Deal or No Deal (Updated)
Deciphering the shutdown and debt ceiling negotiations, or non-negotiations, requires a PhD in political maneuvering. So far, it looks like the Senate is crafting some kind of framework but the House doesn’t like it and neither does President Obama. At least, that’s the current situation in a nutshell..
Report from the New York Times:
Senate leaders neared the completion Monday night of a bipartisan deal to raise the debt ceiling and end the government shutdown while the rest of the world braced for the possibility of an American default that could set off a global financial disaster.
Negotiators talked into the evening as senators from both parties coalesced around a plan that would lift the debt limit through Feb. 7, pass a resolution to finance the government through Jan. 15 and conclude formal discussions on a long-term tax and spending plan no later than Dec. 13, according to one Senate aide briefed on the plan.
But while both Senator Mitch McConnell of Kentucky, the Republican leader, and Senator Harry Reid of Nevada, the Democratic leader, praised the progress that was made in the Senate, it was already clear that the most conservative members of the House were not going to go along quietly with a plan that does not accomplish their goal from the outset of this two-week-old crisis: dismantling the president’s health care law.
“We’ve got a name for it in the House: it’s called the Senate surrender caucus,” said Representative Tim Huelskamp, Republican of Kansas. “Anybody who would vote for that in the House as Republican would virtually guarantee a primary challenger.”
The threat of defaulting on the nation’s debt on October 17 is rather overblown as reported from The Hill:
A major credit rater expects the Treasury Department would avoid default if the $16.7 trillion debt limit were not raised.
In a document dated Oct. 7, Moody’s Investors Service said it believes that if the borrowing cap were not increased, the government would prioritize making interest and principal payments on its outstanding debt above other government bills, even though the Treasury Department has repeatedly called prioritization plans unworkable.
“We believe the government would continue to pay interest and principal on its debt, even in the event that the debt limit is not raised, leaving its creditworthiness intact,” the rater said.
There are conflicting stories flying around and it’s hard to believe anything coming out of Washington given that we’re in the middle of such a heated political battle.
The House is now pushing their own solution, via CNBC:
The House GOP will propose a bill to open the government and raise the debt ceiling in return for various concessions related to Obamacare.
The bill will ask for, among other things, a two year delay in a controversial medical device tax, and will require income verification for various aspects of Obamacare.
In return, the bill will fund the government through January 15, and raise the debt ceiling until February 7.
Dow Jones reported the House measure would also place limits on the Treasury’s ability to take the so-called extraordinary measures it has used to extend the debt ceiling in past.
The House could vote on its version of the plan as soon as Tuesday, the wire service reported.
Safe to say the ball is advancing down the field. Will it be turned over on downs or will both sides get at least a field goal out of this train-wreck?