GOP Proposal "Sure To Go Nowhere" In The Senate

Tyler Durden's picture

The market ramped, modestly, on the earlier news that the House would push the debt ceiling by three months with an implied budget/spending cut provision. That the market actually moved on this headline shows front and center just how clueless the algos doing all the trading truly are, because one doesn't need Politico to tell them that this proposal is absolutely DOA and is nothing but more theater. However, those who do need Politico to tell them just that, here it is.

House Republicans will vote next week on a bill that would raise the nation’s debt ceiling for three months and attach a provision that would stop pay for members of Congress if the Senate doesn’t pass a budget, GOP officials said Friday.

 

It’s an attempt to force the Senate to lay out a spending plan, but is sure to go nowhere in the Democratic controlled upper chamber.

 

This is not a final solution to the debt ceiling battle, or anything close. Lifting the nation’s borrowing cap, which must be done by the end of February or March, will be a lengthy battle between House Republicans, Senate Democrats and the White House.

 

This strategy — trying to shift blame to the Senate — is a tried and true House GOP tactic. And it also falls in line with a new mantra leadership has been trying to instill in its membership: we do not control Washington, and cannot force the president’s hand.

...

If anything, the tactic would put front and center the Democratic Senate’s resistance to lay out its spending priorities. They haven’t passed a budget in three years.

Back to square one.

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fonzannoon's picture

Fitch? Moody's? Egan? Hello?

is this thing on?

Say What Again's picture

There is only one logical outcome from this piece of news. Buy Buy Buy...

Sell VXX

Buy every stock you can find on ARCA, NSDQ, BATS, EDGX, CDRG, NITE, etc...

trav777's picture

don't spend another dollar without a budget

Buckaroo Banzai's picture

Yawn.

On another, more important topic: I hope all of you plan to attend the 2nd Amendment rally at your local State Capitol tomorrow.

http://www.market-ticker.org/akcs-www?post=216290

francis_sawyer's picture

See ~ if we were in ITALY, those 'chambers' would be reversed... But we're not, so the Senate still gets the UPPER chamber... It gets confusing sometimes...

LawsofPhysics's picture

Damn straight Trav, it's their fucking job to manage their country, including a budget, that job hasn't been done in years.  We should be clawing back pay for Christ's sake.

odatruf's picture

The budget resolution is mostly a worthless piece of legislation since any bill of any importance that comes up later in the year waives all of the enforcement provisions in the budget anyway.

I agree that we'd be better off with one, since if nothing else it shows how screwed we really are, but let's not pretend that it really matters.

LawsofPhysics's picture

In order to actually get a real result (in any field), you actually have to do something.

odatruf's picture

I'd argue that inaction in DC, is getting a real result.  It's just that I (I assume, we) don't like that result.

 

secret_sam's picture

The economic system HAS TO crash in the future--it doesn't really matter whether the Feds cut spending, raise spending, or leave it the same.  There's insufficient productive capacity for additional credit-expansion, and after several decades of profit growth through leverage, everyone's forgotten how to build productive infrastructure.

Things have to get hecka worse before it's going to get any better.  First step is imploding the debt record, one way or the other.

thedrickster's picture

Sounds like an opprotunity to turn off EBT cards, what could go wrong?

Buck Johnson's picture

They need to downgrade the US but they won't.  This game is getting old and everybody knows that the US is afraid of austerity.

dirtbagger's picture

Worthless postering by both parties - suprised that congressional approval rating is 20% - should be below 10% and approaching 0%

Fox-Scully's picture

It is, but the current ratings are produced by the BLS with help from the realtors.

busted by the bailout's picture

The only leverage for spending cuts they have is default and shutting down the government.

Good luck with that.

buzzsaw99's picture

Boehner should probably get his dosage checked.

FL_Conservative's picture

Having BALLS would be to force completion of a "more" balanced budget now, with built-in decreases going forward into future years.

DCFusor's picture

At least this clown show is funny!  Normally it's just boring business as usual with un-funny clowns.

q99x2's picture

Let's call for a mass impeachment.

odatruf's picture

And replace them with who?  The person who ran against them last time from the other party?  You think they will be any different?

hidingfromhelis's picture

How does one return to "square one" in a circle jerk, anyway?  

CrimsonAvenger's picture

Square one is in the middle; trust me, you don't want to go there.

Snakeeyes's picture

Of course it will go nowhere. Obama/Democrats/some Republicans WANT TO SPEND, SPEND, SP END and BORROW!!!!!!!!!!!!!!!!!!!!!!!!!

They DON''T WANT TO STOP!!!!!

http://confoundedinterest.wordpress.com/2013/01/15/game-of-thrones-gold-...

indianajohns04's picture

What is the all time low on the vix like 9? I think we can hit that by February.

CrashisOptimistic's picture

 

First item, the Continuing Resolution that authorizing spending expires end of March.  That's the real deadline.

The CR exists because there is no budget.  The one thing that the GOP did right in Aug 2011 was get 1.0 T cuts up front, spaced over 10 yrs, plus the Sequester.  Those up front cuts DID reduce the baseline and that's why the Senate can't do a budget, because they would have to start from that lower baseline.  Worse, that upfront 1T was backloaded, to shield the 2012 election.  Only 4B of that 1T was in 2012.  2013 is much steeper.  That's already in law.  There's no escaping it without a new budget that shows huge spending INCREASES, the optics on which won't work.

This little chunk of fiscal drag is talked about by no one else.  But it's real and it's big.  It's 100+B of GDP drag not being talked about -- the first half of the Aug 2011 spending cut deal.  The Sequester was additional to those cuts.

 

SKY85hawk's picture

I'm confused. 

"2013 is much steeper.  That's already in law. "  How Real is a law that gets deferred by the Senate?  What stops them from doing it again?

CrashisOptimistic's picture

 

Because Ryan had it right.  This defines a lower baseline.  Any new CR is based on this.

It will be lower inflation-adjusted dollar totals than existed in 2012.  It's a true drag on GDP, which is all that matters.

optimator's picture

At least the TSA is getting rid of those body scanners.  They should be returned to Cherkoffs company for full credit, it was his idea.

pods's picture

So our basis for whether something is worked on in the House is whether it will pass the Senate?

How about someone that stands while they pee (boy, girl, no matter) in the House to tell everyone to deal with what comes out of the House, otherwise:
STFU

pods 

cxl9's picture

All talk of spending cuts, sequesters, debt ceilings, and fiscal cliffs is a waste of time. There will never be any net reduction in government spending, ever, until after the final collapse. There is simply no mechanism by which government spending can be reduced, and therefore it will not be. There will be much talk, but no action. Of course the debt ceiling will be raised. I can think of no ponzi scheme in history in which the beneficiaries voluntarily decided to come clean, shut it down, return the money to the investors, and go find honest employment. Why would this scheme be any different? It will continue until collapse. That is all you need to recognize, and plan accordingly.

CrashisOptimistic's picture

 

You don't understand the specifics.  Gov't spending cannot be reduced because it should not be reduced, because POPULATION GROWS.

You can't have 2013 spending that looks like 1913 spending because there are 200 million more people to serve.  This is the justification right wing people have trouble with mathematically when they call for spending cuts.

Spending has to reduce its rate of increase to that of population, and maybe that of GDP.  After all, a Defense Dept must defend not just people, but also property and wealth.  This is the justification that left wing folks can't understand when they see US military spending so much more than other countries.  We have far more wealth to defend.

And so, yes, there can be cuts.  There will be cuts.  They won't be as severe as the right wants and will be far more severe than the left wants.

A Lunatic's picture

Since I don't have any wealth in Pakistan, Israel, Syria, Afghanistan, Turkey........ they can start saving money right there...........

cxl9's picture

Flawed analysis for several reasons, but I will respond to just a few items.

First, total government spending as a percent of GDP was 10% in 1913. Today it is over 40%. Government spending increases at a far greater rate than population or GDP because every year the government intrudes into more and more areas of the economy. It also actively perpetuates itself, sucking in ever more resources to grow and defend itself, while of course providing ever-fewer genuine "services" to those that are forced to pay for it.

Second, I said "net reduction in spending" not "cuts". Of course there will be cuts. They will cut spending on the one or two things that actually serve the citizens in some meaningful way (highways, for instance) while increasing spending on things like bureacracy, bailouts, welfare, government employee pay, healthcare and pensions, etc. But there will be no net reduction in spending (until the collapse) because there is no mechanism by which this can happen.

Third, even if government spending levelled-off, we would still be headed for collapse. We are eating our seed corn at this point, and have been for some time. One of the perils of wealth is that you end up getting fat, lazy, complacent. We cannot reduce government size and spending quickly enough at this point to have sufficient seed corn leftover to re-plant the fields and enjoy another good harvest.

Clowns on Acid's picture

Crash - your 1st paragraph is flawed....

"You don't understand the specifics.  Gov't spending cannot be reduced because it should not be reduced, because POPULATION GROWS."

What you are really saying is "Govf't DEFICITS cannot be reduced" because population grows".

Which obviously shows that the efficiency of the Fed Gov't is the root of the problem.

secret_sam's picture

Hey!  They stole my idea to stop paying those assholes!

100pcDredge's picture

Nowhere... uhm... ok.

That's somewhere near Nevereverland, isn't it?

Btw: Lena Zavaroni sings Going Nowhere, 1981!! - http://www.youtube.com/watch?v=R8sewohu2qI

And (part II): Lena Zavaroni Sings "Mama" on Tonight Show - http://www.youtube.com/watch?v=J09IeN-ONbk

These songs will probably make you very happy!

So... listen to them - all day long.

4FREE! Indeed.

And... the best part is... you don't have to thank me! @all.

How's that?

But always remember: Walk-ON.

Yes, that's right: LeftRightLeftRight!

etc.

joego1's picture

I think there is enough money involved to install a proper cage fighting ring here.

John_Coltrane's picture

The no pay without a budget is a great motivation and extremely amusing idea, not to mention it will be very popular.  Nice strategy GOP.  At least we can get some amusement for our tax dollars.  Ball in your court, Reid.

Diamond Jim's picture

ya know I realize that the 3/27 deadline is the new, new, new line in the sand. But these lines get blurred by Rs and the H of Rep roll overs. I am a bit surprised that Rep Ryan is even contemplating this move of allowing a debt ceiling lift for even 2 days let alone  90. When will the jellyfish get a backbone.....if one looks to the fossil record you will see it took near 50 million years. So fellow tea party and libertarians...don't hold your breath. 

QQQBall's picture

The problem with a budget is it forces you to deal with reality, at least to some extent. We don't like to deal with reality.