Zero Hedge
0
All posts from Zero Hedge
Zero Hedge in Zero Hedge,

Boehner On Debt Ceiling Deal: Process "Stinks" But Alternative Was Default

When we presented America's new debt ceiling of $19.6 trillion lasting through March 2017 last week...

 

... some took offense saying a debt ceiling deal is nowhere near done, and that the conservatives would at least put up a token fight. A few days later, the deal is virtually complete, the Freedom Caucus has been isolated, Paul Ryan never even got his hands dirty, and Boehner has caved one last time corporate/democratic prerogatives, precisely as we said would happen.

Yes, the republicans will pretend to demand concessions, such as a balanced budet and other "sound money" conditions but they won't get them because the corporations pulling the strings of every D.C. politicians are the biggest beneficiaries from US debt-funded largesse, especially if one throws in the occasional contained or not so contained war.

 

This means another victory for the Demorats who have required a "clean" debt raise. This is precisely what they will get, and why it will have to take place under John Boehner as Paul Ryan would surely tarnish his reputation with the Freedom Caucus if his first act is one seen as submission to the left.

 

Which means that the only certain outcome from the melodramatic debt ceiling fight over the next several days, is the following: the US is about to have a brand spanking new debt ceiling, one that should last it until March of 2017: $19,600,000,000,000.

Today, as expected, we got the deal under precisely the conditions we envisioned. The WSJ reported:

The White House and congressional leaders reached a tentative deal Monday on a two-year budget plan that also would raise the federal debt limit.

 

If approved by Congress, the broad pact would allow House Speaker John Boehner (R., Ohio) to resolve two of the thorniest fiscal hurdles before he resigns later this week. If it fails, it could leave the U.S. government a week away from potentially being unable to pay all its bills.

 

The plan is designed to remove the risk that the government might default and diminish the prospect of a partial government shutdown in December. It would suspend the debt limit through mid-March 2017 and boost spending by $80 billion through September 2017. Lawmakers still would need to pass detailed spending bills by December, likely in one combined measure.

 

For it to pass the House, the pact will need to quickly win backing from most Democrats and at least a few dozen Republicans who have frequently balked at spending and debt-ceiling bills they say don’t do enough to shrink the budget deficit.

In other words, a "deal" that the majority of the GOP will likely reject, and one which Boehner will ram down the public of the republican party just because.

The deal, which further includes the selling of 58 million barrels of oil from the US SPR for no clear reason - such a sale will only generate $2.5 billion in proceeds - will pass. After all, Congress' personal financial backers, US corporations and Wall Street demand it.

Which leaves us only with the post-mortem soundbites, such as this one moments from from John Boehner.

  • BOEHNER SAYS AGREES WITH RYAN THAT PROCESS THAT PRODUCED BUDGET DEAL "STINKS"; BUT ALTERNATIVE WAS CLEAN DEBT CEILING HIKE OR DEFAULT
  • BOEHNER SAYS THERE IS NO REASON WHY ANY REPUBLICAN MEMBERS OF CONGRESS SHOULD VOTE AGAINST BUDGET DEAL

And as Boehner's last act, he now has the honor of telling the US public that its latest and greatest debt target has just been increased to just shy of $20 trillion, a number that will be reached in about 14-16 months (depending on how many more wars the US will start in the interim). Because when it comes to spending like drunken sailors, there really is zero difference between republicans and democrats.