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.