StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



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  • #Cliffgate Begins: Why The Shutdown Will Last At Least A Week   25 weeks 2 days ago

    I was pretty sure that as soon as the government closed, this week was completely gone, and there is now a 90+% chance that this is correct. And the reasons that our host suggests are among the most relevant.

    Missing from this analysis, however, is the fact that as soon as next Monday, October 7, dawns, we will be 10 days (or so) away from the government defaulting, and that will take up an increasing proportion of Congress' time. There have been recent murmurs about the House somehow combining the CR with a debt ceiling raise, but those seem to have been predicated upon the notion that the House somehow has some magic leverage with the debt ceiling that they do not have with the CR. I am convinced that this is wrong, but if the two issues are combined, then the Senate could send the House a "clean" combination by the weekend (Friday would be October 12), which there will be incredibly intense pressure to pass before the markets open on the morning of October 15, after Columbus Day. So October 15 would be the magic day. On the other hand, there's probably a 50% shot that the debt ceiling raise is the only thing that gets passed by then, which is why October 15 is the over/under day for me, right now.

    Note: I say "10 days or so" in the paragraph above because the government shutdown in the short term may be allowing the Treasury to conserve some cash, but I do not know how much. I think it is highly unlikely to be enough to make the mandatory payments that need to be made at the beginning of November, however.

  • #Cliffgate Update: The Ultimate Irony Of The Shutdown Is...   25 weeks 3 days ago

    Hey Kevin, if you think there should be negotiations, what concession is the GOP offering? I'll wait.

  • #Cliffgate Update: The Ultimate Irony Of The Shutdown Is...   25 weeks 3 days ago

    If is now an acceptable practice to revisit laws one doesn't agree with by holding up funding for the entire government, what would prevent the Democrats trying the same thing? Think of the revenue they could generate by reversing the Tax Relief Act of 1997 and making Roth IRAs taxable. Sorry, but this is a dumb strategy. The solution to this country's fiscal problems requires hard work by both sides, not this my way or the highway approach.

  • #cliffgate Update: Is A Shutdown Boehner's Only Way Out?   25 weeks 3 days ago

    Shutting down is not the only way for Boehner. There are many options and roads. I hope you can get out of the situation, it happens sometimes.

  • #Cliffgate Update: The Ultimate Irony Of The Shutdown Is...   25 weeks 3 days ago

    OK, compromise is good; let's negotiate. Exactly how many dead American poor people do we need to give up to get the government opened back up again? Can we trade Obamacare for the Reagan tax cuts?

  • #Cliffgate Update: The Ultimate Irony Of The Shutdown Is...   25 weeks 3 days ago

    @ Keith

    Better to remain silent and be thought a fool than to speak out and remove all doubt.

    Abraham Lincoln

    you just removed all doubt

  • #Cliffgate Update: The Ultimate Irony Of The Shutdown Is...   25 weeks 3 days ago

    The point that people keep forgetting is that the negotiations already took place. They're over. The Democrats and Republicans agreed on the numbers for the FY14 CR. The Republicans then added the ACA amendments AFTER the negotiations took place.

    Why should the Senate Democrats accept additional terms after they've already made their deal with the Republicans? All that would happen is that the Republicans would start demanding more and more concessions. Senator Reid is correct--the House Republican caucus has no credibility. Why cut a deal with someone who's already proven that they'll renege on that deal for no reason?

  • #Cliffgate Update: The Ultimate Irony Of The Shutdown Is...   25 weeks 3 days ago

    Seriously? A party which likes to claim fiscal responsibility removes the one crucial component of the program that is necessary to keep costs reasonably contained? If there is no mandate, there is no 'pool' to spread the risks.

  • #Cliffgate Begins: Why The Shutdown Will Last At Least A Week   25 weeks 4 days ago

    You're assigning equal probabilities to a left-flank revolt as to a right-flank revolt.

    I admittedly know nothing about the particulars of Bohner's district (I mean, I didn't even realize that the Wonka factory was in Ohio, much less that the OompaLoompas were naturalized citizens!) but if it's similar to the way the GOP redrew in Wisconsin then the risk of getting unseated from the left in a general election is infinitesimal compared to the risk of getting primaried from the right.

    I think that his incentives run contrary to what you think they run.

    I find it deeply ironic that the competitive GOP-held districts generally have moderate GOPpers ("moderate" relative to the modern GOP) and it is this population (not the Teahadis) that will inherit the wind.

  • #Cliffgate Update: The Ultimate Irony Of The Shutdown Is...   25 weeks 4 days ago

    If Obama and Senate do not want to negotiate/compromise, then keep the government shut down. This hurts Dems more than Reps. The media bias only goes so far in brainwashing Americans. Since Obama has unlawfully delayed certain aspects of the law, it is entirely reasonable for the Reps to want to lawfully delay other aspects of a bill that has never had popular support of the American people. The reps are on the right side of history here. Stand your ground, and keep it shut down.

  • #Cliffgate Begins: Why The Shutdown Will Last At Least A Week   25 weeks 4 days ago

    One, and only one, thing matters for resolving this: When the voters in Boehner's own district get few up. At that point, he will be motivated to bring up a clear CR, for which we already know there are sufficient votes. He might even decide to do what is right for the country, and do one for a whole year, not just a couple of months.

    He could do the same thing on the debt ceiling, while he was at it. Get all the unoleasantness out of the way at once, so his constituents don't see him acting like a puppet with cut strings for any longer than they have already.

    Yes, if may get a movement going to replace him as Speaker. But being Speaker of a House which is unable to actually do anything isn't really all that wonderful. Especially when you have to keep attending meetings full of reality-challenged fanatics.

  • #Cliffgate Update: The Ultimate Irony Of The Shutdown Is...   25 weeks 4 days ago

    As far as actual appropriations go, there was full agreement between both parties in both houses.

    The only difference is that a minority of GOP House members insisted on tacking on an unrelated provision to try and do a backdoor repeal of the ACA.

    The latest proposal out from the House today is to get rid of the medical device tax repeal and the contraceptive exception, keep the one year delay of the individual mandate, and add a provision to eliminate the subsidy Congress and their staffs get for the exchanges.

    The GOP has backed themselves into a corner here. They're not arguing over appropriations, they're demanding a defunding/delay of the ACA, which IS NOT GOING TO HAPPEN. They have no negotiating leverage because they've only had one demand all along it's always been and always will be a nonstarter.

    Conferencing will not fix this situation. I can't think of any "compromise" (and I use that word lightly) that will satisfy the TP and actually have a chance of Senate approval. Not one.

  • #Cliffgate Update: Is This The Beginning Of The End For The Tea Party?   25 weeks 4 days ago

    Don't forget that the Republicans picked up seats in Congress in 1996 despite being blamed for the shutdowns. The same could happen for the Tea Party.

  • #Cliffgate Update: The Ultimate Irony Of The Shutdown Is...   25 weeks 4 days ago

    Yes, the government will shut down. Boehner was unwilling to bring a clean CR bill to the floor of the House.

    Now, in the next two weeks, what is the sequence of steps that has Boehner bring a resolution to lift the debt ceiling to the floor of the House?

    Anyone? Stan? Buehler?

  • #Cliffgate Begins: Why The Shutdown Will Last At Least A Week   25 weeks 4 days ago

    If Boehner brought up a clean CR right now, it would get a large majority of R votes. So the only way things stay shut down is if Boehner keeps blocking a clean CR, which he can only do (politically) if he can at least pass something to send over to the Senate. But if 17 Rs stop helping him do that, he loses the ability to pass anything without Democrats. Once that happens, Rs either suffer the image problem of not being able to pass anything at all, or Boehner brings up the clean CR and it passes by a huge margin.

  • #Cliffgate Update: The Ultimate Irony Of The Shutdown Is...   25 weeks 4 days ago

    IMHO the Senate should try again (in their time between quick votes to table the house CR) for a conference committee on the budget for all of FY 14. This would show that they're willing to negotiate, but not until the hostages are free.

  • #Cliffgate Begins: Why The Shutdown Will Last At Least A Week   25 weeks 4 days ago

    If and when people see their 401ks drop, they will pick up the phones.

    Congress will compromise when stocks drop 10 or 15 percent, be it from the Shutdown or default.

    Thanks for the great blog!

  • #Cliffgate Begins: Why The Shutdown Will Last At Least A Week   25 weeks 4 days ago

    Number 7 seems wrong. Republicans would fire Boehner as speaker if he brought up a resolution to a vote with less than 100 republicans supporting it. Particularly with such an important "opportunity" as this one.

  • #Cliffgate Update: Is This The Beginning Of The End For The Tea Party?   25 weeks 4 days ago

    How does it end?

    It depends on those Republicans who do not believe that a CR and a debt limit raise are suitable for enforcing major policy changes.

    Boehner or 30 Republican moderates could bring about a vote of the whole House on the Senate bills. They will be accused of treason against Republican principles, of course, so they need cover from an actual shutdown to point out the damage to the party and the failed prediction that Obama would fold. Boehner should get a promise of protection for his speakership from House Democrats until Jan 2015, the Democratic concession, or signers of a discharge petitions could get a promise from Boehner to not be punished by the leadership.

    I don't know, however, how long they would have to wait to enable such a vote in the House without damaging themselves too much.

  • #Cliffgate Update: Is This The Beginning Of The End For The Tea Party?   25 weeks 5 days ago

    Another possible action by the president would be to raise taxes...If all possible actions are illegal than why not do the thing he has been trying to get the Republicans to do all along? Just raise the witholding on high incomes. That wouldn't be any-more (or less) illegal than the other proposed actions...

  • #Cliffgate Update: Is This The Beginning Of The End For The Tea Party?   25 weeks 5 days ago

    I hope Obama does not give an inch to these crazies. A few days ago I saw an article about a GOP Rep who declared there will be a defund Obamacare provision in every bill the House GOP votes on from here to eternity. Seriously ?

  • #Cliffgate Update: Is This The Beginning Of The End For The Tea Party?   25 weeks 5 days ago

    But I cannot say the same about the American people. 1990's conservatives and post-2010 conservatives are night and day different.

    If Democrats cannot convince GOP leadership of some rationality, I believe the GOP's radical faction may potentially get stronger, as this will be the end of Boehner's reign as Speaker and McConnell will be voted out next year.

  • #Cliffgate Update: Is This The Beginning Of The End For The Tea Party?   25 weeks 5 days ago

    Here's how I see the worst case for the debt ceiling. Say that GOP doesn't back down. President (and Senate?) refuses to sign any un-clean bill. President waits right up to and past Treasury's target date (currently Oct 15). Now the President can categorically state that GOP was willing to default on the country; GOP will make the same claim on the President. President states that he now has to break the law - reduce spending below appropriations is illegal, increase taxes is illegal, borrow the difference is illegal. Then he tells Treasury to issue more debt in violation of the debt ceiling. House cries foul and moves to impeach (Senate will table that completely). House also sues the President. Arranging the legal case will take time. Before the hearings can start GOP backs down or finds an acceptable solution.

    If it did get to Supreme Court, debt ceiling will lose. I suspect the main argument will be that Congress taxing and spending levels imply the President must borrow the difference. The first two are constitutional powers of the House, the debt ceiling is not, so debt ceiling loses. 14th amendment will be mentioned, but will not be the final nail.

  • #Cliffgate Update: Is This The Beginning Of The End For The Tea Party?   25 weeks 5 days ago

    I have a hashtag, #haironfire, which I'm using for twitter at the moment on this topic. Stan's welcome to use it, as is anyone else who reads this site.

    Here's why my hair is on fire: the House GOP, plus the kamikaze caucus in the Senate (Cruz, Lee) knew the House had little leverage over the CR fight, because Reid would strip out defunding/delay/Vitter/other mischief-making amendments.

    But they went ahead anyway - because Boehner and the GOP leadership calculated this was their best chance to maintain the unity of their caucus.

    What Boehner and Cantor had wanted to do was get the CR out of the way with a token gesture over the CR, then have the Big Fight over the debt ceiling raise - because they believe they have more leverage there, and they believe Obama will quickly fold. And they will be heroes.

    Guys, the CR/shutdown is a sideshow. The long term viability of the tea party, for now, is a side show. In the short term, the House GOP is being run on the basis of "we don't do compromise. We fight."

    I literally cannot see a plausible sequence of steps that get a debt ceiling resolution onto the floor of the House in the next two weeks. The only way such a resolution passes is if Boehner tables it, it gets 30 Republicans and 190 Democrats and squeaks through - and Boehner immediately thereafter resigns as Speaker. Only scenario, and I don't think it's going to happen.

    Then we're into managing the consequences of default. Assume, just for a moment, it!s not The End Of Western Civilization As We Know It. Does Obama, as one commentator on an earlier thread suggested, mint some platinum coins and invoke the 14th Amendment? He'll be impeached the next day, and the government won't reopen for months.

    #haironfire

  • #Cliffgate Update: Is This The Beginning Of The End For The Tea Party?   25 weeks 5 days ago

    I'm still holding out hope that there is an 11th hour deal that averts a shutdown. But supposing that doesn't happen, and the shutdown goes forward, how does it end? Neither the Senate nor Obama will go along with measures to defund, delay, or gut the ACA, not going to happen. The House isn't going to agree to a clean CR once the shutdown actually occurs. So what then? Is the Tea Party really going to go on record as tacitly supporting Obamacare in exchange tor getting the Dems to agree to some of their other demands like approving Keystone XL and repealing parts of financial reform and environmental regs? They'll be remembered as the party of pollution and big banks. Maybe that is the endgame for the Tea Party.



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