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Debt-ceiling talks hit brick wall as President Obama, GOP trade jabs

The Hill.com

President Obama and GOP leaders traded accusations Monday over who was to blame as talks to raise the nation’s $14.3 trillion debt ceiling stalled over the size and scope of the package.

Both sides pointed to the other as inflexible as the odds increased that Congress will not raise the nation’s borrowing limit by an Aug. 2 deadline.

Obama said Republicans were refusing to allow any tax hikes in the deal, including provisions aimed at the wealthiest taxpayers, while Republicans said the White House’s insistence on tax increases and resistance to meaningful Social Security and Medicare reforms was the problem.

Obama said during a late morning press conference that he had “bent over backwards” to meet the GOP halfway. “I do not see a path to a deal if they do not budge. Period,” Obama said.

IMF chief calls on US to raise borrowing limit

CNBC

The International Monetary Fund's new chief foresees "real nasty consequences" for the U.S. and global economies if the U.S. fails to raise its borrowing limit.

Christine Lagarde, the first woman to head the global lending institution, said in an interview broadcast Sunday that it would cause interest rates to rise and stock markets to fall. That would threaten an important IMF goal, which is preserving stability in the world economy, she said.

The U.S. borrowing limit is $14.3 trillion. Obama administration officials say the U.S. would begin to default without an agreement by Aug. 2.

"If you draw out the entire scenario of default, yes, of course, you have all of that — interest hikes, stock markets taking a huge hit and real nasty consequences, not just for the United States, but for the entire global economy, because the U.S. is such a big player and matters so much for other countries," she said.

McConnell rallies, invites Obama to Hill again

Politico

Senate Minority Leader Mitch McConnell took to the floor Tuesday to again invite President Barack Obama to the Hill to hash out a deal on the debt ceiling debate. McConnell made the same request last Thursday, but the White House brushed off the invite.

“I think the best way to solve this impasse is for the president to hear what needs to be done, and how we can do it — hear what can actually pass here in Congress,” McConnell said Tuesday. “He needs to understand the principle at stake here from our point of view.”

White House press secretary Jay Carney said after McConnell’s first attempt that the top Senate Republican only invited the president to “restate their maximalist position,” rather than engage in genuine negotiation.

Obama’s Economists: ‘Stimulus’ Has Cost $278,000 per Job

The Weekly Standard.com

When the Obama administration releases a report on the Friday before a long weekend, it’s clearly not trying to draw attention to the report’s contents. Sure enough, the “Seventh Quarterly Report” on the economic impact of the “stimulus,” released on Friday, July 1, provides further evidence that President Obama’s economic “stimulus” did very little, if anything, to stimulate the economy, and a whole lot to stimulate the debt.

The report was written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama, and it chronicles the alleged success of the “stimulus” in adding or saving jobs. The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.

In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead.

Furthermore, the council reports that, as of two quarters ago, the “stimulus” had added or saved just under 2.7 million jobs — or 288,000 more than it has now. In other words, over the past six months, the economy would have added or saved more jobs without the “stimulus” than it has with it. In comparison to how things would otherwise have been, the “stimulus” has been working in reverse over the past six months, causing the economy to shed jobs.

Shopping at Amazon.com Inc. and other major Internet stores is poised to get more expensive.

Los Angeles Times

Beginning Friday, a new state law will require large out-of-state retailers to collect sales taxes on purchases that their California customers make on the Internet — a prospect eased only slightly by a 1-percentage-point drop in the tax that also takes effect at the same time.

Getting the taxes, which consumers typically don't pay to the state if online merchants don't charge them, is "a common-sense idea," said Gov. Jerry Brown, who signed the legislation into law Wednesday.

The new tax collection requirement — part of budget-related legislation — is expected to raise an estimated $317 million a year in new state and local government revenue.

GOP: Politics behind oil reserve release

OneNewsNow

The Obama administration is being accused of playing politics with the nation's oil reserves, while the president defended the move last week saying it was necessary because of the oil supplies lost due to Middle East turmoil.

The release from the U.S. Strategic Petroleum Reserve will be the largest ever, amounting to half of a 60-million-barrel international infusion of oil planned for the world market over the next month.

Representative Tim Huelskamp (R-Kansas), along with other GOP leaders and business groups, accuses President Barack Obama of playing politics with the country's oil reserves, which are intended to address emergencies.

Tim Huelskamp"It's mystifying," says Huelskamp. "We don't know why he did that. It seems to be very political and a very bad decision, in my opinion. That is a resource that is to be tapped in times of severe crisis."

Obama Will 'Co-Invest' Tax Dollars in Corporate-Government Partnership

CNS News

In his weekly address released Saturday, President Barack Obama called for a campaign of "nation building here at home," citing as an example of what is needed to rebuild the American economy an initiative he announed Friday to "invest" tax dollars in what he called a "partnership" between the federal government and an initial group of 11 major corporations.

The administration's corporate partners in this venture include Caterpiller, Corning, Dow Chemical, Ford, Honeywell, Intel, Johnson and Johnson, Allegheny Technologies, Stryker and Proctor and Gamble.

Obama is not seeking new legislation from Congress to authorize his government-corporate partnership program--which he is calling the "Advanced Manufacturing Partnership"--and he did not say how the corporations in the partnership had been chosen.

"The President’s plan, which leverages existing programs and proposals, will invest more than $500 million to jumpstart this effort," the White House said in a statement released Friday.

Bullet 333Barry Asmus, Senior Economist, National Center for Policy Analysis
Bullet 333David Bossie, President, Citizens United
Bullet 333Dan Celia, Host, "Financial Issues Live" Radio Program
Bullet 333Phil Clements, Managing Director, Center for Christian Business Ethics Today, LLC.
Bullet 333Chuck Colson, Prison Fellowship
Bullet 333Ward Connerly, Author/Founder and Chairman, American Civil Rights Institute
Bullet 333Tom DeLay, Former House Majority Leader, United States House of Representatives
Bullet 333William Devlin, National President, Redeem The Vote
Bullet 333Chuck Donovan, Senior Research Fellow-DeVos Center for Religion a, The Heritage Foundation
Bullet 333James Edwards, Cofounder, Olive, Edwards, & Cooper, LLC
Bullet 333Steve Elliott, President, Grassfire.org
Bullet 333Joseph Farah, CEO, Founder, WorldNetDaily
Bullet 333Frank Gaffney, Founder and President , Center for Security Policy
Bullet 333James Gelfand, Senior Manager of Health Policy, U.S. Chamber of Commerce
Bullet 333Lou Giuliano, Chairman, President and Chief Executive Officer (r, ITT Corporation
Bullet 333Rick Green, President, Torch of Freedom Foundation
Bullet 333Colin Hanna, Colin Hanna, President, Let Freedom Ring USA
Bullet 333Lowman Henry, Chairman & CEO, Lincoln Institute of Public Opinion Research, Inc.
Bullet 333Larry Hunter, President, The Social Security Institute
Bullet 333Phillip Kim, Assistant Professor of Management and Human Resour, University of Wisconsin-Madison School of Business
Bullet 333Cliff Kincaid, President, America's Survival, Inc.
Bullet 333Jennifer Marshall, Director of Domestic Policy Studies, The Heritage Foundation
Bullet 333Gary Marx, Executive Director, Judicial Confirmation Network
Bullet 333Ryan Messmore, William E. Simon fellow in Religion and a Free Soc, The Heritage Foundation
Bullet 333Joe Murray, Columnist, The Bulletin
Bullet 333Grover Norquist, President, Americans for Tax Reform (ATR)
Bullet 333Phyllis Schlafly, President and Founder, Eagle Forum
Bullet 333Chuck Stetson, Co-founder and Managing Director, PEI Funds
Bullet 333Tony Strickland, Taxpayer Advocate
Bullet 333Lorianne Updike, President & Executive Director, The Constitutional Sources Project
Bullet 333John Weiser, Board Member, Westminster Theological Seminary , In Medias Res

Conservatives’ Pledge: No Debt-Limit Hike Without Limits on Spending, Taxes

CNS News

Conservative Americans are sounding a call to “cut, cap and balance” the federal budget.

On Wednesday, leading conservatives from the U.S. Senate and House of Representatives joined a broad coalition of conservative activists to unveil a pledge that commits lawmakers to oppose any increase in the debt limit unless substantial cuts in spending are made to reduce the deficit next year, enforceable spending caps are enacted to put the federal government on a path to a balanced budget, and Congress passes a constitutional balanced budget amendment that permanently limits federal spending and requires a supermajority for enacting tax increases.

It is called the “Cut, Cap and Balance” pledge.

Bullet 333Barry Asmus, Senior Economist, National Center for Policy Analysis
Bullet 333David Bossie, President, Citizens United
Bullet 333Dan Celia, Host, "Financial Issues Live" Radio Program
Bullet 333Phil Clements, Managing Director, Center for Christian Business Ethics Today, LLC.
Bullet 333Chuck Colson, Prison Fellowship
Bullet 333Ward Connerly, Author/Founder and Chairman, American Civil Rights Institute
Bullet 333Tom DeLay, Former House Majority Leader, United States House of Representatives
Bullet 333William Devlin, National President, Redeem The Vote
Bullet 333Chuck Donovan, Senior Research Fellow-DeVos Center for Religion a, The Heritage Foundation
Bullet 333James Edwards, Cofounder, Olive, Edwards, & Cooper, LLC
Bullet 333Steve Elliott, President, Grassfire.org
Bullet 333Joseph Farah, CEO, Founder, WorldNetDaily
Bullet 333Frank Gaffney, Founder and President , Center for Security Policy
Bullet 333James Gelfand, Senior Manager of Health Policy, U.S. Chamber of Commerce
Bullet 333Lou Giuliano, Chairman, President and Chief Executive Officer (r, ITT Corporation
Bullet 333Rick Green, President, Torch of Freedom Foundation
Bullet 333Colin Hanna, Colin Hanna, President, Let Freedom Ring USA
Bullet 333Lowman Henry, Chairman & CEO, Lincoln Institute of Public Opinion Research, Inc.
Bullet 333Larry Hunter, President, The Social Security Institute
Bullet 333Phillip Kim, Assistant Professor of Management and Human Resour, University of Wisconsin-Madison School of Business
Bullet 333Cliff Kincaid, President, America's Survival, Inc.
Bullet 333Jennifer Marshall, Director of Domestic Policy Studies, The Heritage Foundation
Bullet 333Gary Marx, Executive Director, Judicial Confirmation Network
Bullet 333Ryan Messmore, William E. Simon fellow in Religion and a Free Soc, The Heritage Foundation
Bullet 333Joe Murray, Columnist, The Bulletin
Bullet 333Grover Norquist, President, Americans for Tax Reform (ATR)
Bullet 333Phyllis Schlafly, President and Founder, Eagle Forum
Bullet 333Chuck Stetson, Co-founder and Managing Director, PEI Funds
Bullet 333Tony Strickland, Taxpayer Advocate
Bullet 333Lorianne Updike, President & Executive Director, The Constitutional Sources Project
Bullet 333John Weiser, Board Member, Westminster Theological Seminary , In Medias Res

Liberal Activists to Protest Job-Creating Pipeline Project

CNS News

Actor Danny Glover, a perennial protester, plans to march with other liberal activists outside the White House in the summer heat to protest a proposed oil pipeline that would bring crude oil from Canada to U.S. refineries in Texas, creating tens of thousands of jobs in the process.

TransCanada says its proposed Keystone XL pipeline will give the U.S. a consistent and reliable supply of oil -- supplying roughly half the amount of oil the U.S. currently imports from the Middle East and Venezuela -- once it's completed.

Because the proposed pipeline would cross the international border near Morgan, Montana, a presidential permit issued by the U.S. State Department is required for the project to proceed. Glover and his fellow celebrity-environmentalist protesters want the Obama administration to deny TransCanada a permit.

CBO sees government benefits swamping U.S. economy

Reuters

The United States will find little relief from its bleak long-term fiscal outlook so long as growing federal healthcare and retirement programs gobble up more and more of the country's resources, said a new economic report issued on Wednesday.

The findings by the non-partisan Congressional Budget Office came as the Obama administration and Congress were struggling to find ways to make ends meet amid $1.5 trillion annual budget deficits and a national debt that, at $14.3 trillion, is seen as posing a danger to the nation.

"The aging of the population and the rising cost of health care would cause spending on the major mandatory healthcare programs and Social Security to grow from roughly 10 percent of GDP today to about 15 percent of GDP 25 years from now," CBO said in an annual report.

McKinsey stands by employer health insurance survey

Reuters

Consultant McKinsey & Co on Monday defended the methodology behind its survey gauging employers' views on providing health insurance to workers, a report that drew criticism from U.S. health reform supporters.

The survey found 30 percent of respondents whose companies offered health insurance said they would "definitely" or "probably" drop coverage in the years following 2014, when the Affordable Care Act takes effect.

Senate Finance Committee Chairman Max Baucus, a Democrat, last week sent a letter to McKinsey calling on the company to release the methodology behind the survey, published earlier this month.

McKinsey, in a posting on its website, said the opinion survey of U.S. private sector employers was designed to measure their attitudes about healthcare reform and was not intended to be a predictive economic analysis of the impact of the Affordable Care Act.

"We stand by the integrity and methodology of the survey," McKinsey said.

Baucus said the survey results differed sharply from other research on the impact of health reform on employer-sponsored health insurance.

States look to Internet taxes to close budget gaps

Associated Press

State governments across the country are laying off teachers, closing public libraries and parks, and reducing health care services, but there is one place they could get $23 billion a year if they could only agree how to do it: Internet retailers such as Amazon.com.

That's enough to pay for the salaries of more than 46,000 teachers, according to the U.S. Bureau of Labor Statistics. In California, the amount of uncollected taxes from Amazon sales alone is roughly the same amount cut from child welfare services in the current state budget.

But collecting those taxes from major online retailers is difficult.

Internet retailers are required to collect sales tax only when they sell to customers living in a state where they have a physical presence, such as a store or office. When consumers order from out-of-state retailers, they are required under state law to pay the tax. But it's difficult to enforce and rarely happens.

Senate Backs Repeal of Ethanol Tax Credit

Wall Street Journal

The Senate voted Thursday to repeal a $6 billion tax credit for ethanol producers, a move that could signal the end of some federal subsidies as part of an eventual budget and debt-ceiling compromise.

Most Democrats and a number of Republicans supported an end to the subsidy, in a 73-27 vote. The subsidy gives refiners a 45-cent-a-gallon tax credit for blending ethanol into gasoline and has been a factor behind higher corn prices in recent years. Sen. Chuck Grassley (R., Iowa), a longtime supporter of the credit, objected to the measure that would end the subsidy.

The U.S. ethanol industry is protected by a tariff of 54 cents a gallon on imported ethanol and that, too, would end under the Senate measure.

Senate to Vote on Repealing Ethanol Tax Credits

Associated Press

With lawmakers desperately working to shave federal budget deficits, the Senate is debating a measure to eliminate ethanol tax credits that pay the oil industry $5 billion a year. The biggest defenders of the subsidies, however, include farm belt conservatives leading the charge for less government.

Sen. Tom Coburn, R-Okla., is forcing a vote on a measure Tuesday that would repeal the credits. Coburn says they are wasteful subsidies for an industry that no longer needs them.

"The days of placing spending programs in the tax code and giving them holy status are over," Coburn said. "Ethanol is bad economic policy, bad energy policy and bad environmental policy."

Coburn's measure is supported by conservative groups such as the Club for Growth and environmental groups such as the Sierra Club.

Sarkozy warns of soaring commodity prices

Breitbart

French President Nicolas Sarkozy called Tuesday for tighter controls on the speculators he blames for soaring food and energy prices threatening global growth.

Saying the world had "worked extremely hard" to revive growth in the aftermath of the global financial crisis, Sarkozy said "one of the main threats to growth is the rising cost of commodities."

The president has said he plans to use France's chairmanship of the Group of 20 top economies to push for regulations to curb speculative trade in the commodities markets but this has met strong resistance from suppliers such as Brazil and Argentina who have benefited from high prices.

Sarkozy, speaking at the invitation of European Commission president Jose-Manuel Barroso, said "the G20 nations are the first concerned by this issue and it is up to them to install conditions for sustainable growth."

1.9 Million Fewer Americans Have Jobs Today Than When Obama Signed Stimulus

CNS News

Twenty-eight months after Congress passed President Obama’s signature economic stimulus law, and nearly one year after he declared the summer of 2010 to be “Recovery Summer,” 1.9 million fewer people are employed.

In February 2009, the Bureau of Labor Statistics (BLS) reported that 141.7 million people were employed. By the end of May 2011 – the last month for which data are available – that number had fallen to 139.8 million, a difference of 1.9 million.

While the number of people with jobs has increased slightly from its low point during the recession – 137.9 million in December 2009 – those 1.9 million jobs have been lost despite $800 billion in stimulus spending.

This does not mean that the economy is not creating jobs, but rather that it is not creating jobs fast enough to keep up with a combination of layoffs and people entering the job market for the first time.

Obama Seeks to Win Back Wall St. Cash

A few weeks before announcing his re-election campaign, President Obama convened two dozen Wall Street executives, many of them longtime donors, in the White House’s Blue Room.

The guests were asked for their thoughts on how to speed the economic recovery, then the president opened the floor for over an hour on hot issues like hedge fund regulation and the deficit.

Mr. Obama, who enraged many financial industry executives a year and a half ago by labeling them “fat cats” and criticizing their bonuses, followed up the meeting with phone calls to those who could not attend.

The event, organized by the Democratic National Committee, kicked off an aggressive push by Mr. Obama to win back the allegiance of one of his most vital sources of campaign cash — in part by trying to convince Wall Street that his policies, far from undercutting the investor class, have helped bring banks and financial markets back to health.

Rich Libs Want Higher Taxes On Millionaires, But Won't Donate Own $$$ to Pay U.S. Debt

CNS News

A group of self- described liberal millionaires seeking to raise taxes on the top 1 percent of America’s population, refused -- when questioned by CNSNews.com -- to consider making donations themselves to a Treasury Department Web site that allows the public to make contributions to help pay down the public debt.

The “Patriotic Millionaires" group held a conference call on Monday in advance of the10th anniversary of President George W. Bush's tax cuts to encourage President Barack Obama and Congress to raise taxes for Americans who make $1 million or more annually.

CNSNews.com asked the liberal millionaires this question: “The Treasury Department has a Web site -- pay.gov -- where anyone who wants to can make a contribution at any time to pay down the federal debt. Are you willing to make a contribution to pay down the debt and, if so, how much would it be?”

Dennis Mehiel, the principal shareholder and chairman of the board of U.S. Corrugated, called the notion that he and his fellow millionaires would consider donating some of their millions to the Treasury Department to help eliminate the deficit “preposterous on its face.”

True Cost of Fannie, Freddie Bailouts: $317 Billion, CBO Says

CNS News

The Congressional Budget Office (CBO) says the real cost of the federal government guaranteeing the business of failed mortgage giants Fannie Mae and Freddie Mac is $317 billion -- not the $130 billion normally claimed by the Obama administration.

In a report delivered to the House Budget Committee on June 2, the CBO said a “fair value” accounting of guaranteeing the two defunct mortgage companies – known as Government Sponsored Enterprises (GSEs) – was more than twice as high as the Office of Management and Budget had accounted for.

“Specifically, CBO treats the mortgages guaranteed each year by the two GSEs as new guarantee obligations of the federal government,” the CBO report said. “For those guarantees, CBO’s projections of budget outlays equal the estimated federal subsidies inherent in the commitments at the time they are made.”

“In contrast, the Administration’s Office of Management and Budget continues to treat Fannie Mae and Freddie Mac as nongovernmental entities for budgetary purposes, and thus outside the budget,” the report stated. “It records as outlays the amount of the net cash payments provided by the Treasury to the GSEs.”

U.S. Offers Foreign Aid to Countries Holding Billions in Treasury Securities

Reuters

The United States is providing hundreds of millions of dollars of foreign aid to countries that it borrows billions from, according to a report by Congress's research arm.

The Congressional Research Service released a report last month, a copy of which Fox News exclusively obtained, showing that in fiscal year 2010, the latest year that data was available, the U.S. handed out a total of $1.4 billion to 16 foreign countries that held at least $10 billion in Treasury securities, including China ($27.2 million), Brazil ($25 million), Russia ($71.5 million), India ($126.6 million), Mexico ($316.7 million) and Egypt ($255.7 million).

China is the largest holder of U.S. Treasury bonds with $1.1 trillion as of March, according to the Treasury Department. Brazil held $193.5 billion, Russia had $127.8 billion, India owned $39.8 billion, Mexico held $28.1 billion and Egypt had $15.3 billion.

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