The U.S. government shutdown continues with no clear end in sight, but the political debate has now pivoted to the debt ceiling limit and whether or not the government will run out of money to pay its bills by Oct. 17, and therefore default on its debt.
Check here for the latest updates on all the political jostling and practical impacts.
From PostTV’s Jackie Kucinich:
Senate Chaplain Barry Black has spent the last nine days praying for Congress to save themselves from themselves, but news that families of soldiers recently killed in Afghanistan were not receiving death benefits provoked a different message.
“It’s time for our lawmakers to say enough is enough,” he said Wednesday morning from behind the Senate lectern. “Forgive us, reform us, and make us whole.”
In testimony right now before the Senate Finance Committee, Treasury Secretary Jack Lew warned that payments to Social Security beneficiaries could be at risk if the debt ceiling isn’t raised soon.
“Between October 17 and November 1, we have large payments to Medicare providers, Social Security beneficiaries, and veterans, as well as salaries for active duty members of the military,” Lew said in prepared remarks. ”A failure to raise the debt limit could put timely payment of all of these at risk.”
From The Fix’s Chris Cillizza:
Budget expert Stan Collender predicted Wednesday that there is a “50 percent chance” the nation breaches its borrowing limit on Oct. 17.
“It doesn’t mean we are going to default immediately but it does mean that we are going to get to that point without a political resolution of something that should never be in question,” Collender told “In Play”.
In response to several questions about why President Obama has refused to negotiate on the debt limit ceiling, Treasury Secretary Jack Lew testified that Obama will not negotiate about “paying our bills.” But he did say that Obama is willing to negotiate future budget priorities after the bills already incurred are paid.
“I think the record is clear that the president has negotiated, has wanted to negotiate and remains anxious to negotiate on a bipartisan basis to have a fair and balanced approach to dealing with our fiscal problem,” Lew testified.
In further testimony Thursday, Treasury Secretary Jack Lew said that the Treasury Department has looked at many options if Congress does not approve the debt limit and concluded that there is ”no good solution if Congress fails to raise the debt limit.”
Lew wouldn’t entertain a discussion of which priorities, such as interest on Treasury securities, Social Security payments and veterans benefits, might be paid at the expense of others.
“No president has ever had to decide whether to pay some bills and not others,” Lew said.
Sen. Chuck Schumer of (D-N.Y.) asked Treasury Secretary Jack Lew how long before damage to the U.S. economy might begin because of a lack of action on raising the debt limit.
Schumer: The way to avoid a potential cataclysm is to pass a clean debt ceiling now, not delay, and say, well, we can wait until the eve of the 17th or the 19th, or October 31st, is that right?
Lew: Well, I must say, there’s a parlor sport in Washington of “when is the last minute.” You can’t do that with the debt limit. With the debt limit, if you look for the last minute, and you make a mistake, you have done serious damage to the U.S. economy, to the world economy. It’s just not responsible. It’s reckless.
House GOP leaders are pushing a short-term increase in the debt limit, without any conservative strings attached, so that jittery financial markets would rest more easy, according to senior GOP advisers. The plan is being presented at a 10 a.m. huddle of the House GOP caucus in the Capitol basement, and if it 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.
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 shutdown of the federal government, an issue that would move onto a separate track of talks.
The plan would meet Obama’s demand for an increase in Treasury’s borrowing authority without any legislative riders, meaning Democrats would likely support the plan and it could be signed into law. But it would set the stage for entrenched negotiations, possibly up till Thanksgiving, over bigger fiscal matters, since the tentative plan calls for a six-week lift 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.
Financial experts much prefer that a longer term extension of the debt ceiling be approved, 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 had 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.
A new Quinnipiac poll shows most Virginians (58 percent) say that have not been inconvenienced by the shutdown, but about seven in 10 are opposed to it.
At the same time, the 41 percent who say they have been personally inconvenienced is significantly higher than the 25 percent of adults nationally who reported inconvenience, according to a Pew Research Center poll released Monday. Just 15 percent nationally report a “major inconvenience,” compared with 25 percent of likely voters in next month’s Virginia governor’s contest, according to the Q poll.
Virginia has one of the highest levels of federal employees in the nation, given its proximity to Washington, D.C., and its large military contingent.
Democrats are hopeful of pinning the shutdown on GOP gubernatorial candidate Ken Cuccinelli, who campaigned with Sen. Ted Cruz (R-Tex.) in recent days. Democratic nominee Terry McAuliffe is up with ads hitting Cruz, who has led the Defund Obamacare movement, as the man behind the shutdown.
With Scott Clement.
RNC Chairman Reince Priebus is up with a National Review op-ed noting that the same Democrats criticizing Republicans for seeking debt limit concessions have in the past voted against raising the debt limit themselves.
Here’s the crux:
In 2006, when the national debt was less than half of what it is today, then-senator Barack Obama voted against raising the debt ceiling. In 2007 he refused to vote altogether. The same was true for then-senator Joe Biden, who also voted against raising the debt ceiling in 1984, when the debt was just $1.6 trillion.
Said Biden in 1984, “I must express protest against continually increasing the debt without taking positive steps to slow its growth.” The debt today is ten times as large, but the administration opposes any “positive steps to slow its growth,” to quote our current vice president.
“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure,” said Senator Obama five and a half years ago. Would he say the same thing today now that the debt has shot past $16.7 trillion? Would he admit his “leadership failure” to get spending under control?
Harry Reid and Nancy Pelosi are no better. They both have voted against increasing the debt ceiling in the past when they didn’t get what they wanted. In 2006, Pelosi decried a “debt ceiling of $9 trillion” as too high. Where’s her concern today?
In 2004 she argued, “We just can’t give a blank check over and over and over again to this administration.” Today, she’s eager to hand over that check to President Obama.