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Boehner Caves – Offers Six Week Debt Increase

From the Washington Post:

House GOP pushes plan to raise debt ceiling; Jack Lew warns against default

By Zachary A. Goldfarb, Paul Kane and Lori Montgomery | October 10, 2013

House Republican leaders are pushing a six-week increase in the debt limit, without any conservative strings attached, to calm jittery financial markets, according to senior GOP advisers.

The plan was presented to the House GOP caucus Thursday morning after Treasury Secretary Jack Lew warned a Senate panel that he would be unable to guarantee payments to any group — whether Social Security recipients or U.S. bondholders — unless Congress raises the federal debt ceiling.

If the GOP plan goes over well with rank-and-file Republicans, Speaker John A. Boehner (R-Ohio) could put the legislation on the floor for a vote late Thursday, aides said.

Financial markets soared on the first sign of optimistic news out of Washington in almost a month, with the Dow Jones industrial average up 169 points in the first 15 minutes of trading. The emerging plan would not deal with the now 10-day-old shutdown of the federal government, an issue that would move onto a separate track of talks.

The plan would meet President Obama’s demand for an increase in Treasury’s borrowing authority without any legislative riders, meaning that Democrats would likely support the plan and it could be signed into law. But it would set the stage for tough negotiations, possibly lasting until Thanksgiving, over bigger fiscal matters, since the tentative plan calls for only a six-week increase of the debt limit.

Advisers cautioned that Boehner’s often unruly caucus, which has repeatedly rejected leadership initiatives in the past, needs to sign off on the plan before it can advance.

Reacting to the GOP proposal, a White House official said: “It is better for economic certainty for Congress to take the threat of default off the table for as long as possible, which is why we support the Senate Democrats’ efforts to raise the debt limit for a year with no extraneous political strings attached.”

Obama also wants House Republicans to allow a vote on the “clean” government funding bill that has been passed by the Senate, the official said. “Once Republicans in Congress act to remove the threat of default and end this harmful government shutdown, the president will be willing to negotiate on a broader budget agreement,” the official added. “While we are willing to look at any proposal Congress puts forward to end these manufactured crises, we will not allow a faction of the Republicans in the House to hold the economy hostage to its extraneous and extreme political demands. Congress needs to pass a clean debt limit increase and a funding bill to reopen the government.”

Financial experts much prefer a longer-term extension of the debt ceiling, but even a brief extension would ease some of the turmoil that has been brewing on Wall Street. By the time markets closed Monday afternoon, the Dow had dropped 900 points in 14 trading days, losing almost 6 percent of its value.

Just three weeks ago, Boehner’s leadership team presented a plan to lift the debt ceiling accompanied by a one-year delay of Obama’s health-care law and a litany of other conservative domestic policy demands.

With Washington in gridlock and a key deadline in the debt-limit debate just one week away, Lew told the Senate Finance Committee Thursday morning that he would do all he can to minimize the pain of breaching the $16.7 trillion debt limit. But Lew also told the senators that in an unprecedented situation in which he would be relying entirely on the erratic flow of incoming revenue, the economy would suffer and there would not even be certainty that the government could make all interest and principal payments.

“No credible economist or business leader thinks that defaulting is good for job creation or economic growth,” Lew said. “If Congress fails to meet its responsibility, it could be deeply damaging to the financial markets, the ongoing economic recovery, and the jobs and savings of millions of Americans.”

Rep. Jim Jordan (R-Ohio), a key conservative with ties to leadership and more junior tea party-backed colleagues, said Thursday morning that he and his colleagues “potentially” could support the new GOP debt-ceiling plan.

“We think there needs to be some movement in dealing with the overall problem,” he said. “It’d be nice to get some dollar-to-dollar cuts there.”
Asked whether he could support a short-term increase without related cuts, Jordan said he expected that question would be the primary topic of conversation among House Republicans on Thursday.

Amid growing anxiety about a debt default, Republicans in the House and the Senate floated ideas Wednesday for raising the debt limit — if only for a short time — in hopes of forcing Obama to the negotiating table.

One of the most significant ideas was brewing in the House, where Budget Committee Chairman Paul Ryan (R-Wis.) briefed conservatives on a plan to raise the debt limit for six weeks, which would give party leaders time to negotiate a broad agreement to overhaul the tax code and trim federal health-care and retirement spending.

The plan, which Ryan sketched in a Wall Street Journal opinion piece Wednesday, was short on details. And it called for spending cuts of roughly $200 billion to cover the cost of raising the debt limit even in the near term — although senior GOP advisers said late Wednesday that they were also considering an increase with no strings attached…

This is the background on Boehner’s offer this morning. Of course, six weeks from now, means we get to have this fight right before Christmas. And we can’t put people out of work at Christmas.

Still, it’s important to note that this is separate and apart from the government shutdown debate.

This article was posted by Steve Gilbert on Thursday, October 10th, 2013. Comments are currently closed.

5 Responses to “Boehner Caves – Offers Six Week Debt Increase”

  1. Boehner = Neville Chamberlin, minus the spone

  2. Rusty Shackleford

    “House republicans are….”

    WHO?

    NAME THEM—PLEASE!

  3. mr_bill

    I wrote the other day that I’m not opposed to the idea of a short-term increase. What I don’t support is that there are no conditions attached to this. Without changing the parameters of the conversation, in six weeks we’re going to be right back where we started. An increase in the borrowing limit MUST be accompanied by mandated spending cuts. The House needs to do its job and start making meaningful cuts in federal spending. The Senate is going to have to get over itself and realize this is the only way to save what’s left of the country. nerobama needs to shut up and sit in the back of the bus. The only earthly way we’re ever going to see a balanced budget is if the government can’t borrow another dime, so this increase has to be the last one and Boehner et al. need to make that clear and they need to stick to it, no matter what names the media calls them.

  4. Astravogel

    Thomas Sowell commented that, “If the continued existence of mathematics depended on the ability of the Republicans to defend the proposition that two plus two equals four, that would probably mean the end of mathematics and of all the things that require mathematics.”

  5. I keep hearing dumbocrats say that republicans are threatening default on our debt. I keep hearing dumbocrats say that republicans say that default is no big deal. But they never give any names. Who is threatening default? Who says default is no big deal? I’ll give you a hint, he’s made of straw.

    There are laws in place that force government to service the debt before any other concern. If we go into default it will be because Obama has made a conscious choice NOT to pay our debt, or the interest on our debt. It would take a conscious choice from our president, without any input from ANY republican, to “not pay our bills”. A conscious choice to break “the law of the land” (which isn’t outside the realm or history of our president). The fact that dimocrats can get on television and say that republicans are threatening default without being pressed for details… a single name… A FREAKIN CLUE… just shows how in the tank our media is for this president. ASK A FREAKIN QUESTION FOR Christ’s sake.


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