$19.6 Trillion Debt Ceiling: Done Deal?

[Lucille]

http://i45.tinypic.com/2i7ph0w.gif

http://www.zerohedge.com/news/2015-10-26/196-trillion-debt-ceiling-done-deal


Last week, when reviewing the next steps in the 2015 version of the debt ceiling "drama" we said that "that the only certain outcome from the melodramatic debt ceiling fight over the next several days, is the following: the US is about to have a brand spanking new debt ceiling, one that should last it until March of 2017: $19,600,000,000,000."

Sure enough, with just days left until the November 3rd D-Day when the Treasury runs out of emergency cash and is forced to prioritize debt repayments over government spending, moments ago Politico reported that "congressional leaders and the White House are working toward a two-year agreement. A debt ceiling measure is on a parallel track."


House and Senate leaders are working toward a two-year budget agreement that would boost defense and domestic spending by tens of billions of dollars, according to sources familiar with the talks.

Top House and Senate leadership aides are huddling with Obama administration officials to try to hash out a deal. There are parallel talks on a measure to lift the debt ceiling, which needs to happen by Nov. 3 to avoid a default. The debt ceiling legislation would be separate from a budget agreement, however.

As we further expected, the new House speaker, John Ryan will not even get his hands dirty and instead the "negotiator" will be outgoing majority leader John Boehner, who will work alongside Democrats, and for whom at this point it doesn't matter if he concedes one last time: after all, he is out. As we said: "this means another victory for the Demorats who have required a "clean" debt raise. This is precisely what they will get, and why it will have to take place under John Boehner as Paul Ryan would surely tarnish his reputation with the Freedom Caucus if his first act is one seen as submission to the left."

Politico confirms this: "Rep. Paul Ryan (R-Wis.), the presumptive House speaker, is not part of the talks. Speaker John Boehner (R-Ohio), however, has said he would like to clear the legislative decks for the next speaker. Boehner leaves Congress Thursday afternoon."
[...]
The winner, in addition to Democrats of course who will be assured smooth sailing through Hillary election in November 2016, is also Paul Ryan: "Any deal would be a boon to Ryan as he moves toward the speakership. An accord would remove the threat of a government shutdown through the 2016 election."

And courtesy of Stone McCathy, this is what the final package deal will look like:


We're starting to see more and more reports saying that a big budget agreement between Congressional leaders and the White House could be announced later today. According to several accounts, negotiators are putting together a package that would 1) increase the debt limit, 2) increase discretionary spending levels, 3) extend funding for highways, set to expire at the end of the month, and 4) reauthorize the Export-Import Bank.

The deal would reportedly set spending levels for two years, and therefore 1) avert a government shutdown and 2) avoid a repeat of the current stalemate right before the election. Outgoing House Speaker John Boehner would clearly like to get action on the debt limit and some of these other issues out of the way before Paul Ryan assumes the job of Speaker later this week, assuming all goes according to schedule. Boehner will need to rely heavily on Democrats to get the kind of package being described passed. It would be hard for Ryan to do the same, especially in the early days of his job as Speaker. He's reportedly pledged to abide by the so-called "Hastert rule," which says the House leadership doesn't advance legislation without a the support of the majority of the majority party

The bottom line: just as we previewed it last week, it is now just a matter of time before the U.S. debt ceiling rises from $18.1 trillion to $19.6 trillion, providing enough capacity to fund the US through March 2017.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/10/20151022_debt_0.jpg

Sickening.

[ZENemy]

If one has a child and the child continues to over spend, what options does one exercise?

1. Reprimand the child, ask that he does not do it again.
2. Take the credit card away and forbid stop them from using it for 1 year or permanently.
3. Keep paying for it, tell the kid to stop it, if he does not stop it, keep paying for it, demand the kid stop it, if not, you will yell at him, but keep paying for it...make the kid move to another state, but keep paying for it, take the kid to a family meeting, yell at him about it, inform the kid that your house is in shambled due to the its spending and you cant possible make ends meet, but, just keep paying for it.

I'm sure there are many other options but I know for a fact that the 3rd option will ensure that it never, ever stops.

[euphemia]

I don't like the idea of raising the debt ceiling. If I was in Congress, I would break ranks and say, "You all know this has to end at some point. The way it stands right now, we can point to the President, Nancy Pelosi, and Harry Reid, and say to the American people, 'This is what you all voted for. Twice. Now you have a government that is too big and expensive, even if Congress voted to force everyone in the US to completely liquidate and send the money to Washington. We can't pay for what these people did. Is this really what you want, again?'"

[Zippyjuan]

If they don't want to raise the debt, they need to submit a balanced budget so the debt doesn't go up.

[Ronin Truth]

The other 200+ TRILLIONS of government debt is still yet to be recognized and accounted for.

[Zippyjuan]

You referring to expenses due to be paid in the next 70 years? (figure comes from assuming we had to pay out say all of the Social Security benefits people have earned but not collected on over the next 70 years when they eventually may be paid out).

The deficit looks at bills and revenues for this year- not bills due 70 years from now. The debt is the sum of all the years they have not collected enough taxes to pay those bills in that year. In the future, we will have tax revenues to put towards those payments due then- they do not need to be paid today.

[Ronin Truth]

You referring to expenses due to be paid in the next 70 years? (figure comes from assuming we had to pay out say all of the Social Security benefits people have earned but not collected on over the next 70 years when they eventually may be paid out).

Nope.

Are liabilities debts?

Are unfunded liabilities debts?

Smoke and mirrors and spin and BS economics does not impress me in the least.

[Zippyjuan]

Maybe we should raise taxes by $200 trillion so we have enough money to get the government through the next 70 years.

You buy a house. You don't have the money to pay for it. You have an unfunded liability. Say it is $200,000. Do you NEED to have the money to pay it off today? Or can you rely on future income to cover those payments as they come due?

[Ronin Truth]

Maybe we should raise taxes by $200 trillion so we have enough money to get the government through the next 70 years.

You buy a house. You don't have the money to pay for it. You have an unfunded liability. Say it is $200,000. Do you NEED to have the money to pay it off today? Or can you rely on future income to cover those payments as they come due?

My house is still a debt until the mortgage is paid off.

Taxation is theft.

[Chester Copperpot]

Maybe we should raise taxes by $200 trillion so we have enough money to get the government through the next 70 years.

You buy a house. You don't have the money to pay for it. You have an unfunded liability. Say it is $200,000. Do you NEED to have the money to pay it off today? Or can you rely on future income to cover those payments as they come due?

how about we get RID OF THE FEDERAL RESERVE...

[euphemia]

I think Republicans should say no. Let the President and Pelosi and Reid and all the rest rant and rave about shutting down the government. Let them scream.

I think everyone in both houses and the President should own this and start talking about a resolution. What are we going to cut right now? Start with the crew in Washington. Hiring, spending, and wage freezes for them, send the people home without pay. Start with the EPA. Make them put all that expensive furniture up for auction.

Congress should immediately pass a Priority List of departments that will close if a debt ceiling does not pass. Start with the EPA. It should be a long list of things that do not touch the taxpayer or military (can't strand them overseas). Kids should be able to go to school on the bus, even if the roads leading to their homes are part of a National Park.

Government needs to feel the pinch, not the taxpayer.

[Ronin Truth]

I think Republicans should say no. Let the President and Pelosi and Reid and all the rest rant and rave about shutting down the government. Let them scream.

I think everyone in both houses and the President should own this and start talking about a resolution. What are we going to cut right now? Start with the crew in Washington. Hiring, spending, and wage freezes for them, send the people home without pay. Start with the EPA. Make them put all that expensive furniture up for auction.

Department of Ed needs to have a look. The guy who replaced Arne Duncan does not get new furniture or staff.

The things that touch the taxpayers must stay open. Schools. Roads, and essential personnel to run them. Don't strand the military overseas. Bring them home, if possible, but we are not going to strand them. Last time this happened, some kids lost bus service to school (in violation of another law) because the road to their homes is part of a National Park. They need to be allowed to go to the schools the government has already determined should be free and convenient.

President's budget is cut for nonessential services, so his wife has to stay home and not shop. No parties. White House gets basic food for the First Family, and they can drink water.

Congress cuts staff by 50% and flies economy. Conviences for them need to close--cafeterias, gyms, and whatnot.

National Parks will remain open. You can't block off the sky, you know, and they do generate some revenue. Same with historical sites.

Military will be paid. They are duly employed, and should be paid.

Congress, on the other hand, should see budget and pay freezes until they do their jobs and get a budget that does not call for us to be in debt to China forever.

Let Congress go home and face their constitutents. The can pass blame all they want, but they need to face the voters.


The general pattern is to shut down those things that hurt the most people most, attempting to reestablish and reinforce their phony presumed indispensability the quickest.

"A nation of sheep must in time beget a government of wolves." -- Bertrand de Jouvenal

[euphemia]

Duh. Last time some Tennessee kids were not able to ride the bus to school because the roads leading from their homes to school were part of a National Park. The government contradicted themselves in that case, because the law requires that all children have access to a free and convenient education. Congress can't have it both ways. It needs to provide service according to law already on the books or repeal the existing law, releasing parents from the slavery of government education for their kids.

Congress and Washington need to feel this hit and prove they are serious about getting control of their stupidity. We are already mad at them and the President, so don't make us madder. We might just un-elect them.

And for the record, I have already said that the Senators running for President have not fared well in the debates. The governors have, because they have explained how they have to manage the business of state government in spite of the federal government.

Rand, especially, cannot vote for this, and need to own his vote.

[Zippyjuan]

how about we get RID OF THE FEDERAL RESERVE...

Will that balance the budget and pay off the debt?

[helmuth_hubener]

We need to get rid of:

The Federal Reserve
Medicare
Medicaid
Especially, all Medicare and Medicaid for illegal immigrants.
All other welfare, again, especially for illegal immigrants -- the vast majority are on welfare.
All of the far-flung, wasteful military bases around the world
Social Security
The National Endowment for the Arts
PBS
NPR
The Department of Edumacation
The Department of Letting Planes Crash into Buildings, whoops., I mean Air Traffic Control
The Department of Homeland Security
The NSA
CIA
FBI
HUD
BATF
SNAP

That should just about cover it. And yes, eliminating the Federal Reserve and returning to a gold coinage monetary system is the most fundamental. The whole rest of the list of Abolition would flow quite naturally, almost unavoidably, if that one thing were done. No dough? No go. Close down the Sugar Daddy. Let's get our house in order. This is out-of-control madness.

Of course, Zippy thinks it's fine. It's great! Zippy, like Keynes, also has no kids, so he says who cares about the future! Who cares about the long run! In the long run, he and his kind are dead. And we are left, in the ruins of their madness.

[alucard13mm]

We need to start by getting rid of agencies that are redundant and if government employees get comfy paychecks and pensions, make them work super hard by consolidating 3 departments (fire staff of 2, make 1 do work of 3).

[euphemia]

Top of the list: EPA. Clean out your desks and put that expensive furniture up for auction. Use your vacation time to get some interviews lined up. Send out resumes because you won't come back.

Next up: Dept of Education. Cabinet status gone, and this agency closes in 12 months. See above.

[pcosmar]

If they don't want to raise the debt, they need to submit a balanced budget so the debt doesn't go up.

What a novel idea.

it was rejected

Besides,, they will just turn to drug and arms sales like they have in the past to fund their illegal activities.

[Anti Federalist]

What a novel idea.

it was rejected

Besides,, they will just turn to drug and arms sales like they have in the past to fund their illegal activities.

Zip will then likely tell you that's a conspiracy theory.

[Anti Federalist]

I must not be voting hard enough.

[AngryCanadian]

We can expect when the war mongers GOP elect a war hawk.

[Contumacious]

We can expect when the war mongers GOP elect a war hawk.

Yep. And the national debt ceiling will be increased to a mere quadrillion dollars.


.

[nobody's_hero]

Maybe we should raise taxes by $200 trillion so we have enough money to get the government through the next 70 years.

You buy a house. You don't have the money to pay for it. You have an unfunded liability. Say it is $200,000. Do you NEED to have the money to pay it off today? Or can you rely on future income to cover those payments as they come due?

No. There's a problem with that.

You give them more money and they're going to spend (waste) it. They're not going to use it wisely to pay down the debt. This is the U.S. Congress we're talking about, zip.

[Lucille]

http://www.zerohedge.com/news/2015-10-27/boehner-debt-ceiling-deal-process-stinks-alternative-was-default


Today, as expected, we got the deal under precisely the conditions we envisioned. The WSJ reported:


The White House and congressional leaders reached a tentative deal Monday on a two-year budget plan that also would raise the federal debt limit.

If approved by Congress, the broad pact would allow House Speaker John Boehner (R., Ohio) to resolve two of the thorniest fiscal hurdles before he resigns later this week. If it fails, it could leave the U.S. government a week away from potentially being unable to pay all its bills.

The plan is designed to remove the risk that the government might default and diminish the prospect of a partial government shutdown in December. It would suspend the debt limit through mid-March 2017 and boost spending by $80 billion through September 2017. Lawmakers still would need to pass detailed spending bills by December, likely in one combined measure.

For it to pass the House, the pact will need to quickly win backing from most Democrats and at least a few dozen Republicans who have frequently balked at spending and debt-ceiling bills they say don’t do enough to shrink the budget deficit.

In other words, a "deal" that the majority of the GOP will likely reject, and one which Boehner will ram down the public of the republican party just because.

The deal, which further includes the selling of 58 million barrels of oil from the US SPR for no clear reason - such a sale will only generate $2.5 billion in proceeds - will pass. After all, Congress' personal financial backers, US corporations and Wall Street demand it.

Which leaves us only with the post-mortem soundbites, such as this one moments from from John Boehner.
BOEHNER SAYS AGREES WITH RYAN THAT PROCESS THAT PRODUCED BUDGET DEAL "STINKS"; BUT ALTERNATIVE WAS CLEAN DEBT CEILING HIKE OR DEFAULT
BOEHNER SAYS THERE IS NO REASON WHY ANY REPUBLICAN MEMBERS OF CONGRESS SHOULD VOTE AGAINST BUDGET DEAL
And as Boehner's last act, he now has the honor of telling the US public that its latest and greatest debt target has just been increased to just shy of $20 trillion, a number that will be reached in about 14-16 months (depending on how many more wars the US will start in the interim). Because when it comes to spending like drunken sailors, there really is zero difference between republicans and democrats.

[Ronin Truth]

I must not be voting hard enough.

Nor early and often enough. ;)

[presence]

Rice University - September 12, 1962

https://ip.bitcointalk.org/?u=https%3A%2F%2Fi.imgur.com%2Fs1bdqLs.jpg&t=557&c=Gho_ngz6TXzE1w


http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/10/20151022_debt_0.jpg



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[nobody's_hero]

Nor early and often enough. ;)

And I'd go back and vote in previous elections just to be sure.

[Lucille]

House Pushes Forward to Reauthorize Export-Import Bank, Crown Jewel of Crony Capitalism
If this is how a Republican-led Congress acts, who do they think they're kidding when they talk about limited government?
https://reason.com/blog/2015/10/27/house-pushes-forward-to-reauthorize-expo


The Republican-led House of Representatives have moved forward with a somewhat arcane and complicated procedure to reauthorize the Export-Import Bank, one of the baldest examples of crony capitalism in today's America.

Ex-Im, as it's known, was created by FDR and provides financing and loans to foreign purchasers of U.S. goods produced by favored firms (read: mostly Boeing, General Electric, Caterpillar, and other multi-billion corporations). Even Barack Obama used to cite Ex-Im as "little more than a fund for corporate welfare."

From The Daily Signal:


The House of Representatives moved one step closer to bringing the Export-Import Bank back from the dead Monday after 62 Republicans teamed up with 184 House Democrats to force a vote to reauthorize the embattled agency.

Despite opposition from the vast majority of Republicans, the House passed a motion to discharge a bill reauthorizing Ex-Im from the Financial Services Committee, 246-177. (See how your member of Congress voted.)

The vote clears a path for the chamber to vote on the legislation sponsored by Rep. Stephen Fincher, R-Tenn. Under Fincher’s legislation, the 81-year-old bank would be reauthorized through 2019.

What does that all mean? Mostly this: The GOP leadership is fundamentally dishonest when it talks about reducing the size, scope, and spending of government (this is clear, too, from the budget deal that Peter Suderman reported on earlier today). [...]

Back when he became House Majority Leader and before he pulled out of the race for Speaker of the House, Rep. Kevin McCarthy had announced that killing Ex-Im was his first priority. That was then, though. And now the GOP leadership is doing what it can to breathe life back into this shameful use of tax dollars.

De Rugy has issued this statement on the House GOP's machinations:


The move is shocking in many ways. It is a sign that many Republicans in the House have no problem showing their support for cronyism and K street at the expense of everyone else without, it seems, fear of consequences. It also shows how easily some GOP members will ally with Democrats to advance so odious a goal.

It is also a perfect demonstration that bipartisanship often results in the growth of government and the promotion of special interests. Finally, the move goes a long way to bypass regular order. It should give pause to every chairman in the House as a tactic can be used against them next.

[Ronin Truth]

Will that balance the budget and pay off the debt?

Very simple, just default on, and repudiate the government's BS debt. Clean the slate.