Debt fight blindsides Congress

[brooklynite]

Source: Politico

President Donald Trump’s top economic aides are urging Capitol Hill leaders to raise the debt ceiling by the end of July. And Congress is totally unprepared to do so.

Lawmakers in both parties thought they’d have until the fall to act, and they had planned to roll the always-difficult vote into a broader spending package that could be more easily swallowed. That strategy may now have to be tossed aside with the debt limit deadline approaching faster than expected.

The White House request raises the prospect of a bruising fight over the debt limit — not just between Republicans and Democrats but within both parties. The GOP is torn over whether to combine spending cuts with the debt ceiling lift, and Senate Democrats are already signaling they may push for their own concessions because their votes are going to be needed to avoid a devastating government default.

The request will also scramble the congressional calendar. The GOP is currently embroiled in an effort to repeal Obamacare and rewrite the tax code, two massive legislative items that are expected to suck up time and energy all summer. And now, they’ve been caught flat-footed by last week’s pleas from White House budget director Mick Mulvaney and Treasury Secretary Steven Mnuchin.

Read more: http://www.politico.com/story/2017/05/30/debt-ceiling-lift-238861

[yallerdawg]

1. Blindsided?

First paragraph of letter Treasury Secretary Mnuchin sent to Speaker Ryan March 16, 2017:

"I write to keep you apprised of actions the Treasury Department is taking in regards to the debt limit. In my letter of March 8, I noted that the Bipartisan Budget Act of 2015 suspended the statutory debt limit through March 15, and informed you that beginning today, the outstanding debt of the United States would be at the statutory limit. Yesterday at noon, in anticipation of being at the debt limit today, Treasury suspended until further notice the sale of State and Local Government Series securities. My prior letter described the use of this extraordinary measure, as well as the possibility that additional extraordinary measures might be necessary to utilize. This letter serves to notify you, pursuant to the requirements under 5 U.S.C. § 8348(1)(2) and 5 U.S.C. § 8438(h)(2), of additional extraordinary measures Treasury began using today."

https://www.treasury.gov/initiatives/Documents/DL_Letter_20170316_Ryan.pdf

[NCjack]

3. Yes, you make a good point. But, no one in the WH or Congress read their mail.

Also, although Mnuchin sent the letters, did he read his own letter? (I doubt that.) The problem is with Mnuchin's staff chief. He failed to hire a female that would sexually excite Mnuchin, Trump, Ryan, and McConnell and have her read the Mnuchin letter to each one of them in private.

[Honeycombe8]

4. Doesn't that letter mean they don't intend to raise the limit?

They're suspending sales of securities (debt). But says add'l extraordinary measures might be necessary....to stay at the statutory limit. ???

[yallerdawg]

8. The Treasury is taking actions to stay under the limit on the books.

This has become common since the debt limit became a negotiation tool.

Technically, Congress was under the notion that the administration could keep cooking the books until this Fall.

Unless revenue matches expenses, at some point the government would just stop spending money - shutdown. Including Federal payrolls and Social Security checks. Military pay. Contractor pay.

They COULD pick and choose the programs they want to continue, and cutoff the ones they don't - but the political consequences would be devastating!

[Jim Lane]

10. They're suspending sales of only one class of securities.

The State and Local Government Series (SLGS) securities are sold by the federal government to the states to help the states manage their finances (detailed explanation here). If the federal government stops selling new securities in this series, older ones will continue to mature (and can no longer be rolled over), meaning that the total outstanding federal debt in the SLGS category will decline. That will free up room under the cap for the federal government to take on additional debt to fund ongoing operations.

Thus, the immediate consequence of this debt-ceiling foolishness is that the states are deprived of a useful service that the federal government has been providing to them for years. This outcome is, of course, the work of the party that loves to inveigh against the excessive power of the federal government and call for devolving more functions to the states.

[Honeycombe8]

11. Thx. nt

[maxrandb]

2. Why is the WH requesting to raise the debt ceiling?

I thought by now, with all the "winning" in this administration, we'd be rolling in the dough

Fuck it, let the damn thing crash!

Seems the only way to get through to the Deplorables is if someone comes and starts repossessing their cars and TVs.

Hey dumbfucks! All the "white sheets" in the fucking world aren't going to save you when this CON-servative, Trickle-Down, "I've got mine so fuck you" house-of-cards collapses.

[Honeycombe8]

12. And all that money from the NATO countries is now "rolling in"! We're rollin' in dough! nt

[Bucky]

5. No one knew budget balancing could be so complicated if you slashed tax rates & jacked up spending.

Who could have possibly foreseen that the millions saved in PBS and Meals on Wheels funding wouldn't completely offset the tens of billions of dollars added to the Pentagon's budget. What are Trumpees supposed to be--mind readers?

[Renew Deal]

6. It doesn't have to be difficult

They can just raise it with no conditions

[keithbvadu2]

7. White House and both Houses of Congress... Republicans own this.

[DK504]

9. No damnit.

We need to raise the cap on Social Security cap and make the 1% pay their damn taxes. Then we might be able to have nice things like schools.

[FakeNoose]

13. They don't care about schools

But the rest of us do. We care about a lot of things including the environment, our infrastructure, clean water, safe cities, affordable housing, etc.

As long as the one-per-centers can get the middle class (that's mostly us) to pay their eff-ing taxes for them, they probably don't care about anything. They have to get their free ride, and nothing else matters. They really don't care about the national debt either, they just use that to clobber the Democrats with.