Ripple Effects Of Debt Ceiling Debate On San Diego
Thursday, July 28, 2011
Federal lawmakers' failure to reach a debt ceiling compromise puts many San Diegans at financial risk. Read where your representative stands on the issue.
SAN DIEGO The federal government does billions of dollars in business with San Diego County. The contracts range from business with private defense contractors to making Social Security payments to seniors. Those payments are in jeopardy unless federal lawmakers reaches a debt ceiling deal by next Tuesday.
Peruse the government website USAspending.gov and search the word San Diego.
Up comes a long list of contracts worth billions. The federal government is obligated to make payments to state and local levels of government including the Health and Human Services Agency; with private companies like General Dynamics Corporation; and with senior citizens on Social Security.
Where They Stand
KPBS asked each member of the San Diego Congressional delegation where they stand on the debt ceiling debate. Here are their responses.
“Speaker Boehner has empowered members of our conference to be leaders and the results are reflected in the passage the Ryan Budget and Cut, Cap and Balance and he continues to ably represent us in negotiations over the debt limit. The result of those discussions, limited as they may be, will be a significant step in the right direction – toward fiscal responsibility and a government that lives within its means. The Speaker has my full support and the support of our conference as he negotiates on behalf of the House of Representatives and the American people.” Rep. Darrell Issa (R) 49th district
“My office has been inundated with calls concerning the debt ceiling crisis. An overwhelming majority of callers want Congress to work together to pay America’s bills and invest in our future. I had a call from a man with cerebral palsy. He works two days a week at McDonald’s, but he relies on Social Security and Medicare to live. We should not be playing with his future. I hoped Congress could have compromised on a package to show that we were serious about solving our problems. Unfortunately, the economy is already starting to react negatively. We need a long-term plan that will stem the tide of uncertainty.” Rep. Susan Davis (D) 53rd district
“Mr. Hunter is still examining the details of the House plan. He hasn’t made a decision. Congressman Hunter believes we need a solution. This debate is about the country’s future and what the next generation of Americans, including his own children, will be left to accept through the decisions made today. Also, the debate is far bigger than raising the debt ceiling, it’s about restoring sanity to the budget and ensuring we are no longer borrowing 40 cents on every dollar. And I’ll say this about the vote: Congressman Hunter has some reservations with the plan that’s now on the table, but, he’ll take a closer look at the final product, when it’s available, and make a decision based on what it actually looks like." Spokesperson for Rep. Duncan D. Hunter (R) 52nd district
“The United States will make good on its debt obligations, but reaching our debt limit is only a symptom of the real problem. Forty-cents out of every dollar our government spends is borrowed. We are not just borrowing from China to the tune of $1.16 trillion, we are stealing from our grandchildren. In order to restore certainty in our economy to bolster job growth and keep America competitive we need to stop spending money we don’t have. Raising the debt limit without a credible plan to end Washington’s wasteful spending will destroy jobs and make our debt problems even worse.” Rep. Brian Bilbray (R) 50th district
Rep. Bob Filner (D) 51st district, did not respond to our request.
The state of California has secured a $5 billion loan to make good on Medicare, transportation, and education payments if the federal government stops paying. But many private companies and individuals could be left unpaid through no fault of their own.
“Vendors who contract with the federal government, they could get hurt; Social Security recipients, students that have loans,” said Tom Dresslar, spokesperson for the California Treasurer.
Dresslar warns the ripple effect of failure to meet the debt ceiling deadline ultimately affects just about everyone in some way. Californians are already on the hook for a $4 million interest payment due in November, as a result of the loan it has arragned in case the federal government fails to make state payments.
That's money taxpayers have to pay as a result of the debt ceiling impasse, Dresslar said.
Meanwhile in Washington, Republican leaders on Thursday convinced a growing number of their fractious rank and file to support a House plan to stave off an unprecedented government default. Many of the chamber's GOP freshmen, crucial to passage, were climbing aboard, but leaders stopped short of claiming victory.
If the House approved the bill, it would bring President Barack Obama and congressional leaders a step closer to endgame efforts for a debt-limit solution before Tuesday's deadline.
At an afternoon news conference, Speaker John Boehner, R-Ohio, said the House would act on legislation that he called "a sincere, honest effort to end this crisis." Rival Democratic leaders moved ahead on the assumption that Boehner would prevail in rallying Republicans to back the legislation.
Republicans are seeking deep spending cuts in exchange for raising the nation's $14.3 trillion debt limit to allow the government to keep paying its bills. The White House has threatened to veto the GOP bill if it makes it through the Democratic-controlled Senate. Still, getting the newly modified House plan passed on Thursday was seen as an important step toward finding a compromise - possibly in the Senate.
Rival plans by Boehner and Senate Democratic leader Harry Reid have enough in common - including the establishment of a special congressional panel to recommend additional spending cuts this fall - that Reid has hinted a compromise could be achievable.
As debate got under way in the House, Reid said the Senate would vote on the GOP bill as soon as the House finished late Thursday - and predicted it would fail in his chamber.
"No Democrat will vote for a short-term Band-Aid that would put our economy at risk and put the nation back in this untenable situation a few short months from now," Reid said.
Earlier in the day, in a closed-door GOP meeting, Boehner, R-Ohio, made headway in securing the 217 votes necessary to pass his plan. No Democrats were expected to support it. Boehner told the Republicans he expected to round up enough votes but was not there yet.
"But today is the day," he said, according to people in the room.
Later, Boehner said the bill "is as large a step as we're able to take at this point in time that is doable and signable and to become law," he said.
Standing with Boehner, Rep. Kevin McCarthy, R-Calif., who counts the votes, offered no numbers, but said they were moving in the right direction.
The bill passed an early hurdle as the House voted 238-186 along party lines to move forward on the legislation.
Some lawmakers were climbing behind it, though sometimes grudgingly.
"I think it's the best deal we can get," said Rep. Steve Chabot, R-Ohio, who said he had dropped his opposition. Rep. Walter Jones, R-N.C., said he would back the measure to ensure that Boehner "has a seat at the table" for the final negotiations.
Critical to Boehner is support from his chamber's 87 freshmen, who lifted the GOP to its House majority last November, many of them with tea party support from the right. More than a dozen freshmen told reporters that a significant number of their class were now backing Boehner's plan
"It is not a perfect plan, certainly, but it is a good step forward," said Rep. Tim Griffin, R-Ark., one of the newcomers.
The White House expected Boehner to rally enough Republicans for the measure, with adviser David Plouffe saying it will "pass out of the House in partisan fashion." The House has 240 Republicans and 193 Democrats with two vacancies. Boehner can only afford to lose two dozen members.
Wall Street warily watched the standoff in Washington. Stocks rose modestly for much of the day, then faded. The Dow Jones industrial average declined 62 points, the fifth straight daily drop.
The Treasury Department moved ahead with plans to hold its regular weekly auction of three-month and six-month Treasury securities on Monday. The department said it would provide additional information on how it would pay its bills if the deadline should pass without an increase in the nation's borrowing authority.
While the Boehner and Reid measures differ in key details, they also share similarities that underscore the concessions made by the two sides in recent days. Reid's bill does not envision a tax increase to reduce deficits, a bow to Republicans. But neither does the House measure require passage of a constitutional balanced budget amendment for state ratification, a step in the direction of Obama and the Democrats.
At the White House, spokesman Jay Carney said, "What a compromise looks like is pretty clear: significant deficit reduction, a mechanism by which Congress would take on the tough issues of tax reform and entitlement reform, and a lifting of the debt ceiling beyond -- into 2013, so that we do not have the cloud of uncertainty that is hanging over our economy right now."
In the House, Boehner made headway with balky conservatives unhappy that the measure contains smaller spending cuts than a more-stringent debt measure that passed the House last week. The new measure depends on caps on agency budgets to cut more than $900 billion from the deficit over the coming decade while permitting a commensurate increase in the nation's borrowing to allow the government to pay its bills.
Boehner argued that the measure represented "the best opportunity we have to hold the president's feet to the fire. He wants a $2.4 trillion blank check that lets him continue his spending binge through the next election. This is the time to say no." Boehner made the comments Wednesday to conservative radio host Laura Ingraham.
The White House threatened a veto, saying the bill did not meet Obama's demand for an increase in the debt limit large enough to prevent a rerun of the current crisis next year, in the heat of the 2012 election campaign.
"It's inconceivable to me that the president would actually follow through on this threat," Senate Minority Leader Mitch McConnell, R-Ky., said Thursday.
McConnell accused Democrats of "playing with fire" in planning to block the Boehner proposal in the Senate.
Obama supports an alternative drafted by Reid that contains comparable cuts to agency operating budgets but also claims savings from lowball estimates of war costs. Reid's plan would provide a record-breaking $2.7 trillion in additional borrowing authority, enough to tide the government over through 2012. Reid, however, is plainly short of the votes needed to overcome a GOP filibuster.
Unless Congress acts by Tuesday, administration officials say, the government will not be able to pay all its bills. They include $23 billion in Social Security benefits due Aug. 3, an $87 billion payment to investors to redeem maturing Treasury securities and more than $30 billion in interest payments that come due Aug. 15.
Treasury Secretary Timothy Geithner and other officials warn that a default could prove catastrophic for an economy still recovering from the worst recession in decades. But some skeptics, including conservative Republicans like Sen. Pat Toomey of Pennsylvania, say Geithner can manage Treasury's cash flow to avoid a catastrophe if Congress fails to act.
House Republicans tweaked their measure Wednesday to enhance its prospects of passage after a worse-than expected cost estimate from congressional budget analysts on Tuesday. The changes were modest, but under arcane budget conventions, they brought projected savings for 2012 to $22 billion, part of a 10-year cut of $917 billion. That would trigger a $900 billion increase in the debt limit.
Boehner showed fire in a meeting Wednesday with the Republican caucus.
"Get your ass in line," Boehner told the rank and file. "I can't do this job unless you're behind me."
The speaker still faced resistance.
Rep. Louie Gohmert, R-Texas, said he is still "a beat up no" vote after Thursday's session.
Plouffe was interviewed on MSNBC.
The Associated Press contributed to this report.
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