After weeks of speculation on how/if a debt ceiling increase might come to a fruition before, or possibly after, the Treasury department runs out of cash, the latest reports from Washington DC seemingly suggest that Chuck Schumer and Nancy Pelosi may step in to save the day for a divided Republican Party that can’t seem to get out of its own way.
As Politico notes this morning, Congressional Democrats are expected to offer Republicans their votes for a short-term funding package that would fund the government through mid-December while also raising the debt limit and delivering aid to victims of Hurricane Harvey.
“Given Republican difficulty in finding the votes for their plan, we believe this proposal offers a bipartisan path forward to ensure prompt delivery of Harvey aid as well as avoiding a default, while both sides work together to address government funding, DREAMers, and health care.”
.@SenSchumer and @NancyPelosi announce that Democrats support a three-month debt ceiling extension as part of Harvey aid bill. http://pic.twitter.com/bfAfvQ87zV
— Jennifer Shutt (@JenniferShutt) September 6, 2017
Meanwhile, as Axios notes, pursuing a deal with Democrats will undoubtedly result in a revolt by the House Freedom Caucus which is intent upon linking any funding deals to spending cuts.
Three sources with knowledge of the discussions confirmed them to Axios. They stressed nothing has been decided and the move would be highly risky, with a strong chance of a conservative revolt. It’s especially unclear whether such a vehicle could move through the House — given the Freedom Caucus and other conservative members are already angry about the plans to use the Harvey funding to raise the debt ceiling without spending cuts.
The advantage: If GOP leadership can get the CR done this week with Harvey funding and the debt ceiling that would be a big tactical victory, given Democrats may be poised to oppose the government funding extension if it doesn’t include measures to support DACA.
Per a source close to GOP Senate leadership: “Leadership is testing the waters in the Senate for adding the CR…Senate leaders will only add it if House leaders believe they can pass it. Problem is the CR is the vehicle for the Dems to demand a DACA fix and the Freedom Caucus to fight that and push for spending reductions. It is a bold idea but putting together the votes seems tough.”
Meanwhile, the spread between 10/5 T-bills and 9/21 paper just collapsed indicating that the market is buying the the Schumer/Pelosi hope for now…
Then again, it all may be short-lived as Paul Ryan described the Pelosi/Schumer deal as “ridiculous, disgraceful and unworkable” just moments ago…
“I think that’s a ridiculous idea,” House Speaker Paul Ryan tells reporters during news conference in Washington about Democrats’ offer to support Harvey aid along with a three-month extension of the debt limit, which could set up another showdown at the end of the year.”
“I think that’s ridiculous and disgraceful that they want to play politics on the debt ceiling when there are people in need following the hurricane.”
via http://ift.tt/2w7jo23 Tyler Durden