Both Parties Still At Odds Over US Debt
Online, July 25, 2011 (Newswire.com) - Today, Speaker of the House John Boehner announced to legislators that, despite the danger of a veto and the fact that negotiations in Congress are at a dead-end while the August 2 deadline looms near, he favors adding a short-term increase to the country's debt limit over President Barack Obama's proposed solution to the US's debt problem.
During a teleconference on Sunday afternoon, Boehner told rank-and-file Republicans that they should join together as a team to block Obama's proposed $2.4 trillion increase to the current $14.300 trillion debt ceiling limit, which also stipulates all the funds are received simultaneously without having to give any guarantees on cutting government spending. Boehner's comments were relayed to the press by someone closely involved with the course of the discussions.
The Speaker of the House also said that no one wants to see the US default on its debt, therefore he is proposing a plan of only a short-term, $1 trillion increase in the debt ceiling while simultaneously cutting spending by at least as much as Obama had proposed. However, the White House said that Obama would veto such a bill.
American stock futures tumbled after the debt negotiations fell through, which subsequently heightened concerns over the likelihood of a default on US treasury obligations. In particular, futures on the S&P 500 Index are anticipated to fall on Monday after their 1.4% rally last week to a three-year high. A futures contract on the S&P 500, which expires in September, fell 1.2% to 1,325.50 points at 7:01AM in Tokyo. Deep Trust Trading analysts noted that the US dollar fell against the Euro, yen, and Swiss franc.
According to someone familiar with the details of the meeting that took place, Boehner told his fellow party members that Obama wants the right to further issues of treasury obligations so that this issue henceforth would no longer be brought up in Congress after the next elections. In order to prevent this, Boehner suggested that Republicans develop something that could pass in both chambers of Congress. Speaking before a group which included a large number of Tea Party supporters, Boehner said that implementing such a plan would require some sacrifices in order to maximize its influence. Yesterday, Boehner added that he wanted to send a positive signal to the market by the time the Asian markets opened in the second half of the day (Washington time) by concluding a deal which would increase the debt ceiling. However, given the lack of evidence that such a compromise was reached, President Obama called an emergency meeting in the White House with Senate Majority Leader Harry Reed and House Minority Leader Nancy Pelosi.
Deep Trust Trading analysts reported that the dollar had fallen to $1.4390 against the Euro as of 6:01AM in Tokyo, compared to $1.4360 in New York at the end of last week. The dollar had fallen to 78.35 against the yen as of July 22. The franc increased to 81.17 per dollar, up from 81.92 last week after reaching a record high of 80.33 against the dollar on July 18. The yen is trading at 112.75 against the Euro after an increase to 112.77.
Deep Trust Trading Analytical Department