After the Senate promptly voted down Boehner's congressional plan, now it is the GOP's turn to return the favor after a House vote on Reid's bill is imminent at around 2:30 pm EDT, and will result in a vote down in kind. Furthermore, as The Hill reports, virtually the entire Republican block in the Senate has sent a letter to Reid expressing their opposition to his proposed legislation. "Their unified opposition to the bill leaves Democrats at least three votes short of the 60 needed to a clear cloture and virtually assures its defeat when it comes up for a vote tonight or tomorrow morning. Only moderate Republican Sens. Susan Collins (Maine.), Olympia Snowe (Maine), Scott Brown (Mass.) and Lisa Murkowski (Alaska.) did not sign on the letter." This is not surprising and it means that the only potential plan is one based on compromise, most likely using the uber-toothless McConnell plan which essentially just raises the ceiling by $2.5 trillion or so and envisions nothing else, as a framework. That said, we doubt a compromise plan is feasible especially since Wall Street refused to take the bait and umble at least 10% in the past week. In other words, we may well enter the Asian open again, not to mention FX in 26 hours, with absolutely nothing firm on the table. Only this time, there will be 24 hours until the Treasury runs out of cash, sales of Fed tungsten notwithstanding.
From The Hill:
"We are writing to let you know that we will not vote for your $2.4 trillion debt limit amendment which, if enacted, would result in the single largest debt ceiling increase in the history of the United States," reads the letter.
Senate Minority Leader Mitch McConnell (R-Ky.) took to the floor moments after the letter was delivered to assure Reid, who was also on the floor, that the proposal had no chance of clearing the chamber.
"It’s not going anywhere," said McConnell. "It will not pass the Senate. It will not pass House."
McConnell also accused Reid of "delaying the inevitable" defeat of the bill and called for an immediate vote. The first procedural vote is currently expected at around 1 a.m. Sunday morning.
Reid responded to the news of the letter, which he apparently received while he was on the floor, by asking McConnell what Republicans would agree to since they oppose his plan.
"What will they vote for?" asked Reid. "Do they have any ideas? Let me know.”
The Reid plan, as it currently stands would have President Obama request a $2.4 trillion debt-limit increase in two installments of $1.2 trillion each. The requests would be subject to congressional resolutions of disapproval."
This ongoing childish stalemate will most likely force Obama to indeed pursue the 14th amendment, which could shortly thereafter escalate into a constitutional crisis, which will have a far worse outcome than the simple downgrade of America to AA.