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Debt Limit Default Could Cost California More Than 840,000 Jobs: Analysts

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With the debt limit debate raging in Washington, D.C., some experts are projecting significant impacts on regional economies if no deal is reached before the June 1 deadline, with more workers in California expected to lose their job than in any other state if the breach is prolonged, according to a recently released report from Moody’s Analytics.

“The timing could not be worse for the economy; even without the specter of a debt limit breach many CEOs and economists believe a recession is dead ahead,” the authors wrote.

Based on a summary report released by the White House on May 3 detailing various debt ceiling scenarios, the Biden administration agrees with the dim assessment.

“An actual breach of the U.S. debt ceiling would likely cause severe damage to the U.S. economy,” the report declared.

If default occurs, and the debt breach cannot be resolved within a week, analysts expect California to be the hardest hit of all states by number of jobs lost totaling more than 840,000, with Texas’s 562,000 a distant second. (Read more from “Debt Limit Default Could Cost California More Than 840,000 Jobs: Analysts” HERE)

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House GOP Leaders Propose Linking Debt Limit to Military Pensions

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Photo Credit: APRepublican leaders in the U.S. House of Representatives will seek to make a 13-month extension of the federal debt limit conditional on the repeal of a planned cut in military pension benefits, lawmakers said on Monday.

Republicans were gauging support for the plan in anticipation of a Wednesday House vote that would extend the U.S. Treasury’s authority to borrow through March 2015. The Treasury has said a cash crunch could start after Feb. 27, when it expects to exhaust any remaining borrowing capacity.

The proposal from U.S. House Speaker John Boehner came after weeks of internal party struggle. It is not the “clean” debt limit increase sought by President Barack Obama, but falls far short of past Republican demands for deep spending cuts that have provoked political standoffs and a partial government shutdown last October that rattled financial markets.

But passage of the House leadership plan will likely need Democratic support after a number of Republican lawmakers expressed skepticism about the cost of the proposal.

Members of both parties have shown support for canceling the 1 percent reduction in cost-of-living increases for non-disabled military retirees of working age that was approved only in December. Earlier on Monday, the U.S. Senate voted 94-0 to advance a similar measure past a procedural hurdle.

Read more from this story HERE.

Jack Lew: Congress Accepts White House Debt-Limit Deadline

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Photo Credit: AP/Manuel Balce Ceneta

Photo Credit: AP/Manuel Balce Ceneta

Treasury Secretary Jack Lew said lawmakers had accepted the administration’s deadline for raising the nation’s debt ceiling and that he expected Congress to act before Feb. 7.

“They need to act in that window,” Lew said of Congress, warning that “extraordinary measures” he was employing to avoid a default would run out next month.

He added that while there had been some confusion among lawmakers about when the Treasury would hit its borrowing limit, that had now been resolved.

“I think they’ve accepted the deadline,” the secretary told reporters aboard Air Force One, as he accompanies President Obama to an event in Pittsburgh, where they will tout new “MyRA” retirement accounts announced in Tuesday’s State of the Union speech.

In a letter to Congress last week, Lew said he would no longer be able to take steps to avoid a default by the end of February and told lawmakers they needed to act earlier in the month to provide a cushion. The revised date pushed up the deadline, which Lew had initially projected to fall in early March.

Read more from this story HERE.

McConnell: We Won’t Treat Debt Limit Bill ‘Like Some Kind of Motherhood Resolution’ (+video)

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Photo Credit: AP

Photo Credit: AP

Senate Republican leader Mitch McConnell (R-Ky.) says Republicans will not give President Obama the unconditional debt-limit bill he wants:

“I think for the president to ask for a clean debt ceiling, when we have a debt the size of our economy, is irresponsible. So we ought to discuss adding something to his request to raise the debt ceiling that does something about the debt — or it produces at least something positive for our country,” McConnell told “Fox News Sunday.”

McConnell said President Obama is “unreasonable” to suggest that Congress treat his debt ceiling request “like some kind of motherhood resolution” that everyone would approve unconditionally.

He said a Keystone pipeline measure is “a good example” of something that could be attached to debt limit legislation because it would create jobs for the American people.

“The House of Representatives will initiate the discussion on the debt ceiling increase; they probably will have other ideas.”

Read more from this story HERE.

U.S. Faces Mid-October Deadline to Raise Debt Limit

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debtBut there’s no guarantee — mainly because of partisan disagreement about whether to continue the automatic spending cuts known as the sequester that are slicing defense and domestic agency budgets.

Republicans favor restoring funding to the Pentagon while cutting domestic programs even more deeply. But Democrats want to roll back the automatic defense and non-defense cuts — in part through alternative spending reductions and tax increases on the wealthy.

Although Democrats say they are happy to debate how to fund the government, they add that they won’t negotiate over the separate issue of the debt ceiling.

Rep. Chris Van Hollen (Md.), the ranking Democrat on the House Budget Committee, said Republicans ought not put the nation’s creditworthiness at risk by demanding concessions in return for raising the debt limit.

“I don’t think the American public is going to stand for playing with what remains an economic weapon,” he said. “Playing around with the debt ceiling will create unnecessary economic harm.”

Read more from this story HERE.

John McCain Tears Into Mike Lee on Senate Floor, Lee Responds (+videos)

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Photo Credit: YouTubeSen. John McCain provides yet another reason why many feel the “old bull” should be put out to pasture when he tore into fellow Republican Sen. Mike Lee on the Senate floor Thursday over Lee’s objection to negotiate the debt limit increase as part of the budget resolution.

“Perhaps the senator from Utah doesn’t know about that — the fact that even if they did raise the debt limit, it could not become law because it doesn’t go to the president of the United States,” McCain said.

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Lew Asks Congress for Debt Increase, Says it’s ‘Not Open to Debate’

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Treasury Secretary Jack Lew on Friday urged congressional leaders to raise the debt limit and insisted that the White House is not going to negotiate over the increase because lawmakers have “no choice.”

“We will not negotiate over the debt limit,” Lew wrote. “The creditworthiness of the United States is non-negotiable. The question of whether the country must pay obligations it has already incurred is not open to debate.”

Lew said that while President Obama is willing to discuss plans to reduce the nation’s deficit with Congress, those talks must be kept separate from any effort to raise the nation’s debt cap.

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Senate Passes Bill to Suspend Debt Ceiling

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Photo Credit: cliff1066â„¢The Senate on Thursday approved legislation that prevents the U.S. from hitting its debt limit until May 19, sending the legislation to President Obama.

In a 64-34 vote, the Senate gave its blessing to a House bill that suspends the debt ceiling until May 19, when the Treasury Department will need to use “extraordinary measures” to keep paying the nation’s bills.

Republican Sens. Kelly Ayotte (N.H.), Roy Blunt (Mo.), Thad Cochran (Miss.), Susan Collins (Maine), Lindsey Graham (S.C.), Dean Heller (Nev.), John Hoeven (N.D.), Lisa Murkowski (Alaska), Richard Shelby (Ala.), John Thune (S.D.) and Roger Wicker (Miss.) voted with the Democratic caucus to pass the legislation. Two Democrats — Sens. John Kerry (Mass.) and Patty Murray (Wash.) — missed the vote.

The bill allows Treasury to borrow what ever sum is necessary to keep the U.S. from going over the debt ceiling until May 19. Unless Congress acts again, Treasury on that date will add what ever it has spent to the nation’s current $16.4 trillion ceiling.

Read more on this story HERE.

Both Sides Hardening in Debt-Limit Imbroglio

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The gulf between President Obama and a divided Congress grows ever wider as the debt-limit crisis stumbles toward a potentially catastrophic deadline.

Tempers flared Wednesday at the high-level negotiating session, with Obama walking out of the meeting at one point, angrily warning House Majority Leader Eric Cantor, “Don’t call my bluff. You know I’m going to take this to the American people.”

But apparently the president, who thinks he can tax his way out of this mess, is unaware that Americans are strongly behind Cantor and the Republicans on the issue of tax increases versus spending cuts.

The Gallup Poll reported Thursday that when people are asked how Congress should deal with the mountain of deficits and debt that threaten to sandbag our economy, 50 percent “prefer spending cuts to tax hikes.”

The nationwide poll showed 20 percent saying the debt should be dealt with only through spending cuts, while another 30 percent said “mostly spending cuts.”

Read More at Townhall by Donald Lambro, Townall