House Speaker John Boehner's new, two-step debt-limit increase to cut spending by nearly $3 trillion calls FOR raising the debt limit right now by up to $1 trillion, with an accompanying $1.2 trillion in budget cuts over 10 years. The House-Senate panel would have to come up with an additional $1.8 trillion in spending cuts.
Boehner's plan, modeled after the military base-closing concept, would put the panel's recommendations on a fast-track, up-or-down vote that would allow no amendments.
Obama could request an extension of the debt ceiling next year, but it would require a two-thirds majority in each house to block it.
Senate Democratic Leader Harry Reid's plan calls for fully raising the debt limit now, with $2.7 trillion in spending cuts, but no new tax revenues, over 10 years.
Somewhere between these two proposals there are the makings of a compromise, though Obama and the Democrats don't want to face another debt-limit vote in 2012 that will only remind voters of the explosion of deficits and debt under his spendthrift presidency.
Whether Boehner can muster a majority of the 240 Republicans who run the House remains unclear. But it seems more likely now that he bowed to tea party demands to include future spending caps and another vote on a constitutional balanced-budget amendment -- provisions that the Senate have already rejected.
Obama's politically weakened presidency is likely to become weaker by week's end if new numbers show that the economy is growing even more slowly than was previously evident.
The Commerce Department Friday will announce its economic growth estimates for the second quarter, and the news isn't expected to be good.
"The report is set to be another disappointment, with forecasters expecting a 1.7 percent annual rate of growth," down from an anemic 1.9 percent GDP rate in the first quarter, writes Washington Post economic reporter Neil Irwin. That's well below the level needed to bring the 9.2 unemployment rate down anytime soon.
Obama didn't have much, if anything, to say about the economy in his speech Monday night, and with good reason. He's getting failing grades from an overwhelming majority of the voters on an economy that is veering dangerously closer to another recession.
Seventy-three percent of Americans "said the economy is getting worse," a national daily tracking survey showed over the weekend, according to the Gallup Poll.
"This is up 11 percentage points from the three days ending July 6, and the worst level for this measure since March 2009," Gallup said Monday.