WASHINGTON, May 16 (Reuters) – If Republican and Democraticleaders want to avoid a reprise of last year’s nasty showdownover raising the federal debt limit, they are not off to agood start.
We remember how bruising it was last year when Republicans insisted on tying the debt limit to spending cuts, and it became a long, protracted fight, one that the president and the White House says they don’t want to repeat.
House Speaker John Boehner and Harry Reid know how much we’ve all missed it, so they set the stage yesterday for early 2013, when the debt ceiling will have to be raised again.
But Boehner’s office said the meeting largely centered on the next scheduled debt ceiling increase, set to go to a vote at the end of the year, along with a “fiscal cliff” of expiring tax policies and new spending cuts coming before Congress, all by January 1, 2013.
“The lengthy stalemate between Congress and the White House over raising the debt ceiling last summer brought the United States to the brink of a historic default, and led Standard and Poor’s to downgrade the triple A US credit rating.The episode did not push up interest rates, but economists say the uncertainty it created contributed to a slowdown in economic growth last year.The US Treasury is now expected to reach the 16.4 trillion debt limit sometime between the November 6 election and early 2013, an event that eventually would halt government borrowing, force shutdowns of many operations and threaten the government’s ability to repay maturing debt.”.
Democratic Leader Harry Reid: “Their leader said their number one goal is to defeat President Obama, so they don’t mind spending a day wasting the Senate’s time on useless political show votes. Follow @DanaBashCNN for the latest on what she reminds us is Capitol Hill’s “deliberative” body.. TRAIL TRIVIA(Answer below)Move over Warren Buffett. What dexterous entrepreneur told the conservative web site The Daily Caller that he was “comfortable with” paying whatever tax rate Congress and President Obama decided upon?. If 59,301 Ohioans had voted for John Kerry instead of George W. Bush eight years ago, John Edwards would have been vice president. That fact renders us aghast on days when we read the trial testimony coming out of Greensboro, North Carolina.. On one hand, you can marvel at an election process that rendered Edwards a political loser even before he brought public shame to his family.. On the other hand, you can only stomach so much of the tawdry testimony before realizing the timing of the trial is awful for the American electorate. With trust and faith in our institutions hovering near an all time low and a difficult debt ceiling debate at center stage (yet again), a daily dose of political hypocrisy and the failings of leadership is not what the doctor ordered – especially in an important election year.. As for Gut Check, we shall always remember this trial as the one that put all other dramatic campaign phone calls in perspective. Andrew Young’s testimony of a busy day on the campaign trail interrupted by a phone call from an agitated Rielle Hunter, demanding to talk to John Edwards. Young, irritated at the campaign interruption, finally relented and said, “Someone better be dead or pregnant.
As we noted, Mitt Romney is out on the campaign trail at the very same time raising the debt issue.
We find it incomprehensible that a president could come to office and call his predecessor’s record irresponsible and unpatriotic, and then do almost nothing to fix it and instead every year add more and more spending,” Romney said.After mainly attacking Obama and his Democrats on the sluggish economy and high unemployment, Romney and other Republicans are opening a new front on an issue where they feel they have the upper hand – runaway Washington spending. Anxiety over US debt swept dozens of Tea Party fiscal conservatives into Congress in 2010.”.
They believe that talking about fiscal problems – the debt and the deficits – are good issues for them,” said Ethan Siegal, who tracks Washington politics for institutional investors. “It puts Obama on the defensive, and it gins up the fiscal activist base” within the Republican Party.Republicans “need to have their base excited about the election,” said Siegal, who added that if the economy continued its slow but steady improvement, its negative impact for Obama could wane in coming months.SEEKING MEANINGFUL DEBATEMichael Pond, a fixed income analyst with Barclays Capital in New York, estimated that Congress would not have to act to raise the debt limit until at least February, as the Treasury Department could stave off the day of reckoning by some two months with special cash management measures employed last year.More moderate Republicans in Congress welcome an early debate over the borrowing cap, but want a constructive dialogue.”.
We think it’s helpful as long as we have a strategy,” said Republican Representative Stephen LaTourette, who has championed bipartisan solutions to debt reduction.”.
Christiane Ruston is a business journalist based in Barcelona, Spain. Christiane has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Christiane spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.