When Does Wall Street Cast Its Vote?

Oct 10, 2013 9:00am

By MICHAEL FALCONE (@michaelpfalcone)

NOTABLES

  • A GLIMMER OF A DEAL?: A House Republican leadership source says House GOP leaders are coalescing around a plan to provide a six-week extension of the debt limit – putting off the threat of default until early December and allowing time for negotiations on a broader budget agreement, ABC’s JONATHAN KARL reports. House Republican leaders will present this plan to the rank and file at a meeting of the entire House GOP conference this morning at 10am. This plan involves only raising the debt ceiling; it does not fund the government. Under this emerging plan, the government would remain shut down while negotiations proceed on a broader budget agreement. It is not clear how the White House will react. On one hand, the President said he would accept a short-term debt ceiling increase. On the other hand, he has said he would not negotiate until Republicans remove the threat of default and re-open the government.
  • TODAY AT THE WHITE HOUSE: President Obama continues to ramp up his personal engagement in the fight over the government shutdown and debt ceiling today, sitting down for private meetings with Senate Democrats and House Republicans. At 1:45 pm, the president meets with the Senate Democratic Caucus at the White House. Later, at 4:45 pm he sits down with the House Republican leadership, talking face-to-face with Speaker Boehner for the first time in over a week. The president invited all House Republicans to the White House, but Boehner is dispatching only a small team of 18 of his members to the meeting.  ”President Obama is disappointed that Speaker Boehner is preventing his members from coming to the White House,” Jay Carney said Wednesday. “The President thought it was important to talk directly with the members who forced this economic crisis on the country about how the shutdown and a failure to pay the country’s bills could devastate the economy.”

 

THE ROUNDTABLE

ABC’s RICK KLEIN: When does Wall Street cast its vote? Bipartisan meetings are nice, and new plans that depend on the other side budging certainly can’t hurt at this stage of a standoff. But there may be only one way to jolt the system: SELL. Conversations with Republican strategists in recent days suggest that only a major event, most likely in the form of a major southward turn in the markets, could shake things loose inside the GOP conference enough to push away from the current crises. That’s what will draw constituent phone calls, and what will turn anger into action – more so, certainly, than vague threats of primary challenges engineered by business interests. The markets could be the 12th man, and the players are weary enough that they may not be able to draw any inspiration from elsewhere in this stadium.

ABC’s JEFF ZELENY: One way out of the fiscal impasse could be a six-week extension of the debt ceiling that Paul Ryan is trying to rally support for. Yes, the plan would kick the proverbial can down the road, but only a short distance, giving both sides a bit more breathing room to reach a broader deal over spending, taxes and possibly Social Security reforms. But there are two distinct questions about this approach: Would President Obama buy it and, equally important, would the world financial markets flinch? It would seem to violate President Obama’s entrenched position of not negotiating, but it would also offer at least a short-term exit ramp to at least one Washington crisis. And it fits one of the capital’s urgent new acronyms: ABD–Anything But Default.

 

WHAT WE’RE WATCHING

ONE CONGRESSMAN’S EFFORTS TO END THE SHUTDOWN. At a time when compromise is hard to come by on Capitol Hill, Leonard Lance is part of a small contingent of Republicans in Congress trying to reach a deal that could break the impasse that has led to the government shutdown. “I don’t think this has been beneficial to any of us who serve on Capitol Hill, and I don’t think it’s been beneficial to the president down Pennsylvania Avenue at the White House,” Lance, R-N.J., told “The Fine Print’s” JEFF ZELENY of the ongoing shutdown. Lance who prefers to characterize himself as a “fiscal conservative” rather than “moderate,” is supporting a proposal to fund the government in exchange for the repeal of a provision in the Affordable Care Act that taxes medical devices. “I have supported a proposal by Rep. Ron Kind, D-Wis., and Rep. Charlie Dent, R-Pa., to fund government and to repeal the medical device tax, which I think is an eminently sensible proposal,” he said. http://yhoo.it/1flxoKN

–ABC’S ABBY PHILLIP SPENT MORE THAN NINE HOURS WITH LANCE during a typical shutdown day, following the lawmaker as he met with constituents his staff and otherwise tried to keep the wheels of Congress moving during the shutdown. Here’s a day-in-the life of a congressman during the shutdown: http://abcn.ws/1aaUEnv

 

BUZZ

FOR GOD’S SAKE: SENATE CHAPLAIN PRAYS TO END SHUTDOWN ‘MADNESS’. Each day of the government shutdown, senators have listened to the prayers of Senate Chaplain Barry Black guiding them to act responsibly to reopen the federal government, ABC’s ARLETTE SAENZ reports. From urging Congress to pay Capitol Police to restoring the benefits afforded to military families who have lost loved ones on the battlefield, Black, a retired rear admiral in the Navy, has tailored his daily prayers to fit the issues consuming Congress during the government shutdown. “Save us from the madness,” Black prayed on day three of the government shutdown. Here’s a video compilation of his daily prayers since the government closed: http://abcn.ws/15q4gML

DEBT DEFAULT DEADLINE DEBATED AS DATE LOOMS. It’s a dire warning that has reverberated across the country:  unless Congress raises the debt limit in exactly seven days, the U.S. economy will head off a cliff.   The Oct. 17 deadline is the cornerstone of President Obama’s argument that lawmakers must act immediately, without delay. Administration officials and independent economists have warned that failure to meet the deadline could trigger economic shock waves, sending the dollar downhill, causing interest rates to soar and freezing credit markets across the globe.  It could thrust the U.S. into a recession worse than 2008, some officials say. But, as ABC’s DEVIN DWYER reports, truth be told, the exact date and time when the U.S. would experience its first-ever default — and set into motion a projected economic catastrophe — remains uncertain. The nonpartisan Congressional Budget Office has indicated the date the country can no longer pay its bills may not hit until at least Oct. 22, while some Republicans have suggested that the real date is closer to Nov. 1. Treasury Secretary Jack Lew has said that the nation would exhaust its borrowing authority, or ability to acquire new debt, on Oct. 17 but implied that actual default wouldn’t hit until sometime later.  Lew says that on Oct. 17 the government would still have roughly $30 billion cash on hand and continue to collect unspecified daily tax receipts in the ensuing days. The remaining funds could be expended in a single day or several, administration officials and some economists say, depending upon a number of untested scenarios involving the financial markets. http://abcn.ws/GQBM5o

BARE HOUSE MAJORITY INCHES UP FOR ‘CLEAN’ GOVERNMENT FUNDING. No matter how many times President Obama calls for an up-or-down vote, Speaker John Boehner won’t budge on the math, insisting since his Sunday morning appearance on ABC’s “This Week” that “there are not the votes in the House to pass a clean CR.” Three days later, however, it looks like he still might be wrong, though just barely. ABC’s SHUSHANNAH WALSHE and ALEX LAZAR note that at least 219 members (up from 218 Tuesday) say they would support a “clean” measure to extend all government funding without other conditions attached, such as defunding or delaying the president’s health care law; 217 of the 432 members is the threshold needed to pass the measure.  http://abcn.ws/19huH6Q

PENTAGON, CONGRESS VOW TO RESTORE MILITARY DEATH BENEFIT DESPITE SHUTDOWN. The Pentagon and lawmakers on Capitol Hill pledged to restore promptly the military death benefits that the government shutdown has cut off from families, as the remains of four U.S. soldiers arrived yesterday at Dover Air Force Base. The shutdown has put a stop to the $100,000 check military families receive when a loved one dies in uniform, the result of the more than week-old standoff in Washington that members of both parties and President Obama have denounced. The number of families not receiving the death benefit has risen to 26 since the beginning of the shutdown Oct. 1, including the families of service members who died in Afghanistan. Defense Secretary Chuck Hagel yesterday said the death gratuity would be restored, thanks to funds from a private foundation. “I am pleased to announce that the Department of Defense is entering into an agreement with the Fisher House Foundation that will allow the federal government to provide the family members of fallen service members with the full set of benefits they have been promised, including a $100,000 death gratuity payment,” Hagel said in a statement. “I am offended, outraged, and embarrassed that the government shutdown had prevented the Department of Defense from fulfilling this most sacred responsibility in a timely manner.” Meanwhile, on Capitol Hill, the House voted unanimously to restore the death gratuity to families of the fallen. The vote passed 425-0 with 228 Republicans and 197 Democrats supporting it. http://abcn.ws/19l24Ys

SHINSEKI WARNS CONGRESS MILLIONS OF VA CHECKS MAY NOT GO OUT IF SHUTDOWN CONTINUES. Veterans Affairs Secretary Eric Shinseki warned Congress yesterda that unless the government shutdown ends, his department will be unable to send out 5.18 million checks on Nov. 1.  That’s about $6 billion in payments that won’t be able to go out because there won’t be enough funds to send out the checks to beneficiaries, ABC’s LUIS MARTINEZ notes. “I will not be able to pay all these beneficiaries,” Shinseki told the House Veterans Affairs Committee. And if the shutdown continues on Nov. 1, “I will not be sending checks out.” If the shutdown continues through late October, 3.8 million veterans will not receive disability checks, including thousands rated as 100 percent disabled, according to Shinseki’s written testimony. Payments would also stop for more than 364,000 survivors and more than 1,200 children with birth defects who receive special benefits, according to his testimony. Pension payments would also cease for almost 315,000 veterans and more than 202,000 surviving spouses and dependents. Shinseki also said that the efforts to eliminate the backlog in applications for VA benefits “has stalled” and that the backlog is once again increasing. http://abcn.ws/1hCGNdM

IN DC, CHRISTIE CHIDES LAWMAKERS: ‘YOUR JOB IS TO RUN THE GOVERNMENT’. New Jersey Gov. Chris Christie weighed in on the budget impasse on Capitol Hill on Wednesday when he was asked by a reporter if a government shutdown and debt limit crisis would hurt the economy, ABC’s ARLETTE SAENZ notes. “I don’t think it’s ever good to keep the government closed when your job is to run the government,” Christie told reporters. Over the past week, Christie has briefly touched on the government shutdown, saying he believes it’s the responsibility of the president to lead the charge in solving the crisis. “My approach would be, as the executive, is to call in the leaders of the Congress, the legislature, whatever you’re dealing with and say that we’re not leaving this room until we fix this problem. Because I’m the boss, I’m in charge,” Christie said at an event the day before the shutdown. “When you’re the executive, if you’re waiting for leadership from the legislative branch of government, whether you’re a governor or whether you’re the president, or whether you’re the mayor, you are going to be waiting forever, forever because they’re not built to lead and take risks.” Christie was on Capitol Hill to meet with Sen. Jeff Chiesa, R-N.J., whom he appointed to the New Jersey Senate seat after the death of Sen. Frank Lautenberg, D-N.J. But Christie decided to stop for an unplanned “courtesy visit” with a group of GOP senators, which included Senate Minority Leader Mitch McConnell, Sen. John Cornyn (R-Texas) and Sen. John Thune (R-S.D.). http://abcn.ws/1cwS812

INSIDE THE GOP’S TAKE-NO-PRISONERS STRATEGY BEHIND THE SHUTDOWN. Republicans in Congress may be looking for other ways to extract concessions from Democrats  to restore funding to the government, but one of the most influential conservative groups has made it clear that anything less than defunding President Obama’s health care law is unacceptable, ABC’s ABBY PHILLIP reports. “The only acceptable way out of this is some sort of deal that funds the federal government without funding Obamacare,” said Michael Needham, CEO of Heritage Action, at a breakfast sponsored by The Christian Science Monitor. Needham said that no Keystone pipeline deal, individual mandate delay or tax reform compromise would satisfy the party’s base. Repeal the medical device tax in exchange for funding the government? A “laughable suggestion,” Needham said. Heritage Action, an arm of the  Heritage Foundation, has been one of the principal Republican think tanks helping to amplify the grassroots Tea Party message that demanded a fight over the Affordable Care Act during Congress’ August recess. http://abcn.ws/19l85nZ

YELLEN’S CONFIRMATION PROSPECTS LOOK BRIGHT, THOUGH QUESTIONS LINGER FOR GOP. Janet Yellen, the first woman to be nominated to lead the Federal Reserve, is receiving early praise from Democrats and is likely to face a far smoother Senate confirmation than Lawrence Summers, the man who was widely seen as President Obama’s top choice to lead the central bank. Several key Democratic senators, along with others who have worked professionally with Yellen in the past, are voicing their vast admiration, if not outright support, for her confirmation, ABC’s ALEX LAZAR notes. The early accolades suggest a far warmer welcome than the one that greeted Summers, who ultimately dropped out of the running amid tough questions from Democrats on his views of financial regulation and his ability to work well with others. While it’s no guarantee that Yellen won’t face unexpected obstacles during the course of her confirmation process, Democrats will likely push for a quick vote. http://abcn.ws/1gsHdFU

 

IN THE NOTE’S INBOX

–THE LAW AND ECONOMICS CENTER AT GEORGE MASON SCHOOL OF LAW is hosting a livestream discussion today on the topic of increased competition among online platforms. Or in plain English – what happens now that Google, Facebook, Instagram and others are all fighting for the same space. With most major platforms going public, how these platforms vie for our attention will change both our lives and their business a dynamic analyzed by an impressive lineup of panelists from law an industry. Starts at 9 a.m. ET: http://goo.gl/pf38DJ

 

WHO’S TWEETING?

@WilliamsJon: Big week for #Malala: her book published, #Nobel decision tomorrow & today won Europe’s top human rights prize, Sakharov award. #unbreakable

@WSJpolitics: The GOP is pushing back against tea party forces. One 2014 primary target: Rep. Justin Amash. http://on.wsj.com/16SeEA6  via @wsj @NKingofDC

@thegarance: 25 Other Senior Government Jobs Never Held by a Woman http://nym.ag/19zA2u8  via @Intelligencer

@AnnieLowrey: Reading bt the lines of Lew’s testimony, it seems Treasury *might* pull the plug on one or more payment systems in the event of a breach.

@anthonyweiner: So if GOP has dropped Obamacare demand, does that mean that Ted Cruz’ 15 minutes as leader of the party are over? #LostFirstPrimary

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