The plan also includes a trillion dollars worth of cuts now and then a second round of deficit reduction to be decided upon by a “super committee,” and this could include both increased revenues and spending cuts. If the committee can’t agree, it would trigger across the board cuts in all (most?) government programs.
Host David Gregory says he has spoken to “top figures on Wall Street” who say this is a “code red day, all hands on deck” preparing for a market shock as early as tomorrow.
Plouffe says that sometime soon, the Treasury Department will lay out exactly what will happen in case of default, specifically who will and will not be paid with the remaining money in US accounts.
Plouffe repeated the White House position that the 14th amendment is not an option for solving this crisis.
Gregory asks Plouffe if Washington’s failure to lead opens the door to a serious third party movement. Plouffe dances in his answer.
Next up were Senators Jim Thune (R-SD) and Claire McCaskill (D-MO). Thune says he wants a plan with no tax increases, spending cuts at least equal to the amount by which the debt ceiling is raised, and a path to entitlement reforms. He says in the current plan being discussed, the “super committee” could include revenue increases, but he hopes that if they do, it will be about reform which broadens the tax base and lowers tax rates.
McCaskill says, “Republicans have voted to keep giving taxpayer checks to Big Oil while voting to convert the Medicare system to vouchers. This does not compute for us.”
Thune likes the across-the-board enforcement option. McCaskill is in favor of Medicare reform which might mean that we “stop buying Warren Buffet his prescription drugs,” but stops short of turning the system into a voucher program.
In the roundtable, CNBC’s Jim Kramer says the range of concern on Wall Street about what US default would mean is staggering. We could easily see a 2 to 3% drop in the markets, maybe more, if nothing is done. He later adds that we are looking at a new recession, this time caused by government.
NBC’s Tom Brokaw adds that a “political default” is already in place. The people now have no confidence in the system. Brokaw says Gov. John Kasich (R-OH) told him the next step in this process should be real reform, not just slashing of spending. He says we mismanaged the growth of government, let’s not mismanage the shrinking as well.
Rep. Raul Labrador (R-ID) says Senate Majority Leader Harry Reid has not been telling the truth about a specific compromise plan discussed last week. Labrador’s focus on the day to day details of these politics is disturbing at this point of the crisis.
A little later, former Gov. Jennifer Granholm (D-MI) makes a point about real economic growth coming from improving the business climate. You might think a fiscal conservative like Rep. Labrador would applaud this. But instead he comes back with a set of facts he brought with him about how unemployment soared during Granholm’s time in office. This was a very odd exchange. What was Labrador’s end game?
Throughout the program, Rep. Labrador showed a tendency to take small differences and turn them into ideological swords. He seemed to have no sense of the gravity of the current situation. He was like a man in a burning building complaining that the chairs were uncomfortable.
Brokaw may have been reacting to this when he pointed out that there are no political winners in this crisis. Everyone comes out looking like a loser.
Later, however, Brokaw said the tea party people did what Americans have done throughout history. They got angry, they got organized, they got people elected, and they brought about change. He said, that path is still open to anyone who doesn’t like these changes.
Today’s Meet The Press transcript will be here.
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