As Treasury Is Set To Issue $32 Billion In Bonds Tomorrow, Boehner Says No Debt Ceiling Raise Without Trillions In Cuts

Tyler Durden's picture

While DC may continue playing its debt ceiling soap opera, crunch time for the Treasury is approaching as the first of three auctions is on deck: the first one for $32 billion in 3 Year Notes. The total raised will be $72 billion without any offsets from maturities. Elsewhere, the Treasury will catch a $16 billion break after it settles $100 billion in Bill maturities offset by $84 billion in new issuance, yet still the net total of $56 billion in new debt seems to be a slight problem since as of Friday, there was just $23 billion in total capacity under the debt ceiling. Granted, the Treasury has already announced it is commencing the tapering off of other debt programs such as the State and Local Government (SLGs) which however will have at most $5-10 billion in favorable impact per month. It is also cutting its debt issuance forecast in half, likely due to an expectation of maturing old Bills without rolling these, a feat which will consume all if not more of the $108.9 billion in total cash available at the Treasury. So that's the math, and now back to the theater, where Politico reports speaker John Boehner "will call on Congress to offset a debt ceiling hike with spending cuts of a greater amount, an ambitious proposal that puts House Republicans on a collision course with Democrats who want much more modest spending restrictions attached to the vote."

“Without significant spending cuts and reforms to reduce our debt, there will be no debt limit increase,” Boehner plans to tell the Economic Club of New York here this evening, according to remarks obtained by POLITICO. “And the cuts should be greater than the accompanying increase in debt authority the president is given. We should be talking about cuts of trillions, not just billions.”

Under Boehner’s vision, for example, Republicans would have to find more than $2 trillion in cuts if they wanted to raise the debt ceiling by that amount through 2012 — which is in line with Treasury’s estimates on the debt limit. But Republicans could also go for a more incremental increase in the debt ceiling, coupling that with a smaller offsetting cut in spending.

But by mentioning “trillions” in long term cuts, Boehner is clearly putting entitlement reform in play — including Medicare — since it would be near impossible to cut trillions without affecting entitlement spending.

Boehner will say that “everything is on the table … that includes honest conversations about how best to preserve Medicare, because we all know, with millions of Baby Boomers beginning to retire, the status quo is unsustainable. If we don’t act boldly now, the markets will act for us very soon.”

That fact that Boehner is taking his case directly to Wall Street is significant — the Republican leader clearly wants to send a message to the markets that he’s got a strong plan for a debt limit package.

The funny thing is that the market has an odd tendency of getting the upper hand in these DC-Wall Street confrontations, whether it be a flash crash, or a sudden and "unpredictable" surge in rates, which will remind Congress just how broke this country is, and just how unsustainable the budget deficit would be if interest rates were to rise by several percent (not to mention the hundreds of billions in losses that the Fed would have to disclose courtesy of its $1.5 billion DV01.)

And while we do not expect much fireworks in the primary bond issuance market yet, it may be time to start getting concerned at 12:59pm for the next three days: if the market wishes to send a message back to Boehner, that's the time it would choose to do so.

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Thorlyx's picture

Yeah, why not. Go on.....

Sudden Debt's picture

If they would empty all THE wishing wells in THE world...
They might have Enough to cover it...

monopoly's picture

It is slowly all coming together. We all know the ending of this movie. Watch that volume control. Going to get loud around lunch timel

monopoly's picture

sudden debt, you have got to be the coolest Canadian I have met. lol

Cdad's picture

Candian?  I thought sudden was Euro trash.

buzlightening's picture

boner a dead head fed cluster flocker traitor. We'll be cutting trillions over the next century.  Buy our century bonds now. LOLOLOLOLOL

JPM and the CME did not count on the SLA. This was their fatal error. Our numbers are too great. Each pullback radicalizes more to join the SLA. Those who don’t believe JPM and the Fed can be taken down with a global silver run are wrong.
jpig will begin puking even as QEIII being priced in & mkts up.
I can hear demon now. We are well capitalized. The silver shortage has been contained. All the while the US Citizen will get stuck with this bailout as well!!  ROTFL!!!!!!




Re-Discovery's picture

(Bevis laugh)

He said boehner

(Bevis laugh)

Re-Discovery's picture

I just wanted to get people used to what their likely to read in the Congressional Record of the debt ceiling debate.

MachoMan's picture

It will say a whole bunch, but in the end it should read "our spending policies have been wholly unsustainable for a very long time, but we're finally near the end of being able to hide it, except for the fact that these nice guys in TBTF financial institutions/FED help kick the can down the road that much longer so that our transgressions cannot be fully realized until we have better insulated ourselves."

goldfish1's picture

Boner was all about tarp 1&2.

Cleanclog's picture

Newt Gingrich will announce his "debt ceiling" plan on Wednesday, Boehner be damned.

BetTheHouse's picture

Newt and Boehner are not exactly pals.  Boehner was a leader of the failed coup against Newt when he was Speaker. And was cast into the wildnerness for years because of it.  Lesson: If you are going to try to knock someone off, better make sure you actually kill him, not just wound him. 

Cleanclog's picture

Yup, just another reason that Newt will try to undermine Boehner.  Mostly, it will be his early posturing for White House run.  Watch Wednesday.

masterinchancery's picture

Boehner has been doing a good job of undermining himself, doesn't seem to need much help from Newt, the ethanol lobbyist.

cossack55's picture

I am down with that, baby. I've been yelling for years that we need to bring back duelling.  Solve many problems, quickly.

And none of this new shit either. No S&W 500 with Crimson Trace grips and a 30 power scope. No, no. We are talkin 18th century cap and ball or swords/sabres. 

ColonelCooper's picture

If the person dueling me had a firearm with a thirty power scope, I would choose a sword.

rokakoma's picture

I'm wondering where will the Treasury find $33B till 16th May, to fill the gap above the debt limit ... Worst case, they have to buy back some treasurys by cash.


That will burn their cash balance pretty fast ... faster than early august, I'm sure ...

buzzsaw99's picture

The Boehner is turgid.

Dr. Porkchop's picture

I guess the reason Boner is so brown is because of his complete shit-full-ness.

Alex Kintner's picture

Boner has a bad habit of smearing his Dirty Sanchez. I got a dog who likes to roll in horse maneur -- so it's a known condition.

Hephasteus's picture

So they have to soften this boner guy?

Is this the same bohner that passed out checks from big tobacco on the voting room floor. That is responsible for billions being poisoned with big tobacco additives.

topcallingtroll's picture

PEOPLE have a choice about smoking.
I am not coercing them.

The real threat to liberty is the extraction of
excessive taxes by force to support this bloated inefficient productivity killing monster.

Cut the budget like you mean it this time, tea party.

Hephasteus's picture

Do they have a choice about cancer additives and addictiveness additives and line breeding for addictiveness. Do alchaholics have a choice about their body to choosing to keep alchahol in their system for twice as long as non alchaholics.

When you were born did were you in complete control of your body or did you spend years just learning to use your hands.

downwiththebanks's picture

No - the real threat to liberty is the banker-gangsters robbing your wealth.  That they own the politicians simply makes their job easier.

As usual, Top Caller, you're all for killing grandma but you CONDEMN the very idea of taxing the banker-gangsters when they lever up using government money at their nerdy little Quant Casino.

I wonder why.  



* except me and my fellow banker-gangsters.  We have needs - like man-purses.

plocequ1's picture

$32 X-large? But i thought the math wont allow us to do that. I guess John Nash and his equilibrium theory is full of shit. Fuck it im buying more Pcln. 

Jim B's picture

SSDD!  Chance of "real" large cuts.................. ZERO!

cxl9's picture

If Congress refuses to raise the debt ceiling, they should simply be rounded up, arrested, and thrown into Guantánamo as enemies of the State. The American Congress is useless and corrupt, and long ago abdicated any legitimate claim they have to govern the country. Just get rid of them already. Think of the money it would save.

topcallingtroll's picture

Yes always the solution of authoritarians and advocates of big government.


downwiththebanks's picture

"Anyone who doesn't hand over cash to insolvent banker-gangsters should be rounded up and taken to a stolen island."

Impressive logic.  The banker-gangsters love you.

atomicwasted's picture

The executive branch will simply ignore the debt ceiling, most likely on the grounds of national security/defense.  Because no one has standing to challenge a breach of the debt ceiling in court, the precedent of the executive having the right to ignore law and the accompanying power of the executive will grow as well, giving the White House two reasons to just blow through the debt ceiling. 

cosmictrainwreck's picture

Excellent strategy. New Exec. Orders comin' (bitchez). Why didn't I think of that <slaps forehead>

topcallingtroll's picture

Please stand your ground tea party.

Give them only extensions in 500 million dollar allotments.

Take an axe to government spending each time the debt limit is reached.

Hand the combined bill over to the president for his signature thirty minutes before doomsday.

Let the president veto it and default. Tea party ends big government either way.

downwiththebanks's picture

The banker-gangster mantra is so fucking pathetic:  "austerity for the Greatest Generation, just as long as I keep my free money for gambling, hookers, and drugs."

Rhone_Ranger's picture

LOL @ Boehner!!

When they're done hashing it out, a couple trillion will really mean a couple billion spread out over the next ten years.  By then, it will be someone else's problem?

Jim B's picture

+ a Trillion or two....

ColonelCooper's picture

"will really mean a couple billion spread out over the next ten years. "

Until the CBO scores it, after the fact, and it turns out to $1,342. Over ten years.

Rainman's picture

Barry hates this talk bout money goin away. Money ain't for savin, it's for spendin. We need to talk more about SEAL headshots.

Mr Lennon Hendrix's picture

The Republicans will be "blamed" for another financial crisis then!  Harriman is laughing from the grave!!!

topcallingtroll's picture



chet's picture

Hate to break it to you, but the tea party is a minority faction in one party that controls one-half of one branch of government.  They can make themselves annoying, but they aren't calling any shots.

hound dog vigilante's picture


No, they are not calling any shots... yet.


The writing is on the wall. TP was written-off two years ago as astroturf populism. Now the TP is pulling an LBO on the GOP.


You thought the 2010 election was brutal (for incumbents)?  2010 was a dress rehersal for 2012... pols who vote to raise the debt ceiling... gone.  Pols who vote to fund the IMF... gone.  Pols who vote for bailouts... gone.


Keep on shorting the TP... see how that position plays out.


downwiththebanks's picture

The Tea Party is not even real - it's a corporate construction, funded by austerity hypocrites who use government money to lever up on paper.

I'll never vote for either of the two parties, but none of the clowns running can beat the incumbent.  Ronmey-Paul-Huckabee-Polenti:  are you serious?

It's not even close.  It's just not possible, considering that Barry has the full-throated (and full-walleted) support of his banker-gangster puppeteers.

hound dog vigilante's picture

And FWIW, I think Boehner is toast. He's a country club republican in the unenviable position of having to placate a leaderless populist movement... ain't gonna work.  Boehner's idea of "budget cuts" has already compromised his ability to herd the TP into the GOP corral.  He's gonna cut a multi-decade spending deal with the WH/Treasury/Fed, and that deal will be the pike upon which the Tea Party sets Boehner's fake-tan head...


Kinda like this idea of heads on pikes... along the on/off ramps on the D.C. beltway... a warning for those who approach with bad ideas and other people's money...


Gubbmint Cheese's picture

If your Boehner persists for more than four hours, call your physician..

Implicit simplicit's picture

Good one! He's just another peckerhead politician trying to shoot-off his mouth.

Rhone_Ranger's picture

Don't Worry, He didn't mean it.....  Tanning Machines, when combined with high levels of bourbon, make you see extra "zeros."

Rainman's picture

+ 2 packs of Marlboro Red