Debt Ceiling Debate Could Spell Trouble for Wall Street
Wall Street is betting that the looming debt limit debate will, as in the past, be resolved. Politico’s Ben White and MJ Lee, however, argue this time could be different. "Really, seriously different," write White and Lee:
The House GOP is hopelessly fractured on spending strategy. Senate Republicans who might otherwise broker a deal face primary challenges that make compromise potentially deadly. Other Senate Republicans are jockeying for 2016. And congressional Democrats have no appetite for any bargain — grand or otherwise — that cuts entitlement spending.
Add to that uncertainty over President Barack Obama’s next Federal Reserve nominee—and the concomitant fallout with some Democrats if he taps Larry Summers—and you have a toxic political brew that spells market uncertainty, White and Lee claim.
With the nation expected to hit the debt ceiling again around October, top Democratic House Ways and Means Committee member Rep. Sandy Levin (D-MI) has already made it clear Democrats refuse to compromise.
“Democrats are unwilling to bargain on the debt ceiling,” Levin said in May.
Such Democratic diffidence may prove problematic for Obama and Democrats’ desire to paint a portrait of Republican recalcitrance.
“The president got his tax increase in January,” said Speaker John Boehner (R-OH). “Now is the time to get serious about solving the spending problem.”
In the Senate, Republican Leader Mitch McConnell (R-KY) said tackling the debt is critical to achieve a debt ceiling deal. “I can tell you with certainty I think it’s extremely unlikely that any Republican is going to vote to raise the debt ceiling without doing something about the debt.”
So far, however, Obama appears uninterested in compromise or a spirited debate over raising the debt ceiling again to avert a government shutdown.
“To even entertain the idea of this happening, of the United States of America not paying its bills, is irresponsible. It’s absurd. We’ve got to pay our bills,” he declared.