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Home / US / Pelosi and Mnuchin have phoned, a possible indication that there is a problem with the debt limit

Pelosi and Mnuchin have phoned, a possible indication that there is a problem with the debt limit



The Speaker of the House does not speak with the Minister of Finance on a Saturday night, then sends him a letter and then a press release, unless this is urgently needed.

But that's exactly what happened on Saturday night.

This is Washington's second popular semiannual acrobatic regime: a struggle to raise the debt ceiling. Washington's most popular exploit is a struggle for government funding. The latter will come in less than two months. The former is here now – a little earlier than anyone thought.

Speaker of the House Nancy Pelosi (D-CA) and Finance Minister Steve Mnuchin have recently become phonefriends. They've set fire to the wires more than teenagers who sing "Telephone Hour" in Bye Bye Birdie.

Pelosi seems to prefer to work with Mnuchin on this matter ̵

1; by phone.

EVERYTHING YOU NEED TO KNOW ABOUT THE DEBIT CEILING Chief of Staff Mick Mulvaney. Several congressional sources report to Fox that Mulvaney infuriated Democrats during Capitol Hill's recent two-chamber, cross-party, debt-ceiling meeting. Three weeks ago, a much-excited Pelosi told reporters that she refused to "waste time" when Mulvaney described her remarks in the session. She also said that Mulvaney had "no credibility" regarding the debt ceiling.

However, Mulvaney seems to be the administrative official most likely to agree with President Trump's identity. Therefore, legislators ignore Mulvaney – and Mr. Trump's impulses – at their peril. However, Pelosi apparently prefers the phone to engage Mnuchin. And maybe that's also the case with Mnuchin when it comes to the discourse with Pelosi. There is a reason why Ambrose Bierce called the phone "an invention of the devil" that overrides some of the benefits of keeping the unpleasant away.

As for communication between Pelosi and Mnuchin:

The duo spoke last Wednesday night about an urgent need to raise the debt ceiling.

Pelosi and Mnuchin talked twice last Thursday. They spoke on Friday afternoon. Then the duo chatted 12 minutes on Saturday night.

Mnuchin warns that Pelosi's debt ceiling may be exceeded in the next few weeks through September.

Mnuchin sent Pelosi a letter underlining the need to raise the debt ceiling. The spokeswoman responded on Saturday evening with her own letter to the Minister of Finance.

The nation's leaders never talk so often and, especially on a Saturday night, they connect with others unless there's a problem.

The problem is that voting to increase the debt limit is one of the most burdensome polls lawmakers can make. The problem is that nobody wants to vote to allow more debt. However, the problem is that Congress must soon raise the debt threshold or risk a downgrade of the nation's credit, confuse the stock market, or trigger a shock on the bond market. [194559004] The problem is that Mnuchin pleads with Congress to raise the debt ceiling immediately – before lawmakers leave Washington for most of August and the traditional summer break. That's because until a few days ago in Washington, only a few people have dealt with this topic. At this point, Mnuchin suggested that the government "run out of money in early September before Congress reassembles." The government's reserves will soon sink to around $ 250 billion. The accelerated schedule is partly due to lower revenues due to the new tax law.

One could see a signal that the public purse has dried up recently: the yield on short-term Treasury bills. The yield on a Treasury note due in mid-September is now higher than the Treasury note due in mid-August. Nor do people invest in short-term government bonds – another sign of potential difficulties.

If Congress and the Trump administration fail to act soon, federal liquidity reserves may decline and the government may struggle to meet its liquidity needs.

] With a letter on a Saturday night, Pelosi tries to raise an alarm and stresses to the legislator the need for a rapid increase in the debt ceiling.

The official Washington has long known that the debt ceiling must be raised. The sides discussed months ago to conclude a two-year agreement on spending limits and to mix them with the debt limit. Already in May, Senate Majority Leader Mitch McConnell (R-KY) had suggested that an agreement could be reached within a few hours.

But then the talks melted.

Pelosi insisted in her letter to Mnuchin on Saturday night The sides reached an agreement on "spending priorities". This is an indication of the blocked efforts to lift the mandatory spending limits imposed by Congress under a 2011 package to raise the debt ceiling. In Washington, the ceilings are commonly referred to as "sequestration". The sequestration hits the defense particularly hard as the Pentagon has the largest amount of money that Congress spends each year. President Trump wants more for the defense. Democrats are ready to bow down a bit. That's why Pelosi is pushing for "parity". In other words, Pelosi also calls for a parallel increase in funding for all non-defense programs.

Just a few days ago, a senior congressional source told Fox that it looked like the sides might have to agree to a short-term extension of the debt ceiling. From a technical point of view, the problem of the expenditure ceiling does not have to be resolved until mid-January. But Pelosi is coupling these problems now.

In the meantime, many Republicans in Congress do not want to simply raise the debt ceiling, unless it's related to something. Even if the problem of the debt ceiling is not addressed, this threatens the market or the ability of the federal government to borrow. That's why some people on the GOP side were hoping for an upcoming caps deal. Failure to limit the increase in the debt ceiling to a caps agreement could be a problem for some Republicans in the Senate.

This led to some discussions about billing the debt ceiling increase to fund health insurance for first responders on 9/11. The house has approved the plan 402-12 on Friday. McConnell promised to tackle the problem in the coming weeks. On Friday afternoon, when leaving the Capitol, the proponent of Sept. 11, Jon Stewart, explicitly advocated that Scotch record the bill for September 11th in a different way or vice versa. But when it comes to legislation, you will not get style points.

And so everyone in Washington has a problem without much time to solve it. It is possible that Congress will block part of the August break if something does not come together quickly.

Expect more calls between Pelosi and Mnuchin.

Raising the debt ceiling is a monumental task of Congress. And while politics may negotiate this by phone, overstepping the debt ceiling is such an important issue that you can not just call.


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