After voting to repeal and replace Obamacare 60 times under the Obama administration, Senate Republicans, now that it counts, are locked in a heated civil war over how or if they should even modify the controversial legislation. As proven time and again, despite sharing a common party, conservative and moderate republicans have very little else in common.
So, while many may think that a repeat of the 16-day government shutdown in 2013 is unlikely while a single a party controls all three branches of government in Washington D. C., we suspect it may not be quite as simple as that. Without a budget in place that truly balances, conservative republicans will most likely be unwilling to approve debt ceiling increases no matter who is sitting in the White House.
While republicans have attempted to get ahead of the game by passing a debt ceiling increase well in advance of a breach, efforts so far have failed. And while it may seem far away, the U. S. government will reach its statutory limit on borrowing some time in October. So how will Mnuchin handle the Treasury Department if Republicans fail to act and Democrats refuse to play ball? Turns out Obama had a plan for that. Per Bloomberg:
When the nation almost breached its debt ceiling six years ago, the Federal Reserve and Treasury drew up contingency plans that were kept secret until January, when transcripts of an Aug. 1, 2011 conference call at the central bank were released after a customary five-year lag.
This post was published at Zero Hedge on Jul 14, 2017.