Is There a Thaw in the Budget Fight? And, If So, What Was That About?!!?

October 10th, 2013 at 10:53 pm

I hung about on the Larry Kudlow Show tonight and we spent the whole show talking about the status of the shutdown and debt ceiling (and the relief rally in the markets today–here’s one link).  The plates of the debate seem to be shifting in ways that could be positive, though virtually all the signals are mixed.

No point in going into great detail since things could quickly change course, but a few notes to consider.

–The House R’s went to the White House with an offer for a clean, short-term debt ceiling extension, but the President did not appear to accept the deal, as he and Reid continue to strongly advocate for a clean debt ceiling increase and a refund-the-government bill.

–So did the R’s storm out and complain that the WH won’t negotiate?  Not at all.

In statements afterward that struck the most positive tone in weeks of acrimony, House Republicans described their hour-and-a-half-long meeting with Mr. Obama as “a useful and productive conversation,” while the White House described “a good meeting,” though “no specific determination was made” about the Republicans’ offer. Both agreed to continue talks through the night.

–Larry K interviewed Rep Steve Scalise, a Tea Party lieutenant who’s been a vicious opponent of Obamacare.  But he’s morphed from tiger to pussycat, suggesting that maybe some changes to the health care could be part of deal…you know…whatever…

–Various R’s and other conservative commentators on the show suggested that they’re ready to conference with D’s on the budget.

–There is an increasing awareness that the polls are turning sharply against the R’s on all this obstructionism (and even maybe helping Obama); also, the strong reaction of the financial markets today did not go unnoticed.

–Rep Lynn Jenkins, Vice Chair of the House Republican Conference was also on and said, “Opening the government is a negotiation that will happen tonight and in the hours ahead, and we hope to have it open by Monday night.”  I wouldn’t take that to the bank, but…there it is.

So, there’s at least a decent chance that Congress could negotiate clean bills for the CR and debt ceiling over the next few days.  All of which leads one to ask:

Huh?

What the XXX was that all about?!?  Sen Cruz got the extremists all fired up on this mission impossible to repeal Obamacare, they shut the government down, threatened default, and now it’s: hey, let’s have a budget conference!  (Something Senate D’s have been calling for six months, btw.)

It’s like Marc Thiessen said the other day: it’s the Seinfeld Shutdown.  The shutdown about…who knows?  The Republicans don’t really know what they want—last I heard they’re back to sweeping fiscal concerns, though even that may be too precise.  Boehner said today he wants to sit down with the President “…to start to deal with America’s pressing problems.”

Hey, go for it, dude.

In fact, what I think they—the R’s leadership and increasing troop numbers—may really want is to get the hell out of this mess they created.  Godspeed.

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4 comments in reply to "Is There a Thaw in the Budget Fight? And, If So, What Was That About?!!?"

  1. Fred Brack says:

    Jared,

    Could you consider using darker type in the body of your posts for the sake of old-folks’ (like me) eyes? When you use bold-face, like in the lede to this post, it’s so much easier to read. So much! You might even consider increasing the type size and/or changing the font. (See Slate’s recent redesign as an example of improved readability.) You’re a modest fellow, I know, but don’t hide your enlightenment under a bushel.

    Thanks.


  2. alex zaffron says:

    Jared-Thanks for your reply to my post to your column on ‘dysfunctionalism’

    A poser which is related to the increasing market pressures that were coming to bear: While all of the indicators of incipient market stress (s/t Treasuries, VIX, CDS spreads)were screaming, we have heard little from S&P, Moody’s and Fitch.

    My question is this: S&P downgraded US debt in 2011, not because of financial condition, but instability and unpredictability of governance (Guess who?). Moody’s and Fitch placed US debt on watch for(ostensibly) the same reasons. This episode is, and has been, even more volatile and uncertain than Aug. 2011, yet we have, again, not heard anything new from the agencies that still rate US securities AAA.

    Seems to me, given that this episode has demonstrated, if anything, an even more unstable legislative environment, that downgrades from Moody’s and Fitch, to at least match that of S&P are likely to be forthcoming, and that the investor community should prepare for that eventuality.

    Am I missing something here?


    • purple says:

      S & P downgraded Japan years ago and their debt yields interest rates nearly as low as the U.S.

      S & P has been wrong on so much, give it limited credence.


      • Jared Bernstein says:

        Yep–and remember, these were the folks that brought you re triple-A ratings for toxic securities–terrible track record and evidence of a “missing market” for sound analytics in this space.


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