Time For Another Budget Showdown

WASHINGTON, DC - JANUARY 23: (L-R) U.S. House Minority Leader Nancy Pelosi (D-CA), Senate Minority Leader Chuck Schumer (D-NY), Senate Minority Leader Mitch McConnell (R-KY) and House Majority Leader Kevin McCarthy ... WASHINGTON, DC - JANUARY 23: (L-R) U.S. House Minority Leader Nancy Pelosi (D-CA), Senate Minority Leader Chuck Schumer (D-NY), Senate Minority Leader Mitch McConnell (R-KY) and House Majority Leader Kevin McCarthy (R-CA) talk at a reception held by President Donald Trump for House and Senate Republican and Democratic leaders in the State Dining Room of the White House January 23, 2017 in Washington, DC. (Photo by Ron Sachs-Pool/Getty Images) MORE LESS
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The four congressional leaders are meeting with Treasury Secretary Steve Mnuchin, acting OMB Director Ross Vought and acting White House Chief of Staff Mick Mulvaney Tuesday morning at House Speaker Nancy Pelosi’s (D-CA) office to talk budget.

The task on the table? Agree on spending caps and lift the debt limit, per Politico. If the two sides can’t play ball, punishing spending cuts known as a “sequester” kick in during early 2020.

As usual, Republicans want to beef up military spending while Democrats want parity between military and domestic funding.

If they can’t come to an agreement, they can kick the can down the road until December. And based on the utter lack of cooperation over smaller legislation this session, like the disaster relief bill, the odds don’t look great.

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  1. This is why I’m putting as much cash as possible in my savings account since I expect Trump Shutdown #4 and this one will go for a long long time.

  2. Avatar for fgs fgs says:

    This is the biggest ball Democrats are dropping. Half the regular appropriations should be passed by now, and they should all have automatic continuing resolutions and automatic debt authorizations built in! The ball should be unambiguously in the Republicans’ Senate court why nothing can ever get done right.

  3. The budget is one thing but as mentioned so is the debt ceiling. We have already hit it so the old games of delyaing pension payments and other tricks can continue for awhile. In the meantime the Treasury is no longer borrowing money. It is helped in this because it had a huge surplus in its ‘account’ which stood at $285bn Friday. Down from the near $400 billion it had been carrying for most of this year.

    The Treasury out of the markets with new borrowing is a gift to the financial markets as not having to absorb that supply other things can be bought. When the ceiling is raised then the Treasury will be back in the markets with a gigantic new supply of Treasury paper. Without fail during these periodic debt ceiling dog and pony shows the entire world says that the debt impass is bearish and settling it is bullish. In fact the opposite is the case because of how the lack of Treasury supply or the flood of it after settlement has a large impact on market liquidity.

    The budget is careening out of control and woe be if we enter a recession. That is why there is all this call for more QE. The Fed in coming years is going to do QE Infinity to fund the deficit. There is no choice, It is an existential necessity for the system.

    You can keep score at home on the Treasury’s cash position here
    https://www.fms.treas.gov/dts/index.html

    and the Feds borrowing schedule here.
    https://www.treasurydirect.gov/instit/annceresult/press/press_cashpydwn.htm

  4. Avatar for jinnj jinnj says:

    agreed - generic logic would say that the shutdown stuff has been played out for now … but we are dealing with Trump - the ultimate sore loser - and a vindictive sore loser - so there is a very real possibility that Trump would want to take another swing at winning the ‘shut down’ game … count on him manipulating things to incorporate some truly painful and damaging elements into the mix this time around -
    Trump’s twisted vengeful nature compels him to settle scores - and his mental illness leads him to demonize any and all individuals who may have bested him in a legitimate interaction - he is incapable of recognizing the boundaries between normal & illegitimate competition - for example - if you beat him in a tennis match at the country club - to him it would be entirely OK to key your car & slash your tires

  5. The four congressional leaders are meeting with Treasury Secretary Steve Mnuchin, acting OMB Director Ross Vought and acting White House Chief of Staff Mick Mulvaney Tuesday morning at House Speaker Nancy Pelosi’s (D-CA) office to talk budget.

    What’s with the “acting” OMB and “acting” WH Chief of Staff? According to the Wiki Mulvaney is still the Director of the OMB while also acting as WH Chief of Staff. So much ‘acting’ in this administration.

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