Democrats Pass Temporary Debt Ceiling Extension With No Vote Error Margin
Tim Geithner and Ben Bernanke can both sleep well - the Great American Ponzi ("GAP") can continue for at least one more month, courtesy of Senate Democrats who all, with the exception of Evan Bayh, voted to raise the debt ceiling by $290 billion to $12.4 trillion. 59 Democrats all did their job in pretending that an exploding budget deficit is nothing to write home about, as there is this thing "called the printing press" yet with 60 votes needed America could have been on the verge of its first ever technical default. The savior: Republican George Voinovich of Ohio, who voted against party lines, and 39 other Republicans, and voted "for" unlimited printer cartridges.
The Senate's rare Christmas Eve vote, 60-39, follows House passage last week and raises the debt ceiling by $290 billion. The vote split mainly down party lines, with Democrats voting to raise the limit and Republicans voting against doing so. There was one defection on each side, by senators whose seats will be on the ballot next year: GOP Sen. George Voinovich of Ohio and Democratic Sen. Evan Bayh of Indiana.
Obama must sign the measure into law to prevent a market-rattling, first-ever default on U.S. obligations. The government piled up a record $1.4 trillion deficit in 2009 to counter a meltdown in financial markets and help bring the nation out of its worst recession in seven decades.
With the exception of Voinovich, Republicans uniformly derided the bill, though they routinely supplied votes for eight previous increases totaling $5.4 trillion under President George W. Bush.
Voinovich, who is retiring, said he voted "yes" after Majority Leader Harry Reid agreed to consider amendments when the Senate takes up the matter again next month. Bayh told the Senate Budget Committee in November that he would oppose an increase in the limit unless Congress commits to a strict new debt-fighting plan.
Had this measure not gained the necessary 60 votes, the resultant market pandemonium would have been a sight to behold, as the ponzi would have been finally forced to unwind. Yet if Voinovich is replaced with a "money printing" hawk, and if Bayh remains steadfast in his opposition to spiraling out of control sovereign debt, the Democrats, and US CDS shorts, may well be out of luck on January 20, when the measure will be subject to a revote. If at that point the plan to expand the debt ceiling to the critical $13+ trillion fails, the stock market rally will promptly hit the rewind button.