Tuesday, August 02, 2011

Senate Votes on Debt Ceiling at Noon, Downgrade May be Coming

The Senate will vote today at noon.
The debt ceiling bill is expected to handily pass and then Obama will sign it into law. Since today is the deadline, I imagine Obama will sign it quickly. Obama will speak at 12:15 pm ET (live stream). Tim Geithner, treasury secretary, says passing the bill on deadline might not be enough to prevent a credit downgrade, which many have been saying for a while. The republicans' choice to withhold their vote on the debt ceiling until they got what they wanted in spending cuts -- for a while Medicare and Social Security are spared -- caused a lot of damage to our economy. If this was a good bill, then that might be okay. But it's not. It's a sloppy bill -- that doesn't even do what it was supposed to do -- put together on the fly through a messy process. Thanks to the republicans, led around by their nose by the tea party, nations around the world have a new view of the U.S.
Treasury Secretary Timothy Geithner on Tuesday lamented the "spectacle" of the debt-ceiling debate and said he doesn't know whether the final deal will be enough to save the nation's triple-A credit rating.

"It's not my judgment to make," Geithner said of a possible downgrade. "I think this is a good result, but a terrible process."

The three major credit rating agencies — Moody's Investors Service, Standard & Poor's and Fitch — warned Congress that a credit downgrade could be forthcoming if the nation doesn't make sweeping budgetary changes to pare down the deficit. A downgrade to AA could rattle the markets and drive up interest rates for U.S. borrowing. The Hill
Throughout this process it's disconcerting to observe that a lot of people believe Obama makes the laws. Some people in this country don't realize that we have a law making body -- Congress (House of Representatives and Senate). Bills, which are intended to become laws, are introduced in either the House or the Senate. BOTH the House and Senate have to pass a bill, which then goes to the president for signature. Obama leads on issues and negotiates deals when Congress can't play nice, but the president only signs bills into law. Of course, the president can veto the bill, which means he kills it. Read a primer on How a bill becomes law.
Another thing, this bill is not a BUDGET. This is a bill to raise the debt ceiling (to pay our bills). Cutting spending was tagged on by the republicans who said they wouldn't raise the debt ceiling without also cutting spending.
Remember this:

The Senate passes the bill