Debt Ceiling Deadline Already Breached

But didn’t the Gang of Six plan come out today, to the chorus of growing support, just in time to save the universe?

Well yes. But remember some promises that people made in the last election cycle.

And no, I’m not talking about taxes.

I’m talking about promises to read bills before you vote on them.

Essentially, if Congress is going to vote on this measure without slamming it through Congress, they need a finished draft by the end of the week. That’s both chambers, mind you. And right now, the House side is a little more preoccupied with their piece of legislation, which is going to get stonewalled in the Senate.

If this is going to get done, it needs to be passed by the beginning of next week. However, since it contains tax raises and entitlement adjustments, that means any discussion can slow the vote down towards the end of next week.

If anyone in the Senate filibusters, then the chamber needs to run around looking for 60 votes to break it up; and I’m not thinking it’s going to be a Senate Republican to filibuster. More likely it’ll be some grissly New Dealist from an archaic time.

Meanwhile in the House, tax increases need to pass freshmen lawmakers who are most interested in seeing the government get smaller; I’d guess that desire is just as easily satisfied by a government that starves to death as one that willfully swears off transfat…if you follow me.

So we’re looking at a situation where a massive budget bill needs to be present in both chambers by tomorrow or Friday, where it can stand over the weekend so that it can be voted and approved virtually without discussion by the beginning of next week so that the two chambers can then restitute the bills and send it to the White House where it can be voted on without oversight so that treasury officials can break it into pieces and try to fathom all the implications of the law and the effects it has on their ledgers.

Can it happen? Sure, if the government gets into high gear right now, there might even be time to spare.

But looking around, shy of the Gang of Six proposal, which is pretty extensive to be implemented as law and passed before August 4, that might be a tough mark to meet. More likely, you need to break the piece up and have a bill that raises the ceiling now, plus some sacrificial cuts, with promises to address the rest later.

And that starts up fights when one side starts claiming the other is just trying to bury the overarching reform needed for “later,” where it will never get done.

Basically, if you wanted to see the debt ceiling get raised, the best time to vote on those measures was the beginning of this week. But everyone was too busy trying to kill each other, so a lot of precious time was wasted.

Next would be the beginning of next week. I don’t expect the measure to be embraced, so good luck with that.

Which leaves us as a country approving expenditures on our debt within a week before those payments are due. Not a lot of time to complete the sales to raise the funds to make the payments, if you catch my drift.

Maybe they pay first and cover the balance owed later? Or they already have a buyer in mind (Fed??)?

But all in all, I think this discussion goes right down to the wire. The payments will probably go out, whether by the tips of the fingers or the Obama administration already preparing to implement the transactions in defiance of the law…but it will be last second and you will all be pretty fucking surprised before the end.

There’s definitely one last good shakeout in this market.

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