Serpo
1st June 2011, 04:25 PM
By Jackie Calmes
THE NEW YORK TIMES
Published: 10:29 p.m. Tuesday, May 31, 2011
WASHINGTON — The U.S. House overwhelmingly rejected a measure Tuesday to increase the government's debt limit without requiring any spending cuts, a vote staged by GOP leaders to pressure President Barack Obama to agree to deep spending cuts.
The measure, defeated 318-97, was brought up by Republicans to show that there was little House support for raising the $14.3 trillion debt ceiling without concrete steps to rein in chronic budget deficits.
Voting against the measure were 236 Republicans and 82 Democrats. No Republicans — including Reps. Michael McCaul of Austin, John Carter of Round Rock and Lamar Smith of San Antonio — voted in favor. Democratic Rep. Lloyd Doggett of Austin declined to vote for or against the measure, instead voting only "present."
"I chose not to play along with their phony game," Doggett said.
The vote followed several acts of political theater on the House floor: Republicans brought up the measure and then urged its defeat, while Democrats — who not long ago were seeking just such a vote to raise the debt ceiling without attaching spending cuts — assailed Republicans for bringing it up, saying its certain defeat might unnerve the financial markets.
Just in case, GOP leaders scheduled the vote for after the stock market's close and had called Wall Street executives to assure them that the vote was just for show to make the point that Obama would have to make concessions in budget negotiations if any debt-limit increase is to pass.
"This vote, based on legislation I've introduced, will and must fail," said Rep. Dave Camp, R-Mich., chairman of the Ways and Means Committee.
"This is a political stunt," said Rep. Chris Van Hollen of Maryland, senior Democrat on the Budget Committee.
For all the talk of crisis should Congress fail to raise the debt ceiling by Aug. 2, when the Treasury Department says it won't be able to meet all the government's obligations without further borrowing, the financial markets are likely to yawn at Tuesday's proceedings. "Wall Street is in on the joke," R. Bruce Josten, executive vice president of the U.S. Chamber of Commerce, said of this vote.
But beyond this week, Wall Street has reason to be nervous as the issue plays out, some warned. At some point short of actual default, said Rick Rieder, a managing director of BlackRock, the world's largest investment management firm, "you're going to run down the road where the rating agencies are going to have to react, the Fed is going to have to make a set of decisions, international investors are going to have to interpret what this means, and you could functionally have a self-fulfilling prophecy in terms of the risk while not actually having a default."
"That is such a dangerous path to go down," Rieder said.
http://www.statesman.com/news/nation/u-s-house-rejects-debt-limit-increase-without-1510730.html
THE NEW YORK TIMES
Published: 10:29 p.m. Tuesday, May 31, 2011
WASHINGTON — The U.S. House overwhelmingly rejected a measure Tuesday to increase the government's debt limit without requiring any spending cuts, a vote staged by GOP leaders to pressure President Barack Obama to agree to deep spending cuts.
The measure, defeated 318-97, was brought up by Republicans to show that there was little House support for raising the $14.3 trillion debt ceiling without concrete steps to rein in chronic budget deficits.
Voting against the measure were 236 Republicans and 82 Democrats. No Republicans — including Reps. Michael McCaul of Austin, John Carter of Round Rock and Lamar Smith of San Antonio — voted in favor. Democratic Rep. Lloyd Doggett of Austin declined to vote for or against the measure, instead voting only "present."
"I chose not to play along with their phony game," Doggett said.
The vote followed several acts of political theater on the House floor: Republicans brought up the measure and then urged its defeat, while Democrats — who not long ago were seeking just such a vote to raise the debt ceiling without attaching spending cuts — assailed Republicans for bringing it up, saying its certain defeat might unnerve the financial markets.
Just in case, GOP leaders scheduled the vote for after the stock market's close and had called Wall Street executives to assure them that the vote was just for show to make the point that Obama would have to make concessions in budget negotiations if any debt-limit increase is to pass.
"This vote, based on legislation I've introduced, will and must fail," said Rep. Dave Camp, R-Mich., chairman of the Ways and Means Committee.
"This is a political stunt," said Rep. Chris Van Hollen of Maryland, senior Democrat on the Budget Committee.
For all the talk of crisis should Congress fail to raise the debt ceiling by Aug. 2, when the Treasury Department says it won't be able to meet all the government's obligations without further borrowing, the financial markets are likely to yawn at Tuesday's proceedings. "Wall Street is in on the joke," R. Bruce Josten, executive vice president of the U.S. Chamber of Commerce, said of this vote.
But beyond this week, Wall Street has reason to be nervous as the issue plays out, some warned. At some point short of actual default, said Rick Rieder, a managing director of BlackRock, the world's largest investment management firm, "you're going to run down the road where the rating agencies are going to have to react, the Fed is going to have to make a set of decisions, international investors are going to have to interpret what this means, and you could functionally have a self-fulfilling prophecy in terms of the risk while not actually having a default."
"That is such a dangerous path to go down," Rieder said.
http://www.statesman.com/news/nation/u-s-house-rejects-debt-limit-increase-without-1510730.html