Last week, in a rather dramatic reversal, the House of Representatives suspended the debt ceiling until mid-May. Today, the Senate did the same, resolving the debt-limit fight that had been set for February.
The Senate on Thursday approved legislation that prevents the U.S. from hitting its debt limit until May 19, sending the legislation to President Obama.
In a 64-34 vote, the Senate gave its blessing to a House bill that suspends the debt ceiling until May 19, when the Treasury Department will need to use "extraordinary measures" to keep paying the nation's bills.
Eleven Senate Republicans sided with the Democratic majority, but 34 rejected the bill, even knowing the outcome. It's a reminder that while the House GOP has earned a reputation for radicalism, the Senate GOP is plenty extreme -- in this case, most House Republicans (85%) voted for the debt-ceiling suspension, while most Senate Republicans (75%) did not.
As we discussed last week, by suspending the debt ceiling, instead of raising it, this bill effectively makes it so that there is no debt limit between now and May 19 -- the Treasury will simply be authorized to borrow as necessary between now and then.
Though Democrats ideally wanted an entirely clean bill, this measure, which is now headed to the White House for President Obama's signature, was approved with the expectation that Congress will pass a budget by April. And if lawmakers fail to do so? Under the plan, Congress won't get paid.
While that might make some folks feel better about what's transpired, it doesn't change the fact that Republicans took the debt ceiling hostage, then let the hostage go in exchange for practically nothing.
Remember, it was earlier this month that Republicans had a vague-but-consistent position on the debt ceiling. They knew it would have to be raised by mid-February, but before GOP members would honor their obligations, they would demand that Democrats accept over $1 trillion in spending cuts. Under the Republican plan, no ransom meant no deal.
This strategy imploded in ways that have not yet been fully appreciated. Under pressure from the business community, and with President Obama holding firm, GOP leaders collapsed like a house of cards.
But what happens when the debt ceiling needs to be raised again in May? In theory, we could see the same crisis begin anew, with Republicans once again taking the nation hostage and threatening to crash the global economy unless their demands are met, but I'm skeptical.
The key takeaway from this resolution is that GOP leaders, for all the bluster and chest-thumping, do not want to force the nation to default on its obligations. They know the consequences would be catastrophic; they know they'd get the blame; and they don't want to go down in history as the lawmakers to hurt the nation on purpose.
And once default is off the table, the implicit debt-ceiling threat is no longer credible. Republicans had a bad hand, played it poorly, and forfeited their leverage in the process.
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When Odummy was in the senate, he opposed raising the debt celing..
Now he wants to do it with out and act of congress..
I can't wait to see him on TV again, so he can tell us all he won the election..
Oh well 4 more years of this moron in office..
Odummy? If you are referring to the President, he just kicked your billionaire's ass. His approval rating is 60%. I guess you have Romnisia.
When Obama voted against the debt ceiling increase, it was a purely symbolic gesture with no real threat of default. I still don't think he should have engaged in pointless grand-standing, but there was no real danger, unlike the recent crises where the GOP seemed completely willing to let the nation suffer.
pointless grand-standing
He definitely is not alone on that. Most of them (Congress and Presidents) do that every so often.
Always nice to have the drooler's brigade come along and let us see just how ignorant, ill-informed and stupid you have to be, to be asswipe enough to be a Republican.
Always good to give Ho Lee Cow (who probably dodged the draft during Vietnam, like most Republican "patriots") a "no value" click, an "inflammatory" click and then "ignore this author."
Just like Skippy-boy.
Hi TC. Always a pleasure to hear from you.
ho-le-crap always tries to insult the President. Has never said anything that wasn't insults or names. It's all the little mind can come up with.
Maybe it is time for them to quit being the Stupid Party? LOL
If it wasn't for the Stupid, they wouldn't have a party.
"but 34 rejected the bill, even knowing the outcome"
Sorry Steve, you cant have it both ways. You accurately described Pres. Obama's rationale for voting against the debt ceiling raise as a matter of principal knowing the bill would pass anyway.
Now, you're accusing Senate Repubs of doing the same.
Steve can't help it... He hates the American way of life. Same for maddow
"In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." -- H. L. Mencken
Hofstadter had you figured out 50 years ago, Ho:
On the pseudo-conservative (i.e. what is today's movement conservative)
"It can most accurately be called pseudo-conservative -- I borrow the term from the study of The Authoritarian Personality published five years ago by Theodore W. Adorno and his associates -- because its exponents, although they believe themselves to be conservatives and usually employ the rhetoric of conservatism, show signs of a serious and restless dissatisfaction with American life, traditions and institutions"
“Their political reactions express rather a profound and largely unconscious hatred of our society and itsways -- a hatred which one would hesitate to impute to them if one did not have suggestive clinical evidence ... The pseudo-conservative, Adorno writes, shows 'conventionality and authoritarian submissiveness' in his conscious thinking and 'violence, anarchic impulses, and chaotic destructiveness in the unconscious sphere…… The pseudo conservative (i.e., the "movement conservative") is a man who, in the name of upholding traditional American values and institutions and defending them against more or less fictitious dangers, consciously or unconsciously aims at their abolition.'"
ho-le-crap is still posting it's make believe fantisy. Ask it where it's get that the President "hates the American way of life. It's said it many time and never has an answer.
While not quite as extreme, here's another contradiction in the post. This quote:
Could accurate be re-written:
"It's a reminder that while the House Democrats have earned a reputation for radicalism, the Senate GOP is plenty extreme -- in this case, most Senate Democrats (94%) voted for the debt-ceiling suspension, while most House Democrats (57%) did not."
85% in one body voting different than 75% of the same party in the other body is not much different than 94% in one body voting different that 57% of the same party in the other house, yet one is extreme and the other is not.
Oh look...............
Since there is no debt ceiling for the next few months, is there anything to stop the Treasury from borrowing enough money during that time to cover its obligations through, say, the summer of 2014? Or is it legally required to not borrow any more than it actually needs?
Exactly. This is now the time the Treasury could print another trillion dollars, send all households $10,000 and we all live happily ever after.
shoot, you should know that that's not how it works. The Treasury has to borrow the money so they aren't anymore printing money than your school district does when it floats a bond issue. Surely you can do better than that.
No, that's exactly how it works. Treasury prints up bonds, gives them to the Fed and the Fed credits the Treasury's account. Nothing is actually borrowed, it's created out of thin air.
Shooter,
The more money that we print makes the dollar worth less. We have to have something worth of value to print money. You can't just print TRILLIONS and expect it to be worth that much.
It has to be backed up with SOMETHING or else it's just a piece of paper. They use to use gold.
Now that there is no effective debt ceiling, why couldn't the FED borrow in excess of the current needs? This could "bank" borrowed money, thus deferring the date when we would run out of money to pay the country's debt and thus postpone the next crisis date.
The Treasury borrows, the Fed dispenses.
WASHINGTON – As new weekly jobs numbers emerged Thursday showing a jump in unemployment claims and a report released the previous day showed the economy shrinking in late 2012, President Obama is effectively laying off his jobs council.
The layoff -- which comes in the form of the administration not renewing the council, which sunsets Thursday -- takes off the table a first-term panel set up to field ideas from the business community for spurring growth. But the administration was accused all along of never taking full advantage of the group at a time when the economy desperately needed those ideas.
The council itself, a group of business and labor leaders, hasn't met officially in more than a year. The group was tasked with making recommendations to Obama to help create jobs, but the 26 members only met four times in two years
The debt ceiling is gone forever. This brief delay just gives the tea party a way to save face.
Yes Ron
Only MSDNC, Liberals and Democrats can opine that
"The debt ceiling is gone forever" the spigots are open let the National Debt
continue to grow at record pace
Only if your Republican Congress votes for it. The debt ceiling has nothing to do with the growth of the national debt, it just says that the Treasury can borrow to pay for what Congress has already voted to spend. If Congress doesn't vote for more spending than the taxes they authorize cover, the debt doesn't go up, even with no debt ceiling.
If Congress doesn't vote for more spending than the taxes they authorize cover, the debt doesn't go up, even with no debt ceiling.
Redshift, do you think that will really ever happen? And it really isn't just a Republican Congress. Honestly, by most comments here over the past 4 years you would think that there are no Democrats at all in Congress or the Oval Office. But, in that same line of thinking you could say it was the Democratic Congress from 2006 - 2010 that authorized a lot of the spending that make up the current debt.
If the Democrats play it right, we might be able to have a real-life political version of O. Henry's "The Ransom of Red Chief" enacted before us. Use your imagination to figure out who would play which part.
<a href="http://www.online-literature.com/donne/1041/">The Ransom Of Red Chief</a>
I think I used the same reference a couple of weeks ago, but I'll play. Boehner and McConnell will be the two kidnappers. Obama will be the father.
And once default is off the table, the implicit debt-ceiling threat is no longer credible. Republicans bad hand, played it poorly, and forfeited their leverage in the process.
So that is a good thing right? No more "hostage taking" by the Republicans. Not sure what will happen then in a few months when the ceiling needs to be addressed again. Will it just be a rubber stamp vote to raise it on a annual or semi-annual basis? Your last comment Steve seems to imply that the Republicans will no longer have any leverage, so raising the ceiling will be just a formality - or the ceiling will be taken off. I just wonder how high our debt would go without any constraint before most people think it is an issue.
If you consider Japan's debt to GDP, Treasury could borrow $16 trillion with no problem.
Its a Trap:
If this were a free spending President, then not having a Debt Ceiling (being suspended for the interim), would be a huge temptation to pay all down all the Nation's outstanding war debts (No ceiling means the sky and stars are visible). This would not require Congress to pass any bills at all, since the debts are already incurred, from past wars, and disasters.
This generously offered temptation is just Congressional baiting hoping the President with take advantage of the poisons hidden inside.
Then the accusation for free spending will resound against the expensive investment the Republicans have made in jawing the Deficit and Debt to death.
If the President signs the legislation, he can fairly be called a weak because he has already made a strong statement against this sort of debt ceiling fiscal foolishness. This weakens his hand in dealing with the other Congressional made problem the "Sequester".
If he is about to make a strong State of the Union Address, he has to explain why, how his weaken position is a success, a long convoluted explanation will not help, and when has congress listened?
If he can see through the deception and Veto this bill, his veto message could be very strong in saying that the "Congress" should suspend its vacation schedule, holidays and sabbaticals, SoGoTP (ends with pot). His address could then be pleading and apologetic, since the Congress: House and Senate are in effect begging the President to provide cover to save their skins, from dysfunctional governance.
Congress should (it has had enough time to work on these)
1) End the sequester impasse,
2) Pass the budget,
3) Raise the debt ceiling for good,
4) Pass the immigration act,
5) Enact sensible gun safety legislation,
6) Enact national defense - alternate energy equipment and infrastructure investment policy,
7) Close Gitmo and unneeded military bases,
8) Eliminate unneeded unusable military purchases.
9) Congress then can take Vacation from 4/15/2013 to 9/11/2014.
pay all down all the Nation's outstanding war debts
....with newer debt. Kinda like paying down one credit card with a newer credit card. You make sound like our overall debt would go down. It won't.
I do agree with most of you to do list, but as usual most of that stuff will get a lot of high profile hearings/press conferences for their image (you know they will use them for their re-election ads) and then fall from view of the public.
That makes no sense. The war debts are part of the national debt. Borrowing to "pay" for the war debts would just be shuffling money around within the national debt.
Raising taxes on the rich and paying down the national debt means giving the tax revenue right back to the rich when they redeem their Treasuries.
Thing is the current unpaid bills are not "debt" in the sense of a bond, credit card or mortgage; they are debt in the sense of "accounts payable" wherein you haven't utilize a deferred payment scheme like a bond, credit card or mortgage to pay the vendor for the products or services rendered. Refusing to do so makes one liable for a tort claim for breach of contract. If the bill you are not paying IS a bond, credit card or mortgage, then you are in default on those obligations. Without issuing that "new debt" the unpaid bills are due and payable immediately.
Current unpaid bills are not "debt" that's right, but Treasuries held by the rich bought with tax cut money sure is debt. That is how public debt is held, literally held in the cold withered hands of the rich.
Obama can put a stop to the "kicking the can down the road." If I were Obama, I wouldn't sign it.
What happened to that old archaic piece of legislation called the Graham-Rudman Act? They have no intention of ever controlling spending.The GOP included.
The states should solve their own problems.Except for national defense and a few other things the Federal Government is good for nothing.Distant, cold, ineffective and corrupt.
"Distant, cold, ineffective, and corrupt."
Got the GOP down to a "T"!
Maybe so but don't forget the party of the "working man" as well. What a tall tale.
nolaughingmatter commented just now
How many of these people voted for President Obama?
Did you watch the Super Bowl!!!
http://www.youtube.com/watch?v=zR9NV7D4FVY
Democrats wanted a clean bill? You've got to be kidding me!!! Oh, I forgot, we've got Steve Benen, once again, leading this blog.
Whoop de friggin do.
Jupp good ole' steve, he's sharp as a butter knife he is..
*Whew* Stinks of troll sh*t in here....
You can "smell" what is on your computer screen??
Sure can, cow-sh*t. And you are one stinky cow....