StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



#cliffgate Officially Begins Next Tuesday

27 Aug 2013
Posted by Stan Collender

As I've said before, I'm calling the end of this year's debate two things: budget bedlam and "#cliffgate." No matter which name you use, it will begin when Congress returns to Washington next week.

There will be only 9 legislative days before fiscal 2014 starts on October 1. Approximately 15 calendar (but no more than 10 legislative) days later, the Treasury says the government will not have the cash it needs to pay all its bills. At that point either the federal debt ceiling will have to be raised so the government may borrow more or a technical or actual default will occur.

The start of the fiscal year has been known for since 1974 when it was changed by the Congressional Budget Act. But the deadline by which the debt ceiling needs to be raised is always a moving target. The latest estimate came yesterday when the Treasury released a letter saying it would have only $50 billion in cash by the middle of October and will be very close to the point at which all bills cannot be paid.

The Treasury's letter only indicates that #cliffgate won't be settled quickly.

In the current political environment, when Republicans disagree with Republicans almost as much as they disagree with Democrats, House Democrats are less inclined than ever before to supply the votes House Republicans need to pass legislation, the White House insists it won't negotiate on the debt ceiling and tax and entitlement reform are years away, it's simply not credible to expect that the differences over fiscal 2014 funding and a debt ceiling increase will be settled in 25 days. It would be all-but-impossible to do that even if the White House and Congress were controlled by the same political party and that party had a filibuster-proof majority in the Senate.

Yesterday's Treasury letter does two things.

First, it makes a temporary fix -- a short-term continuing resolution to keep the government funded and a small increase in the debt ceiling to prevent a default -- much more likely. If the October 15 date mentioned by Treasury doesn't change, there just won't be time to do anything else.

Second, it means #cliffgate will continue through the fall and into the winter.

This may be naive, but if it

This may be naive, but if it really comes down to the US defaulting on its debts for the first time ever or Boehner breaking the Hastert rule to raise the debt ceiling and maybe losing his job, would he really choose his job? I mean, it's a terrible job anyway and it's not like he will be super popular after the economic calamity that will ensue after a default.


The Unthinkable Becomes the Inevitable

It seems to me that the short calendar lends itself to paralysis with all the competing currents at work. Might the GOP Right Wing (of the Right Wing GOP) just freeze-up the process and get its Moment of Truth?

Might the Lights Go Out All Over America? (Apologies to Sir Edward Grey.)


And more stuff into the legislative hopper

Obama has just added a Syrian strike authorization to Congress' plate. But, of course, everything else in domestic finance will not be impacted.


Cliffgate And Syria?

Wandered over here to see if Mr. Collender had a post on the intersection of Syria and Cliffgate. Is Syria only a Senate problem or will the House be involved? Seems like a very interesting juggling problem for the Congress.


Both

The Constitutional text says:

Section 8 - Powers of Congress:

To declare War

That is both Houses.


The seemingly endless policy

The seemingly endless policy cliffs on the horizon have
one purpose: leverage to blackmail the President into
cutting Social Security and Medicare or to provide cover
for the President to cut these programs if he actually WANTS
to do this.

Folks: start paying attention, because "they're coming for
your Social Security" will be playing at a kubaki theatre
this fall.

It's time to hit the streets.




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