Courtesy of Mish.
A friend of mine just emailed a story regarding a Republican budget cave-in with a message “you nailed it“. To be honest, I didn’t. Let’s review my precise call.
Politics of the Debate
- Obama will chastise Congress with talk of financial Armageddon if Congress does not raise the debt ceiling.
- Congress will pretend to hold the president hostage
- The secretary of the Treasury will get into the act with its own version of the default debate
- Perhaps a few payments on non-critical budget items will be temporarily skipped
- Wall Street will feign panic
- Constituents will pressure Congress to approve a new debt ceiling
- Congress will raise the ceiling with another useless warning about next time
House Republicans Wave White Flag Without a Battle
Like clockwork, steps 1-3 fell in order. However, Republicans bypassed steps 4-6 and skipped straight to step 7 without a fight.
Bloomberg reports House Republicans Plan Three-Month Debt-Limit Increase.
House Republicans plan to vote Jan. 23 on a three-month extension of U.S. borrowing authority in an effort to force the Democratic-led Senate to adopt a budget plan.
“We are going to pursue strategies that will obligate the Senate to finally join the House in confronting the government’s spending problem,” Speaker John Boehner of Ohio said in a statement today at the end of the party’s private policy retreat at a resort near Williamsburg, Virginia.
A leadership aide said Republicans are dropping their insistence that a short-term extension be accompanied by a dollar-for-dollar spending cut.
A leadership aide said Republicans are dropping their insistence that a short-term extension be accompanied by a dollar-for-dollar spending cut.
Senate Republican leader Mitch McConnell of Kentucky said in a statement that the lack of a Senate-passed budget in the last several years was a “shameful record that needs to end this year.”
Political divisions in Congress pose limits to the ability of Republicans to achieve their long-term goals of deep cuts in spending, Budget Committee Chairman Paul Ryan of Wisconsin told reporters at the retreat yesterday.
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