US debt limit bill gives political cover to both parties
for them to engage Democrats, including Obama, in deficit reduction negotiations, their track record is not promising.
"I don't think it (the House debt limit bill) has much to do with deficit reduction at all," said Robert Bixby, executive director of the non-partisan Concord Coalition, a budget reform advocacy group. "It's a way of defusing a political crisis."
"Our base case remains a series of endless cliffs," Chris Krueger of the financial services firm Guggenheim Partners wrote in a note. "Short-term extensions of these cliffs could result in an endless game of kick the can - until the can kicks back."
As for deficit reduction, he wrote: "Don't hold your breath, though hope springs eternal."
Ethan Harris of Bank of America Merrill Lynch said, "It is another example of where politicians' bark seems worse than their bite."
Welcome to the latest chapter in a two-year battle between Obama and congressional Republicans over how the world's largest economy can gain control of a $16.4 trillion national debt.
There was the 2010 presidential commission to find budget solutions, a 2011 congressional "super committee" that was supposed to put the government on a sound fiscal path and a "fiscal cliff" of late 2012 designed to force big decisions.
All sputtered.
Now, Republicans have crafted a debt limit increase without setting a specific new ceiling on borrowing that they could be blamed for.
In a tough-looking move, their legislation aims to withhold lawmakers' pay if the Senate or House fail to produce a non-binding budget plan this year. Some lawmakers argue that
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