AP Photo/Jim Watson
Published Monday, July 25, 2011 | 6:30 p.m.
Updated Monday, July 25, 2011 | 7:12 p.m.
WASHINGTON — In unprecedented back-to-back appearances on nationwide television, President Barack Obama and House Speaker John Boehner clashed Monday night over the cause and cure for the nation's debt crisis. The two men spoke as Congress remained gridlocked on legislation to avert a threatened default after Aug. 2.
Decrying a "partisan three-ring circus" in the nation's capital, Obama assailed a newly minted Republican plan to raise the nation's debt limit as an invitation to another crisis in six months' time. He said congressional leaders must produce a compromise that can reach his desk before the deadline.
"The American people may have voted for divided government, but they didn't vote for a dysfunctional government," the president said in a hastily arranged prime-time speech. He appealed to the public to contact lawmakers and demand "a balanced approach" to reducing federal deficits — including tax increases for the wealthy as well as spending cuts.
Responding moments later from a room near the House chamber, Boehner said the "'crisis atmosphere" was of the president's making.
"The sad truth is that the president wanted a blank check six months ago, and he wants a blank check today. That is just not going to happen," the speaker said. "The president has often said we need a 'balanced' approach, which in Washington means we spend more, you pay more."
Obama stepped to the microphones in the East Room of the White House a few hours after Republican lawmakers, then his own Democrats, drafted rival emergency legislation to head off a potentially devastating default.
The back-to-back speeches did little to suggest that a compromise was in the offing, and the next steps appeared to be votes in the House and Senate on the rival plans by mid-week.
Despite warnings to the contrary, U.S. financial markets have appeared to take the political maneuvering in stride — so far. Wall Street posted losses Monday but with no indication of panic among investors.
Without signed legislation by day's end on Aug. 2, the Treasury will be unable to pay all its bills, possibly triggering an unprecedented default that officials warn could badly harm a national economy still struggling to recover from the worst recession in decades.
Obama wants legislation that will raise the nation's debt limit by at least $2.4 trillion in one vote, enough to avoid a recurrence of the acrimonious current struggle until after the 2012 elections.
Republicans want a two-step process that would require a second vote in the midst of the 2012 campaign with control of the White House and both houses of Congress at stake.
Monday night's speeches were a remarkable turn in a six-month-old era of divided government as first the president, then his principal Republican opponents appealed to the nation in a politically defining struggle.
Obama quoted Ronald Reagan — a hero to many conservatives — who also spoke of a balanced plan and stressed a need for compromise. Obama stopped well short of threatening a veto of the GOP-drafted legislation that he criticized.
Boehner's remarks seemed aimed at the general public and also at conservatives — tea party advocates included — who installed the Republicans in power in the House last fall.
There were concessions from both sides embedded in Monday's competing legislation, but they were largely obscured by the partisan rhetoric of the day.
With their revised plan, House Republicans backed off an earlier insistence on $6 trillion in spending cuts to raise the debt limit.
And while the president didn't say so, his embrace of legislation unveiled by Senate Majority Leader Harry Reid effectively jettisoned his longstanding call for increased government revenues as part of any deficit reduction plan.
The measure Boehner and the GOP leadership drafted in the House called for spending cuts and an increase in the debt limit to tide the Treasury over until sometime next year. A second increase in borrowing authority would hinge on approval of additional spending cuts sometime during the election year.
Across the Capitol, Reid wrote legislation that drew the president's backing, praise from House Democratic leader Nancy Pelosi — and criticism from Republicans.
Not all Republicans were happy with their leadership's decision to scale back legislation that had cleared the House last week, only to die in the Senate.
Among House conservatives who have provided the political muscle for the Republican drive to cut spending, the revised legislation was a disappointment. "I cannot support the plan," said Rep. Jim Jordan of Ohio, one of the leading advocates of legislation that cleared the House last week and died in the Senate.
But two rank-and-file Republicans said their constituents were voicing concerns other than the rising federal debt.
Rep. Tom Rooney, R-Fla., said his office is getting calls from constituents saying, "If I don't get my Social Security check, it's your fault."
Rep. Tom Reed, a New York freshman, said many of his constituents are telling him to stand firm in his drive to cut spending. "But I will admit there's some anxiety in the district" about Social Security and other programs, he added.
As Boehner readied his legislation, Senate Democratic leaders called a news conference to announce their own next steps.
The Democrats' measure would cut $2.7 trillion in federal spending and raise the debt limit by $2.4 trillion in one step — enough borrowing authority to meet Obama's bottom-line demand.
The cuts include $1.2 trillion from across a range of hundreds of government programs and $1 trillion in savings assumed to derive from the end of the wars in Afghanistan and Iraq.
Boehner ridiculed the $1 trillion in war savings as gimmicky, but in fact, they were contained in the budget the House passed earlier in the year.
The legislation also assumes creation of a special joint congressional committee to recommend additional savings with a guaranteed vote by Congress by the end of 2011.
Yet in the maneuvering it appeared another of the president's long-held conditions appeared to be in danger of rejection.
Neither Boehner's measure nor the one Reid was drafting included additional revenue, according to officials in both parties.
In addition to a two-step approach to raising the debt limit, the House measure would require lawmakers in both houses to vote later this year on a constitutional amendment requiring a balanced federal budget.
An earlier bill, passed in the House last week but then scuttled in the Senate, would have required Congress to approve an amendment and send it to the states for ratification.
That same bill would have made $6 trillion in spending cuts in exchange for raising the debt limit.
Obama promised to veto that bill even before the House voted on it.
Each side offered accounts of secret maneuvering designed to put the other side in a poor light.
Democratic officials said Obama called Boehner on Saturday night, one day after the collapse of compromise talks, and offered to reduce his demand for new tax revenue by $400 billion.
In return, Obama said that he wanted Republicans to abandon their demand to cancel parts of the year-old health care law if future deficit cuts did not materialize.
This official said Boehner rejected the proposal on Sunday.
Republicans disputed that account — and offered one of their own.
In their version of events, Reid agreed on Sunday night to a two-step approach to raising the debt limit that Obama has rejected.
Democrats denied it.
None of the officials involved would agree to be quoted by name.
Associated Press writers Andrew Taylor, Donna Cassata, Alan Fram, Ben Feller and Jim Kuhnhenn contributed to this story.