Republicans Back Short-Term debt deal that causes a downgrade Obama should veto

 
WASHINGTON -- Republicans are willing to push President Obama to the wall with their budget-slashing bill to raise the debt ceiling because they are convinced he will capitulate on his veto threat and sign it, GOP lawmakers declared Thursday.

The Republican bill, which passed the House Tuesday and which Democrats warn will require even steeper cuts than the unpopular House budget plan that passed in the spring, is starting debate in the Senate.

And although the President has threatened to veto the measure and Senate Democrats say it is unacceptable, the group of Republicans from the House and Senate said it was Democrats' only choice to avoid defaulting on America's debt -- and that Obama would take it to stave off catastrophe.

"This is the only viable plan, right now, that will do that," said Sen. Tom Coburn (R-Okla.) "And I will bet you a porterhouse steak that, if it lands on his desk, he'll sign that puppy."

As for Obama's threat to reject the Tea Party-inspired "Cut, Cap and Balance" bill, Coburn suggested they were empty words.

The Republican aides said the revenue increase in the plan was larger than one Boehner and Obama had tentatively agreed to. An administration official said the plan changed the political dynamics in the push for a deal.

Standard & Poor’s warned there is a 50 percent chance it will lower the U.S. government’s AAA credit rating by one or more levels within three months. S&P said that, even if Congress raises the debt limit in time to avert a default, it might lower the U.S. sovereign rating to AA+ with a negative outlook if it isn’t accompanied by a “credible solution” on the debt level.

Such a ratings change would “modestly raise” the government’s borrowing costs, S&P said. If the U.S. defaults on some obligations after Aug. 2, even if it pays bondholders, S&P forecasts short-term interest rates would rise 0.50 percentage points and long-term interest rates by 1 percentage point.

Greater-than-expected tax receipts might give the U.S. Treasury an extra week — until Aug. 10 — before exhausting its borrowing authority, analysts with New York-based Barclays Capital said. The government has collected about $14 billion more in tax revenue since July 14 “than we were expecting,” the analysts wrote.

Read more on Newsmax.com: Republicans Back Short-Term Debt-Limit Deal, Risking Obama Veto
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