Less than 24 hours after Treasury Secretary Jack Lew announced Monday afternoon that the government must raise its $16.7 trillion debt ceiling by mid-October to continue operating, he was telling CNBC Tuesday morning how the administration would portray the GOP as irresponsible if an increase fails to materialize in the next month.
The White House refuses to “negotiate” on increasing the borrowing authority, saying that House Republicans should automatically agree to continue funding the government, said Lew. He says House Republicans would wreck the economy by using the debt ceiling to leverage talks on the budget and Obamacare.
“Congress has already authorized funding, committed us to make expenditures. We’re now in a place where the only question is, Will we pay the bills that the United States has incurred?” said Lew, implying an obvious answer.
His big claim was that a debt ceiling standoff would stunt all growth prospects. “We don’t need another crisis at the last minute,” Lew said.
The 2011 standoff over the debt ceiling did hurt growth and damaged public support for Republicans – but it also caused President Obama’s own favorability ratings to drop. - Read more at CNBC
WILL OBAMA MOVE MILITARILY IN SYRIA? The president is weighing a military strike against Syria to punish the Bashar al-Assad-led government for using chemical weapons against rebels. The strike would be of limited scope and duration, likely lasting no more than two days, and would involve sea-launched cruise missiles or long-range bombers. The Washington Post reports that the timing of the possible attack hinges on three factors: the completion of intelligence on the Syrian government’s involvement in last week’s chemical attack; ongoing consultation with U.S. allies, and Congress’s determination of a justification under international law. - Read more at The Washington Post
WALL STREET REACTS U.S. stocks plunged Monday after Secretary of State John Kerry said the White House will hold Syria’s government accountable for using chemical weapons. The S&P 500 fell 0.4 percent to 1,656.83, reversing an earlier gain of as much as 0.4 percent.
“If there’s going to be turmoil and then if there’s going to be some retaliation and affect U.S. assets, people get a little scared,” Frank Ingarra, head trader at Greenwich, Connecticut-based NorthCoast Asset Management LLC, told Bloomberg. “It’s a bit of a pullback so people are probably taking some risk off the table.” Read more at Bloomberg
OIL SURGES AMID TENSIONS Oil futures rose Tuesday, as the markets closely watchedthe conflict in Syria. October’s delivery of crude oil increased 95 cents or 0.9 percent to trade at $106.86 a barrel, erasing its 50-cent drop on Monday. - Read more at Business Insider
FISCAL CONFIDENCE STILL LOW (SURPRISE!) The Peterson Foundation’s August Fiscal Confidence Index shows that Americans’ confidence in the state of the economy remains low. Just 26 percent of voters say the country is headed in the right direction in terms of addressing the national debt, while 83 percent say lawmakers still have a lot of work to do, according to the latest index. “Congress is closing in on important fiscal deadlines, so time is short and the stakes are high,” said Michael A. Peterson, President and COO of the Peterson Foundation. “Rather than continued management-by-crisis, Congress should take this opportunity to boost economic growth and ensure our fiscal health by finally putting a sustainable long-term plan in place.” - See the results here