Late on Friday afternoon, Speaker of the House John Boehner finally achieved consensus among the House Republicans, and passed a deficit plan that awaits confirmation in the Senate, and with President Obama. After a two week long tet a tet between leaders in the legislative and Executive branches over the debt ceiling issue, it has taken until July 29th before a concrete plan in the House was viable enough to pass a vote by the members.
Now the question Americans are asking is, what will the Senate and President do with it?
Majority Leader Reid today set the wheels in motion for the Senate to begin consideration of the House bill, assuming it passes, or his own debt ceiling/deficit reduction plan.
Our understanding of the procedures in the Senate is pretty basic, but the bottom line seems to be that the soonest we would see any meaningful vote in the Senate would be shortly after midnight on Saturday (i.e. early Sunday morning.) It’s not clear to us whether that initial vote would be on some version of the House bill, Reid’s original proposal, or Reid’s proposal modified based on recommendations from Minority Leader McConnell. Without Republican input on the legislation, the odds of filibuster go up. People with more knowledge of the workings of the Senate than we have are looking for another procedural vote on Monday morning, and a final vote on some piece of legislation on Tuesday (August 2.)
Putting the logistics of the Senate aside, Reid is going to have to make some adjustments to his bill to get enough Republican support so that Republicans don’t block legislation through filibusters or other tactics.
Assuming Reid can get the Senate to pass some piece of legislation, some compromise will still have to be worked out with the House. If Speaker Boehner wants to be part of a compromise that prevents default, he’s going to have to shift gears in a major way. In the last couple of days, he’s been working overtime to get support for his bill from members of his own party. If he wants to push through compromise legislation, he’s going to have to court some Democrats, because he’ll surely lose Republican votes on any compromise with Democrats. – Nancy Vanden Houten of Stone McCarthy
Since the August 2nd deadline was far in advance of when both Houses of Congress began formulating plans, the issue quickly dissolved into one of political rhetoric and accusation. But as Congress entered into the final weekend before the projected date of ‘default’, the rhetoric changed into meaningful work, and it appears likely this bill, or a slightly adapted and modified version of the bill, will pass both houses and the onus will then shift to the President to sign it. Since the White House did not offer any legislation in the process over the past few weeks, it remains to be seen whether Obama will accept the bi-partisan bill should it make its way to his desk by Sunday or Monday.
Either way, a long-term slashing of government spending, coupled with a raising of the debt ceiling, will have both short and long term effects to the economy, and to the markets. It is still unkown whether Moody’s and Standard and Poor will follow through with their threats to downgrade the US, even with a rise in the debt ceiling, but to the American people, once the bill is passed and the printing presses commence issuing trillions of dollars in new debt, they can expect inflation in prices to rise substancially going forward.
With the House finally passing a deficit plan, and the Senate now having the ball in their court to accept, modify, or reject it over the weekend, America is watching the government closely as August 2nd moves ever closer to a compromise, or a default over the debt crisis.