Debt limit overtaking shutdown

Gridlocked Congress shows no urgency in avoiding default
Associated Press
Oct 7, 2013

A market-rattling federal default loomed and the partial government shutdown lingered on Monday, but a gridlocked Congress betrayed little or no urgency toward resolving either of the nation's most challenging short-term economic disputes.

Stocks got a case of the jitters on Wall Street, and halfway around the world China stressed the importance for the global economy of raising the U.S. debt limit.

"Safeguarding the debt is of vital importance to the economy of the U.S. and the world," Vice Finance Minister Zhu Guangyao said, according to the official Xinhua News Agency. China holds $1.277 trillion in U.S. Treasury bonds, second only to Japan.

At home, the political rhetoric was unchanged — and generally uncompromising — while a new poll suggested Republicans are paying a heavier price than Democrats for the deadlock.

President Barack Obama said the House should vote immediately on ending the partial closure of the federal establishment. He accused House Speaker John Boehner of refusing to permit the necessary legislation to come to the floor because he "doesn't apparently want to see the ... shutdown end at the moment, unless he's able to extract concessions that don't have anything to do with the budget."

Boehner, in rebuttal, called on Obama to agree to negotiations on changes in the nation's health care overhaul and steps to curb deficits, the principal GOP demands for ending the shutdown and eliminating the threat of default.

"Really, Mr. President. It's time to have that conversation before our economy is put further at risk," the Ohio Republican said in remarks on the House floor.

Obama said he would talk with the Republicans on those topics or virtually any others. But the White House has said repeatedly the president will not negotiate until the government is fully re-opened and the debt limit has been raised to stave off the nation's first-ever default.

White House aide Jason Furman told reporters that if Boehner "needs to have some talking point for his caucus that's consistent with us not negotiating ... that's not adding a bunch of extraneous conditions, of course he's welcome to figure out whatever talking point he wants that helps him sell something."

The current standoff is the latest in a string of clashes over the past three years between Obama and a House Republican majority that has steered to the right with the rise of the tea party.

Most Democrats and many Republicans have assumed the GOP will pay a heavier price for a shutdown than the Democrats, since that was the case in 1996.

And a survey released by the Washington Post-ABC said disapproval of Republicans was measured at 70 percent, up from 63 percent a week earlier. Disapproval of Obama's role was statistically unchanged at 51 percent.

In the Senate, where majority Democrats forced approval of legislation before the shutdown aimed at preventing it, officials said Majority Leader Harry Reid was drafting a bill to raise the current $16.7 trillion debt ceiling before the Oct. 17 deadline when Treasury Secretary Jacob Lew has said the government will reach its borrowing limit.

The measure would allow the government to meet its borrowing needs through the 2014 elections, officials said, although few details were immediately available.

Assuming Democratic support, the bill could pass the Senate quickly if Republicans merely vote against it as they press for concessions from the White House. But passage could be delayed until Oct. 17 if the GOP decides to mount a filibuster.

Separately, a White House aide said Obama would be receptive to an interim, short-term measure to prevent default.

In the House, Republicans declined to say when they would put debt limit legislation on the floor for a vote.

Instead, the public agenda for the day consisted of legislation to reopen the Food and Drug Administration, the latest in a string of measures to soften the impact of the partial shutdown.

Earlier House-passed bills would end the shutdown at national parks, the National Guard and Reserves and the Women, Infants and Children nutrition program, and ease effects for the Washington, D.C., government, among other locations. Each of the measures cleared the House with some Democratic support.

Yet each is under a veto threat by the White House, and Reid opposes them in the Senate as far less than the full restoration of government services that most Democrats favor.

Still, the shutdown eased over the weekend, when about 350,000 civilian defense workers were recalled as the result of legislation Congress passed and Obama signed after the shutdown began.

That left an estimated 450,000 federal employees idle at agencies responsible for domestic programs, ranging from the Departments of Education to Energy, and including Labor, Health and Human Services, Interior, Transportation and more.

The shutdown was felt unevenly, however, because of bewilderingly complex rules and the ability of senior officials to declare some projects essential and therefore allowed to remain open.

Some routine food checks by the FDA were suspended, but the Department of Agriculture's meat inspections continued uninterrupted. Much of the nation's space agency was shuttered, although work continued on plans to launch a robotic probe to Mars, which has a once-every-two-years launch window.

Despite the order returning civilian Pentagon workers to their government jobs, defense contractor Lockheed Martin announced it would furlough about 2,400.

The Federal Emergency Management Agency, where Obama visited, served as a demonstration for the variable impact of the partial shutdown.

Officials said the agency had furloughed about 86 percent of its workers, then had recalled about 200 of them last week to prepare for the threat posed by Tropical Storm Karen in the Gulf Coast region.

With the threat passed, Obama said at least 100 of them have been re-furloughed.

"That's no way of doing business," he said.

Whatever the shutdown's inconveniences, it was easily rivaled by the warnings over a default, in which the United States would not be able to pay all its bills.

"A default would be unprecedented and has the potential to be catastrophic," a Treasury report said. "Credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world."

Private economists generally agree that a default on the U.S. debt would be extremely harmful, especially if the impasse was not resolved quickly.

Lew has said that while Treasury expects to have $30 billion of cash on hand on Oct. 17, that money would be quickly exhausted in paying incoming bills given that the government's payments can run up to $60 billion on a single day.

 

Comments

Darwin's choice

Better than a Nobel Peace prize winner....

2cents

"China holds $1.277 trillion in U.S. Treasury bonds, second only to Japan."

I love this, borrow from them to give to other countries. Live way beyond your means and just print and borrow more, I have to talk to my accountant and see how I can start doing this!

kURTje

E-z Shizz, that 1poster talked about Reagan & W. WAIT! Forgot about Nixon & his spying, i.e. Watergate.

The New World Czar

...but why does it take so much federally-employed manpower to set up and guard barricades in order to shut down national sites that have no barricades in the first place?

...but why is there an immigration rally permitted on the National Mall (with federally-employed security) and not visitation allowed at the World War II Memorial?

Sure, nothing selective on what defines a "non-essential government employee" on the part of the narcissist-in-charge, is there? Funny how the private sector just keeps humming along.

bobshumway92

New polls released today show the majority of Americans do NOT want the debt ceiling raised. Oblamer is looking more and more childish everyday!

gramafun

when are all of you going to stop arguing on here and realize that none of us needs this government???? Have ANY of us truly been affected????

the truth is we don't need any of these congressmen or representatives. They are they UNessential people of this government so lets get rid of THEM. They don't listen to us anyway once they get their.

just keep SOME of the people who work at the government. with computers we don't need all the people who work in those buildings. Get rid of the dead weight and get rocking.

Par it down and move on. Charge a flat tax to pay them each year. No sweat.

Frankly I am not sure we need the president and vice president for anything but figure heads at partys either. So lets just par down the fat and move on.

Back in the day we didn't have all this so move on.

This is nothing more than a big favor to get a new day out of it. Fire the congress and house and get over it.

meowmix

I'm just going to sit back and watch these teatards implode. Anyone with an ounce of sense realizes that the few nut cases who are running their mouths are the puppet masters of Boehner. Believe you me, he's losing sleep at night, that or getting totally wasted, trying to figure out a way he can save face in this fiasco...his bad for thinking the POTUS was going to be a push over. Heck, Obama's got nothing to lose anymore. Just giving them a big swift kick in the arse.

The New World Czar

Sounds like eight of your "progressives" had the first meltdown.

"Eight Democratic lawmakers were arrested Tuesday while advocating for comprehensive immigration reform in front of the U.S. Capitol.

Democratic Reps. John Lewis of Georgia, Luis Gutierrez of Illinois, Charlie Rangel of New York, Raul Grijalva of Arizona, Joe Crowley of New York, Jan Schakowsky of Illinois, Keith Ellison of Minnesota and Al Green of Texas were all detained by Capitol Police. The politicians, along with activists who attended an immigration rally on the National Mall Tuesday afternoon, staged a sit-in near the west side of the Capitiol.

Authorities arrested the lawmakers for crowding and disrupting the streets around the Capitol. Police arrested almost 200 people during the protest."

OMG.LOL.WT_

Funny how the Repugnients get all excited about debt when their wasteful Presidents get out of office. Then when things don't go their way they quit doing their job and try to bring the government down. Remember Gingrich and his contract. They keep crying "negotiate, negotiate". The Constitution provides for negotiation. It's called the veto and the 2/3rd over ride. Not good enough for them. Don't have the 2/3rd nut case majority, so shut everything down.

grumpy

You are correct the ACA is law passed by Congress and signed by obama. It is law... But... the debt ceiling is also law, passed by Congress and signed by obama. It is law. There is no need to change ACA, it is law. There is no need to change the debt ceiling it is law. The only way for the US to default is to not pay the interest on the debt. We get around $250 billion per month in taxes, licenses, and for my lack of a better term rent on oil fields and such things. The interest on the debt, per month is around $24 billion. The Constitution requires the interest to be payed first. It will be YEARS before we come close to defaulting.

There is no reason to talk about changing the ACA. There is no reason to change the debt ceiling. You won't even talk about the ACA changing. Why talk about changing the debt ceiling? We don't even talk about passing a budget, why raise the debt limit? Want to kick the can down the road about spending, lets do the same with the debt ceiling. Before obama we rarely didn't have a budget... even if it was late... with obama we had one in the last 5 years... even when he had a supermajority in the Senate and a majority in the house. Lets do the same with the debt ceiling. Let the gov't live within it's means.

The Big Dog's back

Per earlier post, read the "law".

grumpy

Have you read the obamacare law? Or is it a tax? Do you know which it is? Do you know the difference between tax and law? Answer my questions, completely, and I may just answer yours.

gramafun

Grumpy: The last time we had a "balanced budget" which means the Government lived within its means was when Clinton was in office. There has not been a balanced budget since that time. Name the presidents between Clinton and Obama and explain WHY there has not been a balanced budget since that time and why the government has spent so much money? Where did that budget expand and contract and who spent it? (Hint: It began shortly after Clinton left office). thank you. (I am neither Rep. nor Democrat)

grumpy

gradmafun, it was close to a balanced budget then, but when you look at it closely the National Debt went up the years that it was close. Some of the spending was not counted in the budget, but that is just me being technical and being overly correct. If you wish to be honest about why the deficit was zero you best look at what the Congress passed and how against those things Clinton was. There were large cuts in Welfare that Clinton was dragged kicking and screaming into signing it, There were many other cuts in gov't spending. Is that part of what you wish to highlight? There was actual cuts in spending, when has there been actual cuts, not just reductions in the increase of spending. The House and Senate have to pass spending bills or pass a budget that cuts spending for that to happen. Such things have not been done... except when there is divided power in the gov't. Every time on party has had majorities in both houses of congress and the presidency the spending has gone straight up, no matter the party. (Hint: You might want to think back and figure out what happened shortly after Clinton left office that took a lot of money to do, and the party make up of congress,(bush had a simple majority in congress) then check what happened with the deficit when obama took over and the makeup of the congress then also.) It takes more than a President to spend... or cut... and balanced budgets have never happened during one party rule... no matter which party is in control... at least not for many decades. But that doesn't fit your view, that it is all about the President. That is one part, the other is Congress. The President can only spend a little without the Congress agreeing. It is MUCH tougher with divided gov't keeping a leash on spending, much like what happened under Clinton.

Fun fact. Do you know the only President who has had all the deficits over 700 billion? (hint: all of his have been over 700 billion, and most were over one trillion) The furthest from Clinton as possible, so I don't think party for a President has much to do with deficit spending. It also takes a complient, same "party" Congress.

Congratulations on not being a repube or dimocrat. I haven't voted for one for President for well over a decade. Hard not to vote for one further down the ticket as few independents run for anything but President. But I usually vote dim in local elections as few decent repubes run in this area. State offices it is a toss up and probably the repubes get a slightly higher rate from me.

The New World Czar

Sounds like NBC (Nothing Beyond Clinton) network is having a week-long series on educating viewers on some of the aspects of Obamacare.

Any chance that Congress might watch this too, years after they had to pass the bill before they could see what was in it???

kURTje

Gramafun those facts will get some angry...keep it up.

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