The Obama-Pimco fear-mongering duet is chanting the same sour notes again today. This time the spotlight is on the president.
Bloomberg reports Obama Assails Republicans as Gulf in U.S. Debt-Limit Talks Remains Wide
President Barack Obama accused Republicans of siding with corporate jet owners over children and the elderly in deficit negotiations and compared Congress’s work ethic unfavorably with that of his pre-teen daughters.
Obama’s comments underscored the distance between the White House and Republicans on talks to cut the deficit and raise the government’s debt limit as Standard & Poor’s warned it would downgrade U.S. debt to junk status in the event of a default and the Senate canceled its July 4 recess to continue talking.
“The yellow light is flashing,” Obama said yesterday during a news conference, warning of dire consequences if Congress doesn’t raise the borrowing limit before Aug. 2, when the Treasury Department projects it will no longer be able to meet all its obligations.
“This is a jobs issue,” he said. “This is not an abstraction. If the United States government, for the first time, cannot pay its bills, if it defaults, then the consequences for the U.S. economy will be significant and unpredictable.”
If the U.S. misses a payment on its debt because Congress doesn’t raise the debt ceiling in time, Standard & Poor’s would cut the U.S. credit rating from its sovereign top-level AAA ranking to D, the last rung on its scale, said John Chambers, chairman of the company’s sovereign rating committee.
Obama cast the differences in moral terms. “Before we ask our seniors to pay more for health care, before we cut our children’s education,” he said, “it’s only fair to ask an oil company or a corporate jet owner that has done so well to give up that tax break that no other business enjoys.”
House Speaker John Boehner rebuffed him, saying in a statement issued soon afterward that Obama “is sorely mistaken if he believes a bill to raise the debt ceiling and raise taxes would pass the House. The votes simply aren’t there, and they aren’t going to be there.”
Senator Tom Coburn, an Oklahoma Republican who last month dropped out of a bipartisan group of senators trying to reach a deficit-reduction deal, said on PBS’s “The Charlie Rose Show” on June 28 that it is increasingly likely House Republicans won’t act on the debt limit by the Aug. 2 deadline.
“If we don‘t have major changes to entitlements, I don‘t see how you get that vote through the House,” Coburn said.
Obama Sings the Pimco “Unpredictable” Note
Obama is singing the same tune as Pacific Investment Management Co. LLC Chief Executive Officer Mohamed El-Erian who said “We would be in the land of the unpredictable if lawmakers fail to reach an agreement to raise the $14.3 trillion debt ceiling“.
Like the president, El-Erian is singing his book. For details, please see “Land of the Predictable”: Pimco CEO Warns U.S. Debt Default Might Have “Catastrophic” Effect
As noted previously, president Obama is a hypocrite.
President Obama’s Hypocrisy
Inquiring minds just may be interested in knowing Obama’s track record on debt ceilings when he was Senator Obama.
The Obama administration is warning of catastrophic consequences if Congress does not increase the debt ceiling, the legal limit on how much the federal government can borrow, but Barack Obama held a different view on the issue as a senator in 2006.
Five years ago, then-Sen. Obama (D-Ill.) voted against raising the debt ceiling and even spoke about it on the Senate floor before the Republican-controlled Senate voted 52-48 to increase it.
“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure,” Obama said on March 16, 2006. “Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.”
Failure of Leadership
I remind the president “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”
Expect Duet to Grow to Mormon Tabernacle Choir Size
As we approach the deadline, expect the duet to grow in size. To be fair, there are a more than a handful of fear-mongers already. Ben Bernanke wants Congress to do something about the deficit, just not now. So does the IMF. Other Fed governors have chimed in with similar statements already.
Yellow Light is Flashing
I agree with the president that a “yellow light is flashing”. The president however, does not understand the meaning. The light is flashing because the time to do something about the budget deficit is now.
Please disregard the self-serving fear-mongering of president Obama and Pimco CEO El-Erian. Americans deserve better, and the way to do that is to act responsibly on a deficit-reduction package now, not 10 years from now.
Phone your Congressional representative and let them know what you think.
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Mike “Mish” Shedlock
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