Open Thread & News Round-Up: Debt Negotiations

Here's the latest...

The Hill—House GOP passes ill-fated 'cut, cap, and balance' legislation:

House Republicans on Tuesday approved an ambitious but legislatively ill-fated plan to enact deep spending restraints that could clear the decks for a compromise over the debt limit.

The so-called "cut, cap and balance" measure passed on a party-line vote, 234-190, as nine Republicans — including presidential candidates Michele Bachmann (Minn.) and Ron Paul (Texas) — and five Democrats defected.

Democrats excoriated the GOP for advancing the bill, which the White House has threatened to veto.

WaPo—Obama hails deficit-reduction plan gaining momentum in Senate: "President Obama on Tuesday hailed an ambitious new deficit-reduction plan that is gaining momentum in the Senate, calling it a 'very significant step' and saying it could provide the vehicle to break an impasse over raising the federal borrowing limit while cutting the nation's debt. Appearing at the regular White House news briefing, Obama said the bipartisan proposal is 'broadly consistent' with the approach he has advocated, in that it reduces discretionary spending and tackles health-care spending and entitlements while also raising additional revenue."

Ezra Klein in the WaPo—The Gang of Six's plan: Better than we're likely to do otherwise: "All in all, it looks a lot like the Simpson-Bowles plan, which was pretty much the point of the exercise. ... So though there's lots to argue with in this bill, and lots that I, personally, would like to change, I don't think there's much doubt that it's far better than what Congress is likely to do — or not do — if it fails."

The Hill—Key Dems: Gang of Six plan won't be ready for debt-limit deal by Aug. 2: "Senate Democratic whip Dick Durbin (Ill.), a member of the Gang of Six, said Tuesday the group's plan is not ready to be attached to legislation to increase the debt limit. ... Durbin said it could take weeks or months for the Congressional Budget Office to estimate the deficit-reduction effect of the massive package. He said flatly there is no time to do it before national borrowing authority runs out Aug. 2."

This is just such a clusterfuck. I don't even know what to say anymore.

Relatedly...

Think Progress—Nearly 10 Years Ago Today, the U.S. Began Borrowing Billions to Pay for the Bush Tax Cuts:

As debates about deficit reduction continued to be heavily tilted toward cutting spending, which threatens to undermine a fragile recovery, rather than raising revenue from those who can afford it, it's important to remember the budgetary impact of the Bush tax cuts.

Nearly 10 years ago today, on August 1, 2001, the Associated Press reported that the Treasury Department was tapping $51 billion of credit in order to pay for the budgetary cost of the first round of Bush tax cuts' rebate checks. The AP reported at the time that Democratic Party opponents of the tax cuts worried that they'd return government budgets to "red ink."

...The opponents of the tax cut turned out to be right. The 2001 and 2003 tax cuts combined have blown a $2.5 trillion hole in America's budget and created deficits stretching on for years.

Discuss.