Bond market braces for final debt-ceiling fight

Adjust Comment Print

Trump now appears to be hoping that the urgent need for hurricane money can help get the GOP out of this mess - that pairing the debt limit increase with Harvey aid will prove a popular measure that enough Republicans can support.

Bitter divisions among Republican Party lawmakers and President Donald Trump's unpredictability could rule out a deal to raise the United States debt limit before an October deadline, several lobbyists representing dozens of bankers, investors and credit rating agencies, told Reuters.

U.S. Treasury Secretary Steve Mnuchin said on Sunday that he would put together a package of new sanctions to potentially cut off all trade with North Korea after Pyongyang conducted its sixth and most powerful nuclear test.

Some House conservatives have said directly pairing Harvey aid with an increase in the debt limit would be a "terrible idea" that sends the wrong message on overall government spending.

"That's our priority", Mnuchin said on Fox News Sunday.

The White House disaster aid request includes $7.4 billion for the Federal Emergency Management Agency and $450 million for the Small Business Administration.

Comcast's Cohen: Congress should end FCC's 'Groundhog Day' on net neutrality
The Federal Communications Commission asked for comments on a proposal to kill Obama-era net neutrality rules - and got an earful. In short, the company has opposed " Paid Prioritization " as it may lead to the creation of paid fast lanes on the Internet.

The U.S. government has a statutory limit on how much money it can borrow to cover the budget deficit that results from Washington spending more than it collects in taxes.

Goldman Sachs, an American financial services company, estimated that failure to raise the ceiling would force a government spending cut equal to between 3 and 4 percent of U.S. gross domestic product, which would have crippling economic consequences. We need to make sure that we can get to Texas the appropriate amount of money to rebuild the state. In the wake of Hurricane Harvey, however, Mnuchin told CNBC on Thursday that the deadline could move up a few days. "(But) I would say the president and my first objective right now is for the people of Texas and make sure we get the funding to do that".

Lawmakers and economists from both parties agree that the debt ceiling should be raised and warn that failing to do would mean a default on the nation's debt, which could cause global economic chaos.

Mnuchin's spending-debt ceiling pitch resulted in a quick and favorable response from Congress's top two Democratic leaders.

Members of US Congress return from summer recess Tuesday with the eyes of bond traders squarely upon them.

Sen. Roy Blunt (R-Mo.) said on NBC News' "Meet the Press" that Harvey funds will "likely" be combined with a larger bill, but he said indicate what it will be.