The revised debt ceiling increase/deficit reduction bill that House Speaker John Boehner (R-OH) now is pushing toward a vote in the House tonight apparently includes not just a requirement that the House and Senate vote on a balanced budget amendment to the U.S. Constitution, but that the House and Senate must pass the amendment. If the amendment isn't actually adopted by both houses, Congress would be prohibited from considering the second increase in the federal debt ceiling that will be needed later in the year under the Boehner plan.
In other words, the new Boehner bill requires not just that the Senate consider the constitutional amendment but actually dictates what the outcome must be.
This unambiguously is an attempt by Boehner to appeal to the tea party wing of the GOP to get the votes he needs to get something...or anything...out of the House today.
House Speaker John Boehner (R-OH) failure to get enough votes yesterday from the Republican caucus to pass the deficit reduction/debt ceiling legislation he drafted has the federal budgeting world scrambling today for new options.
With only four days left before the August 2 date on which the Treasury says the federal government will begin to turn into a fiscal and financial pumpkin, two options that up to now were said must not be spoken -- the Lord Voldemorts of the budget -- are starting to be discussed very openly.
The first would be a decision by Boehner to work with House Minority Leader Nancy Pelosi (D-CA) and Minority Whip Steny Hoyer (D-MD) to come up with a bill that 100 or so Democrats will support. They'll need that many because any bill that attracts Democratic votes will mean that Boehner will lose more Republicans than the 25 or so that yesterday reportedly could not be moved to vote for the bill.
My column from this morning's Roll Call talks about what will happen if and when we reach August 2nd without a deal that will allow the debt ceiling to be increased.
I have never been as confident that a deal would be reached as other analysts and observers, most of who were saying that there would be a deal because...well...in the end there's always a deal.
Until yesterday I had been telling clients that the odds were less than 50-50. Based on all of the events since last Friday, I now think that there's no better than a one in three chance it will happen by the August 2 date the Treasury says the federal government will turn into a fiscal pumpkin.
Honestly, sincerely, and fervently, I hope I'm wrong.
Dissecting the Possible Outcomes of Hitting Debt Ceiling
By Stan Collender
Roll Call Contributing Writer
House Speaker John Boehner (R-OH) reportedly told House GOP in a conference call this afternoon that he's working on a new $3 trillion-$4 trillion spending cut plan and that he plans to make some type of announcement before Asian markets open this week to reassure them that it will be enacted and that there will be no default.
Boehner is taking a huge risk by doing this.
If a spending cut of that size was adoptable it would have already been adopted and the markets will immediately see through Boehner's remarks to what he's really saying -- that he has made no progress at all with his tea party wing and still has to placate them.
Boehner's announcement is far more likely to be taken as a further indication that the debt limit stalemate is real and intractable than as a sign that it will all work out.
I hate to say I told you so, but this story from Steve Liesman at CNBC confirms what I've been saying for a while about the big negative reaction that will be coming from Wall Street if the debt ceiling isn't raised. Here's the money quote:
Nearly two-thirds of the 78 economists and Wall Street strategists and money managers who responded to the survey see a selloff of 3 percent or more if the debt ceiling is not raised.