moody’s Analytics, almost 20 percent of personal income in the United States comes from welfare programs like jobless benefits, food stamps, Social Security. Moody’s estimates that $37 billion worth of these payments will end by this year, driving down overall consumer spending.
The Wall Street Journal, Crude Bucks Efforts by the IEA to Tame Prices: The Obama administration’s efforts to lower global crude oil prices has failed. After an initial drop, U.S. gasoline futures prices are up 11 percent. Investors are bullish on the long-term price of oil since no new sources of long-term supply have been identified.
The Chicago Sun Times, The disappearing black middle class: According to the Economic Policy Institute, the median net worth of black households has fallen from $13,450 in 2004 to $2,170 in 2009. “The recession is not over for black folks,” Algernon Austin, director of the Economic Policy Institute’s Program on Race, Ethnicity and the Economy, said.
Associated Press, GOP looks for upset in race for Calif. House seat: President Obama won California’s 36th Congressional District by 31 points in 2008, but largely self-funded Republican businessman Craig Huey has a chance to defeat Democrat Los Angeles City Councilwoman Janice Hahn in a special election to replace former Rep. Jane Harman.
Pawlenty: Former Minnesota Gov. Tim Pawlenty went after Rep. Michele Bachmann, R-Minn., on Meet the Press Sunday, calling her record in Congress “non-existent.” The choice in targets is a step down for Pawlenty he used to save his criticism for the frontrunner, former Massachusetts Gov. Mitt Romney.
Bachmann: Bachmann responded to Pawlenty from Iowa: “I was a leading voice, fighting against Obamacare and the unconstitutional individual mandates; I did not lift my voice in praise of it. My message brought tens of thousands of Americans to Washington D.C. to oppose Obamacare. As President I will not rest until Obamacare is repealed. And I will not vote to raise the debt ceiling.”
Romney: The Los Angeles Times has a front page hit on Romney today titled, Romney’s jobs record a little shaky. The story reports that while he was governor, the number of jobs in Massachusetts grew by only 1 percent, the third lowest percentage in the nation.
The Weekly Standard‘s Stephen Hayes notes that while Obama is now demanding a $1 trillion tax increase as part of the debt limit deal, in 2009 Obama said, “You don’t raise taxes in a recession.”
Human Events Jon Hoff flags news that Obama’s stimulus may have even funded an Operation Gunrunner that gave guns to MS-13 in Tampa, Florida.
The Heritage Foundation‘s Bill Beach explains why the U.S. economy is not creating jobs as fast as it should be.
Talking Points Memo gave voice to a maniacal liberal professor who berated Rep. Paul Ryan, R-Wis., in an upscale D.C. restaurant because she was offended by the price of the bottle of wine Ryan’s dinner companions ordered. Ryan paid for his share of the meal so there was no ethics violations, but TPM ran the woman’s story, and the pictures of Ryan she took with her cell phone, anyway.
Slate‘s David Weigel makes the case that Obama’s stimulus actually worked: “Yes, the economy is rotten, so voters can be excused when they pan the government’s response to unemployment. But there’s a lot of data that isn’t terribly hard to read suggesting that the stimulus did create jobs.”
ThinkProgress attacks Pawlenty for his Meet the Press claim that “the science in that regard is in dispute” on the question of whether being gay is a choice.