Sen. Ayotte: Solve Problems Like President Reagan

Republican Sen. Kelly Ayotte of New Hampshire evoked President Ronald Reagan in arguing against the House Republican strategy to defund Obamacare by forcing a government shutdown.

"Look where we are," Ayotte said Sunday on CBS' "Face the Nation." "The government's shut down, Obamacare exchanges are still open."

"I think it's time for conservative problem-solvers to get things done," said. "That's what Ronald Reagan did."

However, Republican Rep. Tim Huelskamp of Kansas, said the government will not go into default on Oct. 17, and the White House is trying to scare markets with its rhetoric about raising the debt ceiling by that date.

"There are no payments due on Oct. 17 to pay our creditors," Huelskamp said on the CBS show.

Pressed by host Bob Schieffer that Treasury Secretary Jack Lew has said the opposite, Huelskamp noted that Lew "said a lot of things a week ago," and that the "White House is trying to scare the markets. "

Via: Newsmax

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Who, Exactly, Just Blinked in the Debt-Ceiling Showdown?

If you're wondering who just blinked first in the tense back-and-forth between Democrats and Republicans over the government shutdown and debt-ceiling deadline, the answer is: It's a photo finish.

In fact, both Speaker John Boehner and President Obama are blinking—that is, giving up ground—at nearly the same time. Picking up on hints from Treasury Secretary Jack Lew on Wednesday that the president was open to a short-term debt-ceiling increase, Boehner and the House Republican leadership obliged him. On Thursday morning, they came out of a meeting to announce they'd support "clean" legislation of the sort Obama wanted to raise the debt limit—but only for the next six weeks. Then, during that period, Boehner and his team said, the president needs to sit down and talk about concrete spending cuts and other issues.

In his remarks, the House speaker clearly intended to convey that he was meeting Obama "halfway," and that the GOP was holding out on an agreement to open the government until Boehner heard something more from the president in talks scheduled for this afternoon. "That's a conversation we're going to have with the president today," Boehner said.

So who's making the greater concession? We'll likely find out over the next day or so. But it's obvious there is marginal movement toward the middle, in a foot-dragging way, from what had been two hard-line positions. Boehner, taking his cue from the tea-party sub-caucus in the House, had initially insisted on presidential concessions related to the start-up of Obamacare this month. He appears to be letting that slide, to the consternation of the tea party. Suddenly all the talk is about spending in general—entitlements and tax reform—not Obamacare, which Boehner and his team have come to accept that the president cannot budge on, given that it is his signature domestic achievement. In separate op-eds Wednesday, both House Majority Leader Eric Cantor and Budget Committee Chairman Paul Ryan both called for debt-ceiling negotiations without mentioning health care at all.

Via: National Journal

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Treasury: Debt Up $0 in August; CBO: But Deficit Was $146B

(CNSNews.com) - The federal deficit increased by $146 billion in August, according to a report released today by the Congressional Budget Office. But, at the same time, according to the U.S. Treasury, the federal debt did not increase at all during the month.

Total federal receipts were $185 billion during August, according to the CBO, while total federal outlays were $331 billion. Thus, the Treasury was forced to engage in $146 billion in deficit spending.

Despite this deficit spending, the Treasury reported that at the close of every single business day in August, the federal debt subject to a legal limit by Congress remained exactly $16,699,396,000,000.

That is approximately just $25 million below the legal limit on the debt that is $16,699,421,095,673.60

If the federal debt had climbed by the same $146 billion that the deficit climbed in August, it would have exceeded the legal limit by almost $146 billion.

In fact, according to the Daily Treasury Statements that the Treasury publishes at 4:00 p.m. on each business day, the debt subject to the legal limit has remained at exactly $16,699,396,000,000--or about $25 million below the legal limit--every day since May 17.

Via: CNS News

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What happens if the debt ceiling isn't raised?

The Treasury has been up against the debt ceiling since May 19. But Secretary Jack Lew warned last week that his ability to create headroom under the $16.7 trillion limit will run out in mid-October. The threat facing the Treasury, and the nation, is what happens then if Congress doesn’t raise the limit.

In the worst-case scenario, the government fails to make payments on the interest on its debt, an outcome that could create a global financial crisis.

Yet Congress is not close to lifting the limit. With just a few weeks to go, House Speaker John Boehner, R-Ohio, is demanding spending cuts in return for the House voting to raise the ceiling, while President Obama is saying he won’t negotiate over the government paying its debts.

What if Congress doesn’t raise the debt ceiling in time? The following is a stage-by-stage guide to the consequences that would unfold if the cap isn't raised. It is based on the last brush with the debt ceiling in 2011 as well as earlier episodes — the debt ceiling has been raised 78 times since 1960.

Extraordinary measures

The Treasury currently is paying all of the government’s bills without issuing new debt by engaging in what it calls “extraordinary measures.” By manipulating accounts and postponing scheduled intra-government transfers, the Treasury can eliminate the need to issue bonds to finance those needs, and instead use newly issued bonds to pay obligations as they come due, without adding to the level of debt.

Via: Washington Examiner

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Jack Lew: Obama will negotiate over government funding, not debt limit

Treasury Secretary Jack Lew reiterated Tuesday morning that the Obama administration will not negotiate with congressional Republicans over the debt ceiling, but will seek a fiscal bargain with Republicans in funding the government.

Lew appeared on CNBC’s "Squawk Box" the morning after sending House Speaker John Boehner a letter projecting that the Treasury would run out of headroom under the debt ceiling in mid-October. Lew explained that the letter was not a threat, but that “we’re sharing the information we have” and “it means Congress does need to act” to raise the limit.

Lew reasserted several times during his interview with CNBC’s John Harwood that the White House won’t engage in negotiations with Republicans seeking spending cuts or changes to Obamacare in raising the debt ceiling. But he also indicated that the administration remains willing to talk with the GOP about making other large-scale fiscal adjustments in the upcoming government funding showdown that will take place just shortly before Lew expects the debt ceiling to become binding in mid-October.

President Obama is “looking for the sensible common ground” in trying to make sure the government doesn’t shut down when funding runs out on Oct. 1, the beginning of the new fiscal year, Lew said. Lew made sure to distinguish between negotiations over the debt ceiling and over a new budget or continuing resolution, calling the latter “very different from something as fundamental as saying we’ll put the full faith and credit of the United States at risk.”

In negotiating over funding the government, Lew said, Obama is aiming to replace the sequestration cuts with other fiscal savings and “looking for the sensible common ground,” including entitlement reforms and changes to the corporate tax code. Lew said that Obama has “made clear he’s willing to do tough things on entitlements” but that any such changes would “require balance” in the form of tax hikes.

But even in the continuing resolution talks, Obamacare would remain off the table. In response to Harwood’s question whether the Obama administration would accept any defunding or delaying of Obamacare in a bill funding the government, Lew simply responded “no.”

Lew said he has exchanged calls with Boehner and other Republican leaders regarding the coming fiscal showdowns.

Via: Washington Examiner

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Lew Tells Congress Treasury to Hit Debt Limit in Mid-October

The U.S. will hit the $16.7 trillion debt ceiling in mid-October, Treasury Secretary Jacob J. Lew said in a letter urging Congress to raise the limit “as soon as possible.”

“Extraordinary measures are projected to be exhausted in the middle of October,” Lew said in the letter today to House Speaker John Boehner and other lawmakers.

“At that point, the United States will have reached the limit of its borrowing authority, and Treasury would be left to fund the government with only the cash we have on hand on any given day,” he said. He said the cash balance at that time is forecast to be about $50 billion.

The Treasury Department had earlier said it probably will be able to finance government operations by using special accounting measures until after Congress returns Sept. 9 from its recess. Lew said Aug. 22 a failure by Congress to raise the debt limit would “have disastrous effects for our nation” and could put at risk payments to Social Security recipients and veterans.

Boehner said last month the Republicans wouldn’t increase the debt ceiling “without real cuts in spending” that would achieve a further reduction in the deficit. Lew has said the Obama administration won’t negotiate on the debt limit.

The Bipartisan Policy Center, a nonprofit research group, has estimated that the U.S. will reach the point where it is unable to pay its bills sometime between mid-October and mid-November unless Congress increases the limit.

Via: Bloomberg

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