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According to the latest Reuters/Ipsos Poll.

Showing an intensity of interest among Americans who often ignore the intricacies of policy in Washington, 83 percent of those polled said they were either very or somewhat concerned about the potential for a U.S. debt default on August 2.

The poll found that 56 percent of Americans want to see a combination of government spending cuts and tax increases included in a deal to bring down the U.S. budget deficit and permit a vote to raise the country’s $14.3 trillion debt ceiling.

This is the approach favored by Obama and his fellow Democrats to begin to put America’s fiscal house in order.

Republicans oppose tax increases and instead want to cut back deeply on spending, saying the federal budget has gotten out of control.

“It does seem to be that the popular narrative is falling on the side of the president on this one,” said Ipsos pollster Julia Clark.

In the poll, 19 percent said the best approach is only to cut existing programs, and 12 percent said only raising taxes would be the favored solution.

Obama’s Democrats and their Republican rivals have so far failed to forge agreement and are pursuing competing debt plans to avert a potentially disastrous default.

But, that is not saying that American voters know what is best for the economy or the government, especially with the President telling them he will only tax the rich.

So, for the debt-ceiling impasse, who do the voters blame?

The Reuters/Ipsos poll found that 31 percent of respondents held Republican lawmakers responsible for the debt impasse, 21 percent blamed Obama and 9 percent blamed Democratic lawmakers.

Along those lines, 29 percent said Republican lawmakers should give the most ground in the negotiations, a quarter said Obama should and a fifth said Democrats should.

The debt debate has potential consequences for the 2012 election year when Obama is seeking a second term as president.

People who identified themselves as political independents, who Obama needs to win re-election, tended to side with the Republicans. The poll found that 29 percent of independents said Obama should give the most ground in the negotiations, while 13 percent said Republicans should.

This is the polling the Democrats will argue places the voters on their side of the debt-limit argument. But, I do not think this will move the narrative for the GOP. The GOP will NEVER accept tax increases, but they may swallow some tax reform.

In fact, in a breaking piece of news, the GOP House Leadership has just announced that they will have to re-write the Boehner proposal in order to obtain 218 votes for passage. Senator Harry Reid has already stated that in the Senate the Boehner proposal is DOA.

So, if the GOP already knows that if they are getting the blame for this financial impasse in an economic climate that Obama now owns, they may be MORE inclined to compromise and just call it a day.

These are my links for July 26th from 13:45 to 14:54:

• Is US Debt Downgrade Inevitable? – Democrats and Republicans will present their own version of budget cuts later in the day on Monday, but is the estimated $2.7 trillion in cuts being proposed enough to avoid a credit rating downgrade?

  Credit watchdogs at Standard & Poor’s have warned that unless $4 trillion in cuts are made, with long term sustainable fiscal policies to balance the budget, the US will lose its coveted AAA status within 90 days. Moody’s said the same thing this month, only gave the US 12 to 18 months to get its financial house in order before getting dropped from the triple-A list.

  US government debt is considered the safest in the world. A lose to triple A status would cause every money market and Treasury bond fund to change its covenants that, until now, require holding AAA rated debt only.

  “You’ll want to buy stock in a printing press company because if the US loses its triple A status, funds will be printing millions of notices to shareholders explaining the sudden and extraordinary change in its investment profile away from triple A debt and allowing for double A in their portfolios,” says Ron Weiner, president and CEO of RDM Financial Group in Westport, Conn, a $600 million asset manager.

  While the market is not pricing in a default on US debt obligations, it is definitely pricing in the likelihood of a downgrade.

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  Looks like it….

• Great news: Downgrade could come as soon as Friday – Barack Obama has spent the last several weeks warning that a failure to raise the debt ceiling by the “drop-dead date” of August 2nd would cause a ruinous downgrade of Treasury bonds and an economic disaster for the US.  However, the downgrade may come sooner than that, because the debt ceiling is actually a secondary condition to the ratings agencies.  The problem, as they see it, is not that America can’t pay its debts next month, but that America has grown its debt to such a degree that we can’t pay them in the long run without serious restructuring of the federal government — and this administration refuses to consider it:

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  Read it all

• Debt-Ceiling Chicken by Thomas Sowell – The big news, as far as the media are concerned, is the political game of debt-ceiling chicken that is being played by Democrats and Republicans in Washington. But, however much the media are focused on what is happening inside the Beltway, there is a whole country outside the Beltway — and the time is long overdue to start thinking about what is best for the rest of the country, not just for right now but for the long haul.

  However the current debt-ceiling crisis turns out, the current economic turmoil in financial markets around the world should cause some serious thoughts about the long run, and about the whole idea of a national-debt ceiling.

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  Read it all

• Leadership by Default – They used to say that Richard Nixon had a “secret plan” in the 1968 presidential campaign to end the Vietnam War. Pres. Barack Obama outdid Nixon with a secret plan to control the deficit.

  He kept telling us of all the virtues of his plan. It was balanced, responsible, courageous, and fair. It was just very, very secret.

  Obama favored a $4 trillion “grand bargain” that now looks dead. It allegedly contained $3 trillion in cuts and $1 trillion in new revenues over ten years. But no one could learn with any certainty what the specific new cuts were, or the specific new revenues. They were the great mystery at the heart of the debt-limit debate.
  How extraordinary is the spectacle of the president of a country beset with a debt crisis who claims to have a big, game-changing plan to alleviate it — that he keeps all to himself. He’d whisper it in the ear of House Speaker John Boehner behind closed doors in the White House, but the erstwhile champion of transparency didn’t dare make it public.

  Why was the president who rode into the White House on a wave of overexposure, who wrote two memoirs and is constantly on TV, so shy and retiring about this one matter? Few things would be more galvanizing in the nation’s budgetary politics than a liberal Democrat breaking ranks on entitlements. It would make possible changes heretofore unthinkable, and partly redeem Obama’s promise of post-partisan government.

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  Yeah, pretty ridiculous for the transparency President

Why not?

Leadership by default.

These are my links for July 26th from 11:33 to 11:35:

• New polls confirm Obama’s Democratic base crumbles – With all of the spotlights on the high-stakes debt maneuverings by President Obama and Speaker John Boehner the last few days, few people noticed what Vermont's Sen. Bernie Sanders said:

  "I think it would be a good idea if President Obama faced some primary opposition."

  This is political treason 469 days before a presidential election. Yes, yes, this is just a crusty old New England independent for now, albeit one who caucuses loyally with Harry Reid's Democratic posse.

  But while most of the media focuses on Republican Boehner and the tea party pressures on him to raise the debt limit not one Liberty dime, Sanders' mumblings are a useful reminder that hidden in the shadows of this left-handed presidency are militant progressives like Sanders who don't want to cut one Liberty dime of non-Pentagon spending.

  Closely read the transcript of Obama's Monday statement on the debt talks stalemate. The full transcript is right here. And the full transcript of Boehner's response is right here.

  An Unbalanced Approach to a Balanced Approach

  Using political forensics, notice any clues, perhaps telltale code words that reveal to whom he was really addressing his Monday message? Clearly, it wasn't congressional Republicans — or Democrats, for that matter.

  The nation's top talker uttered 4,526 words in those remarks. He said "balanced approach" seven times, three times in a single paragraph.

  That's the giveaway. Obviously, David Plouffe and the incumbent's strategists have been polling phrases for use in this ongoing debt duel, which is more about 2012 now than 2011. "Balanced approach" is no sweet talk for old Bernie or tea sippers on the other side.

  Obama is running for the center already, aiming for the independents who played such a crucial role in his victorious coalition in 2008. They were the first to start abandoning the good ship Obama back in 2009 when all the ex-state senator could do was talk about healthcare, when jobs and the economy were the peoples' priority.

• House GOP revolts against Boehner plan – House Republicans do not have enough support to pass their debt-ceiling increase plan on their own, a top conservative said Tuesday as his party’s leaders tried to cobble together a coalition of Republicans and Democrats to put the bill over the top.

  “There are not 218 Republicans in support of this plan,” Rep. Jim Jordan, an Ohio Republican who heads the powerful conservative caucus in the House, told reporters Tuesday morning.

  That means Speaker John A. Boehner will have to rely on Democrats to pass the $1.2 trillion spending cuts plan — support Democrats’ top vote-counter said he’ll be hard-pressed to gain. Minority Whip Steny H. Hoyer said “very few” Democrats will vote for the Boehner plan, though he acknowledged there could be some.

  A vote in the House is expected Wednesday, and Republican leaders are trying to round up enough support to pass their version. They hope that if it can pass the House, that will pressure Senate Democrats to drop their alternative and accept the GOP’s plan.

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  Read it all.

  Going to be a tough vote tomorrow

According to the latest Basswood Research Poll.

A new poll conducted for the Club for Growth showed Sen. Dick Lugar (R-Ind.) and his primary challenger, state Treasurer Richard Mourdock, in a statistical dead heat.

Mourdock had a small advantage over Lugar, 34 percent to 32 percent, in the Basswood Research poll released Tuesday. But Mourdock’s 2-point lead is within the poll’s 4.4-point margin of error.

The conservative, anti-tax organization has not endorsed Mourdock, but the Club for Growth President Chris Chocola has frequently criticized Lugar’s record. Earlier this month, the club sponsored television advertisements blasting Lugar across Indiana.

“An incumbent who sits at 32 percent in his own party’s primary, and trails a much less known challenger, is in a world of trouble,” Chocola, a former Indiana Congressman, said in a statement. “Senator Lugar is a very decent man, but it’s clear from the poll that after 35 years, Hoosier Republicans are eager for a more conservative alternative.”

About one-third of those polled, 34 percent, said they were undecided about the GOP Senate primary field.

Basswood Research conducted the poll of 500 likely Republican primary voters July 23-24.

Richard Lugar is in trouble and although he has a ton of campaign cash, money will now flow to the Tea Party favorite and younger Mourdock.

Time for Lugar to retire and bow out gracefully.