Wednesday, May 8, 2013

Debt Ceiling jibber jabber - as total debt outstanding heads toward 17 trillion as delay is the name of the game - as far as addressing the debt debacle !

House Narrowly Passes "Avoid Default" Bill - 221-207; US CDS Ticks Up

Tyler Durden's picture

The Treasury market can rest assured that the Republican-'owned' House has done its very best to avoid a default on the debt securities of the US. The 'debt prioritization' bill narrowly passed the House 221-207 amd now moves on to the Senate where it stands a snowball's chance in hell of passing. Let the Grand-Standing begin... Meanwhile, US 5Y CDS rose modestly to around 35bps (from 31bps) - but remains near post-crisis lows.

Charts: Bloomberg

      TABLE III-C  Debt Subject to Limit
                                                                 Opening balance
                                          Closing    ______________________________________
         Balance Transactions             balance                     This         This
                                           today         Today        month       fiscal
 Debt Held by the Public              $   11,917,158 $ 11,916,774 $ 11,943,148 $  11,269,586
 Intragovernmental Holdings                4,878,395    4,871,653    4,885,697     4,796,656
 Total Public Debt
    Outstanding                           16,795,552   16,788,427   16,828,845    16,066,241
 Less: Debt Not
   Subject to Limit:
    Other Debt                                   486          486          486           486
    Unamortized Discount                      29,931       29,943       29,975        31,130
    Federal Financing Bank                     7,112        7,112        7,112         7,112
    Hope Bonds                                   494          494          494           493
 Plus: Other Debt Subject to Limit
   Guaranteed Debt of
    Government Agencies                            0            0            0             0
 Total Public Debt
    Subject to Limit                  $   16,757,530 $ 16,750,393 $ 16,790,780 $  16,027,021
 Statutory Debt Limit                        *             *            *      $  16,394,000
 * Act of February 4, 2013 temporarily suspended the debt limit  through May 18, 2013.

  Unamortized Discount represents the discount adjustment on  Treasury bills and zero-coupon
 bonds (amortization is calculated daily).

House GOP sees few options on debt

John Boehner is pictured. | AP Photo
Boehner’s team is looking to squeeze out anything that can pass. | AP Photo
House Republican leaders don’t know how they’re going to address the debt limit later this summer, but early plans show that Washington is casually strolling into a five-month political and legislative minefield.
A clean debt-limit increase without any strings attached — essentially what President Barack Obama and Senate Majority Leader Harry Reid are asking for — doesn’t stand a chance of passing the conservative chamber.

Text Size

  • -
  • +
  • reset
Speaker John Boehner’s leadership team is looking to squeeze out of an ideologically diverse House Republican Conference anything that can pass. Ahead of a members-only, two-hour meeting next Tuesday, the top idea bouncing around GOP leadership is casually being referred to as a catch-all, kitchen sink plan.
The plan is simple: craft a debt ceiling hike onto a bill loaded with tons of conservative goodies to put lots of options on the table to garner 218 GOP votes.
Options being floated internally include language approving the Keystone XL pipeline, slashing regulations with the Regulations from the Executive in Need of Scrutiny Act and additional spending cuts — perhaps even a framework for tax reform.
To make it even more attractive to voters back home, they’d frame it as a so-called job-creation bill. Basically, anything they could say creates jobs has a chance of landing in this legislative package.
There’s also real effort from the right — supported by leadership — to forestall Obama’s health care law in the fight to lift the debt ceiling. Top lawmakers at the Republican Study Committee have met with the Congressional Budget Office to inquire how much the government would save if they delayed the implementation of the health care exchanges and expansion of Medicaid.
“When you have Max Baucus saying it’s a train wreck; when you have every business guy I talk to saying, ‘This thing is a problem and a mess,’ it seems to me there’s elements of that to focus on,” said Rep. Jim Jordan, a conservative from Ohio.
It’s the red-meat kind of stuff Republicans love. Forget that most of it faces stiff headwinds in the Senate, but conversations throughout the Republican Conference show how difficult it will be for GOP leadership to coalesce around a plan.
The most popular opening gamut — cobbling a bunch of conservative ideas together — is splitting the GOP leadership.
“I’m not sold on that,” said Oklahoma Rep. James Lankford, a member of leadership who chairs the party’s policy arm. “Because I think it can come across as sounding gimmicky at some point, but in reality, we have to have economic activity that actually drives it.
“So it’s gotta be proved that if we do this debt ceiling increase, we’re actually going to get the economic activity out of it,” he added. “So gathering enough things together to offset a debt ceiling increase — that may work for a short term to buy a couple months. But not a long term.”
Leadership won’t be able to escape the spotlight: The debt ceiling is almost certainly going to be hit this fall, which could create a double threat of government shutdown and a debt default. The government runs out of money on Sept. 30. Republican aides say that might help them enact entitlement changes and perhaps even replace some sequester cuts.
Boehner, Majority Leader Eric Cantor (R-Va.) and Majority Whip Kevin McCarthy (R-Calif.) are considering setting up the first debt ceiling vote before the August recess, but even that carries risk. Leadership insiders say rank-and-file Republicans could go home to their deep-red districts only to suffer the wrath of constituents who sent them to Washington to stop racking up debt.
If they go home empty-handed, they will return in September with somewhere between four and eight weeks before the nation defaults on its debt.

Text Size

  • -
  • +
  • reset
Either way, a GOP looking to rebrand itself as a serious governing alternative risks looking like a party stuck in the past by pushing for legislation that the Senate and White House have rejected time and time again.
These are questions that define this Republican majority: What exactly should they stand for? Take this week as a prime example: House Republicans passed a bill to give employers the ability to pay overtime or give comp time to employees — a bid to appeal to families. And then, Cantor announced that Republicans would for the nearly 40th time vote to repeal Obama’s health care law.
The debt ceiling presents unique challenges for Republican leadership, and they often seek the counsel of what some refer to as the Fab Five — conservative leaders Jordan, Rep. Tom Price of Georgia, RSC Chairman Steve Scalise of Louisiana and Reps. Jeb Hensarling of Texas and Paul Ryan of Wisconsin. In January, their support of leadership’s plan to reshuffle the year’s fiscal battles smoothed what otherwise would’ve been a rough few months for Boehner’s leadership team.
They’ve been working behind the scenes to take the pulse of the conservatives in the RSC. Scalise has formally canvassed the group in search of just what might pass muster this fall.
“The five of us are going to come to an agreement to solve the spending problem and get us on a path to balance, and hopefully, we can work with our conference to bring an idea to them that they’ll embrace,” Scalise said in an interview.
Jordan, a former RSC chair, has his ideas, which foreshadow the fight ahead. Jordan wants elements of the Republican budget — which has passed several times since 2011 — to be incorporated into the debt ceiling legislation.
“The parameters are already set, and [it was] already established back in January,” Jordan told POLITICO. “The parameters are: You have to put the country back into balance so that’s implementing policies, doing things that are consistent — you’re not going to get all the Ryan plan — but it’s implementing policies that are consistent with that budget. It’s gotta put us on the path to balance.”
The approach of slapping a number of conservative ideas together represents one pole — the other approach is embodied in what Ways and Means Chairman Dave Camp (R-Mich.) is pushing toward. Camp, with the tacit support of Ryan, has been advocating tying tax reform to the debt ceiling — an approach that has drawn skeptics and supporters in GOP leadership.
Conservatives are skeptical of that as well.
“If we can get true tax reform actually part of the package, that could be huge,” Rep. Scott Garrett (R-N.J.) said. “The devil is in the details so that you get all the details in the package and achieve it, rather than triggers that may or may not be hit.”

10 people to watch in debt showdown

By Molly K. Hooper 05/07/13 05:00 AM ET
The 2013 debt-limit fight has begun. 

Powerful policymakers on both sides of the aisle are jockeying for position in what will be a defining moment for the 113th Congress.

Economic experts have recently said the debt-limit hike could wait until the fall, though the Treasury Department has not committed to a specific date. 

But if a bill doesn’t need to be passed until after the August recess, that would benefit the GOP, which is trying to tie tax reform to the debt limit.

The following is a list of 10 players to watch on the debt-limit battle. 

• President Obama. Four months into his second term, the president has been fielding questions about his diminishing political capital. Obama suffered a major setback on gun control and is now trying to push Congress to pass immigration reform. The president has refused to negotiate on the debt ceiling like he did in the summer of 2011. While his recent charm offensive on Capitol Hill is aimed at striking a large fiscal deal, it hasn’t yielded any tangible results. Furthermore, his relationships with GOP leaders in Congress have hit an all-time low.

Speaker John Boehner (R-Ohio). The Speaker has pledged not to engage in one-on-one negotiations with Obama, though it remains to be seen how a deal can be reached without the two leaders being on the same page. GOP lawmakers point out Boehner would rather watch the Senate work out a deal that can pass in the upper chamber instead of sticking his neck out on behalf of an unruly conference; Boehner confidants say the Speaker felt burned by Obama in the summer of 2011. The feeling is mutual: Obama that summer said that Boehner left him at the altar — twice.

• Vice President Biden. Biden has served as a key asset to Obama, especially when dealing with Congress. He has strong relationships with Republican and Democratic lawmakers and a history of dealmaking in the Senate. He helped cut a delicate deal on the “fiscal cliff” late last year.

• Senate Minority Leader Mitch McConnell (R-Ky.). The top-ranking Senate Republican, whose top political goal in 2012 was to deny Obama a second term, is up for reelection in the Blue Grass State next year. McConnell worked with Biden on the fiscal-cliff agreement, though it remains to be seen if he will put his fingerprints on the debt-ceiling legislation. 

• Senate Majority Leader Harry Reid (D-Nev.). Reid complained to senior White House officials about not being in the loop during the 2011 debt fight. That is highly unlikely to happen again — Reid figures to be a major player this time around, though he will also have to protect his red-state Democrats who are up for reelection in 2014. The Nevada Democrat also has to watch his left flank. Right after the election, Reid said, “We are not going to mess with Social Security.” Months later, Obama included a Social Security fix in his new budget as an olive branch to Republicans.

 • House Minority Leader Nancy Pelosi (D-Calif.). The liberal Democratic House leader will be certain to represent the interests of the left-wing elements of her minority caucus in the House, who insist on little to no changes to entitlement programs. Pelosi has clout in the debt discussions because controversial fiscal bills usually require support from Republicans and Democrats to pass the House.

• House Ways and Means Committee Chairman Dave Camp (R-Mich.). The head of the powerful tax-writing committee has made a determined effort of moving full-blown tax reform through the House this year. Camp has held numerous bipartisan discussion sessions with Ways and Means Committee members and has started briefing the GOP rank and file on possible reform plans. On a party-line vote last month, the panel passed a bill that would prioritize which debts to pay off. But, Camp would like to pass a much larger tax reform overhaul that could serve as a vehicle for a “grand bargain” to tackle the debt limit, deficit and debt reduction this year. The chances of that, however, are small.

• Senate Finance Committee Chairman Max Baucus (D-Mont.). The six-term Democratic Montana senator opted against running for reelection in 2014, which might help the chances of tax reform. Baucus has formed a close bond with Camp, who wants to move a “revenue neutral” measure. Democratic leaders in the House and Senate want to reduce the deficit by closing tax loopholes. Baucus has recently clashed with Reid on an online sales tax bill, and it’s unclear how much power the retiring senator will have when debt limit talks heat up.

• House Majority Leader Eric Cantor (R-Va.). The No. 2-ranked House GOP lawmaker clashed with Boehner during the 2011 talks and split with the Speaker on the fiscal-cliff bill. Unity in the House GOP Conference has increased in recent months, though it remains fragile. Boehner and Cantor both strongly oppose a “clean” debt-ceiling increase favored by the president. Biden, meanwhile, enjoys working with Cantor, and that relationship could be key later this year.

• Treasury Secretary Jack Lew. Boehner didn’t like working with Lew in the 2011 talks, preferring to negotiate with then-Treasury Secretary Timothy Geithner. According to Bob Woodward’s book The Price of Politics, Boehner found Lew to be “disrespectful and dismissive.” Lew has struck many bipartisan deals in both the Clinton and Obama administrations, but forging a debt-limit pact is his biggest challenge this year.

No comments:

Post a Comment