Capitol Building

Morning Action: Focus, Congress, Obamacare Must Be Dealt With

LOSING FOCUS. Evidently, some GOP lawmakers are turning their attention to entitlements and the tax code rather than Obamacare:

What’s also apparent is a fast-fading Republican interest in undermining Obamacare as a condition for either revived spending or additional borrowing. Instead, the GOP is talking more and more about securing entitlement curbs and a commitment to a tax code overhaul.

Though these are important issues, the House should use its leverage to battle President Obama’s failed health care law.  Heritage Action CEO Mike Needham stated:

Washington has a notoriously short attention span.  The reason the federal government is shut down is because President Obama and his allies continue to protect a failed law that is hurting the country.  Their reckless behavior should not breathe life into misguided dreams for a grand bargain, which everyone understands is Washington-speak for undermining the sequester, increasing taxes and accumulating debt.  Congress should ensure not another dime of taxpayer money is spent on Obamacare.

SCARING SENIORS.  Apparently blocking veterans from visiting the WWII Memorial wasn’t enough for President Obama and his Administration.  Now he’s making it a point to frighten seniors by suggesting they might not get their Social Security checks if the U.S. runs out of borrowing authority at the debt limit, but Heritage explains President Obama and the Treasury can continue to issue Social Security payments at the debt limit:

President Obama threatened Social Security benefits last week, saying, “In a government shutdown, Social Security checks still go out on time.… In an economic shutdown, if we don’t raise the debt ceiling, they don’t go out on time.”

Treasury will collect more than enough revenue in fiscal year 2014 to meet all debt obligations and most non-debt obligations on an annualized basis. After prioritizing interest on the debt, the Treasury could fund $2.8 trillion in additional obligations with projected revenues. This would cover, for example, Social Security and disability payments ($848 billion), discretionary defense programs ($582 billion), Medicare ($505 billion), Medicaid ($298 billion), and $517 billion of all other obligations—in total, more than three-quarters of the non-interest budget.

SENATE ON DEBT LIMIT.  It is unclear whether the Senate can advance a clean debt limit hike:

Senate Majority Leader Harry Reid, D-Nev., said Monday he will attempt to take up clean debt limit legislation this week, and though it’s unclear whether there are 60 votes to clear a procedural filibuster, an informal WGDB whip count indicates it certainly will be close.

Assuming Democratic leaders can hold all 54 of their members (they say they can and all indicators make it seem likely), Reid would need just six GOP senators to break ranks on the motions to open and close debate.

GOP.  The House Republicans are weighing a short-term debt limit extension.  There is a general consensus that a government default would have negative economic consequences, which is a strong incentive to do something before the Treasury Department’s October 17 deadline:

With the government shutdown entering its second week and the Oct. 17 debt-limit deadline looming, House Republicans are poised to pursue a strategy that deals with each crisis separately, with an emphasis on agreeing to a short-term debt-ceiling deal as quickly as possible.

According to several high-ranking Republican aides, the House GOP leadership on Tuesday morning will inform lawmakers of its plan to continue passing individual funding bills to reopen specific areas of the federal government. On a separate track, the House majority will pursue a short-term extension of the debt limit in hopes of reaching an agreement with the Senate before next Thursday’s deadline.

The proposal being floated right now, according to aides, would extend the debt limit for roughly one month and include dollar-for-dollar spending cuts. To win over skeptical conservatives, the House proposal is also likely to include language that would instruct the Treasury Department to prioritize its payments in the event a debt-ceiling agreement is not reached.

DEBT LIMIT & GOV. FUNDING. GOP lawmakers seem to want to keep funding the government and raising the debt ceiling separate:

[I]f Republicans are going to give in on the debt limit, even for a short while, a number of GOP lawmakers said they would prefer to keep the issues separate.

GOP leadership has said repeatedly that Republicans have greater leverage on the debt ceiling. It was one of their arguments — behind closed doors — for not conflating the Obamacare fight with the continuing resolution. But now that the government has been shut down and the debt ceiling is near, some Republicans say, on background, it makes sense to keep the fight going on the continuing resolution but not the debt ceiling.

OBAMA.  President Obama indicated Monday that he may be open to a short-term debt limit increase:

The White House opened the door to signing a short-term debt limit hike Monday — and didn’t immediately dismiss the idea of allowing legislative sidecars provided they aren’t a “concession” to the GOP.

Press Secretary Jay Carney said the White House was insisting that the debt limit be raised “without drama and without delay.”

But, he said: “How they do that, I’m not going to specify or rule in anything or rule out anything. … As long as they fulfill it without drama or delay, without brinkmanship, without threatening default is up to them. And — and the duration that they attach to it, again, is up to them.”

Please Share Your Thoughts
  • John Mattson

    Obama Thinks HE Is The KING ( god ) OF AMERICA And Answer’s To No One.He
    shout down Fed parks and thing people use. Why do WE not shut down the
    white house staff Let Him cook his own food after they are on the fed
    payroll.

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  • walkerse1

    The U.S. Chamber of Commerce, the bedrock of traditional Republicanism, now says that it will get involved in Republican primaries by providing financial support to incumbent Republicans who vote to reopen the government and raise the debt ceiling.
    I think that sums up how extreme the Republicans’ position has been.

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  • Jack Goldman

    “For too long, big-government special interests have dominated Washington.
    Now we have Heritage Action for America funded mainly by Koch Industries, a special interest group, hypocritically attempting to do just that.

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  • LWM

    You describe Treasury finances and cash flow as if FICA Taxes and SS benefits were paid from the general Treasury. That is not so.
    The law that established SS specifically directs that SS taxes and benefits flow through a segregated account (held at the Treasury). It further directs that any surplus dollars be invested in Treasury bonds. This latter requirement is what creates the urban legend about IOUs and raiding the SS Fund. The Treasury does not raid the SS fund, it receives loans from the fund and has to return a Treasury Bond into the fund.
    If you visit the SS site, you can find the cash flow statements of the SS fund and it operates as directed since 1938.
    When you deduct FICA taxes and SS benefits from the numbers in your article, you quickly see that the deficit is much worse than it most commentary allows.
    SS does not borrow 1 red cent to function and will not until about 2035. This forecast can be found in the Actuaries Report.
    So including a (necessary) fix in the SS actuarial balance is essentially irrelevant to today’s Treasury borrowing.