by Bill McBride on 1/11/2013 07:55:00 PM
Friday, January 11, 2013
From the NY Times: ‘Any Lawful Steps’ Urged to Avert Default
“In the event that Republicans make good on their threat by failing to act, or by moving unilaterally to pass a debt-limit extension only as part of unbalanced or unreasonable legislation, we believe you must be willing to take any lawful steps to ensure that America does not break its promises and trigger a global economic crisis — without Congressional approval, if necessary,” wrote Senators Harry Reid of Nevada, Richard J. Durbin of Illinois, Charles E. Schumer of New York and Patty Murray of Washington.I remain confident that the debt ceiling will be raised, and that the US Government will pay the bills.
Democratic leadership aides said the Senate would probably take up legislation in early February that would allow the president to raise the debt ceiling on his own in set increments, perhaps of $1 trillion. Congress would have the ability to reject the increase, but that would take a two-thirds majority.
That plan was first used at the suggestion of Senator McConnell in 2011 to solve the last debt-ceiling impasse.
However "fear" will start slowing the economy soon - just like in 2011 - and the House will receive (and deserves) all of the blame for any damage done to the economy.
I assume the House is looking for a way out, and maybe another McConnell bill is the solution.
Posted by Bill McBride on 1/11/2013 07:55:00 PM