Tuesday, October 15, 2013

Boehner, Cruz still appear able to "veto" a deal and hurl the nation closer to default; Treasury nervous about Thursday's rollover

Everyone has heard that the Senate is close to a deal, and that Harry Reid (D-NV) reports “tremendous progress”, as in the Washington Post story by Lori  Montgomery and Rosalind S. Heldeman, which gives the details, link.  It sounds like it kicks the can down the road, a phrase Obama used early in his first term a lot.
The biggest immediate dangers appear to be (1) another Ted Cruz filibuster, which could delay a vote until at least early Thursday (while the Treasury has to do a rollover, on its last day of “accounting gimmicks”) and (2) John Boehner doesn’t allow a vote.  It would be a good question as to whether a discharge petition would be possible, if necessary. 

I am still confused about the political difficulty in bringing a vote.  There are 90 or fewer hardliners in the Tea Party or sympathetic to it.  That leaves over 110 Republicans who are more moderate who would not want to take even the slightest chance of default on the debt now.  Why isn’t this a (Hastert Rule) “majority of the majority” now?  

Update:  The latest news as of 10 AM is that the House is close to a bill that will reopen government and raise the debt ceiling temporarily.  Here is the kiddish "Yes, but".  It would prohibit extraordinary measures by Treasury.  That's a poison pill.  I'm not sure they can be stopped.  That contradicts the idea of prioritization, which "default deniers" in the GOP have tried to use to play both sides of the arguments. 

A White House spokeswoman said that the president would reject the House bill because the add-ons are still a kind of ransom.  But the provision requiring Congress to pay individual rates for its own health insurance sounds reasonable enough to me. Maybe break into multiple bills?  

Update 2:  I can't keep up with all these versions of the House bills and the poison pills.  We can do without Nancy Pelosi's saying "The House vote will be a vote for default."  Please!

Fitch has placed the U.S. on negative warning. Reason: "political brinkmanship"  The link is here.  Note that Fitch views an internal delay (as with paying the Social Security Trust Fund" as a true default. That is in contrast to what some of the GOP have claimed, and even some law professors.  

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