“Does my colleague from Florida believe that the House of Representatives, dominated by Republicans, are going to raise the debt limit?” McCain asked Rubio.

The Senate and House have each passed a budget resolution. Now the chambers must agree to go to conference to bridge the gaps between the Democrat and Republican fiscal plans. Democratic leaders in the Senate must ask for unanimous consent to appoint conferees to the budget.

The list of Senators who have objected to these requests reads like a Tea-Party all-star lineup: Minority Leader Mitch McConnell of Kentucky and Sens. Cruz of Texas, Rubio of Florida, Pat Toomey of Pennsylvania, Mike Lee of Utah and Rand Paul of Kentucky have all objected to allowing conferees to the budget unless Democrats guarantee not to raise the debt limit or increase taxes.

“We’re talking about a minority within a minority,” McCain said today about his Tea Party-affiliated colleagues. In a rare moment of bipartisanship, he joined Democrats in lamenting that “we can’t go to conference unless we agree not to raise the debt limit.”

McCain ceded the floor after informing the chamber that “the majority of my colleagues on this side of the aisle” want to complete work on the budget.

“What we’re saying here on this side of the aisle is we don’t trust our colleagues on the other side of the Capitol who are in the majority,” he said.

Cruz responded quickly by saying, “Let me be clear: I don’t trust the Republicans and I don’t trust the Democrats,” in regards to handling the raising of the debt ceiling.

Rubio echoed Cruz, pointing out that America’s fiscal well-being “is not a trivial matter.” Republicans’ request to Democrats is not “some ridiculous thing,” he said.

“I’m not asking that the key lime pie be made the official pie of the United States,” Rubio said.

Only one Democratic senator added his voice to the floor fray: Illinois Sen. Dick Durbin interrupted to observe that members of the minority party “seem to be at odds.”

Original post is McCain, Tea Party Senators Squabble Over Budget Procedure by Political Capital.

Photograph by Justin Lane/EPA/Corbis

The National Debt Clock and an estimate of the Untied States’ national debt, as well as an estimate of each family’s share of that amount, on Dec. 31, 2012, in New York City.

That’s the U.S. debt ceiling as of Monday, according to the Treasury Department.

It’s the first number the Treasury has released since President Barack Obama signed a suspension of the limit in early February, Bloomberg’s Ian Katz and Kasia Klimasinska report. The ceiling was $16.394 trillion at the time and was suspended through May 18. It increased to account for deficits that accrued since February.

Treasury Secretary Jacob J. Lew said May 10 a one-time payment of $59.4 billion from Fannie Mae confirms that the U.S. won’t hit the cap until September.

He announced in a letter to lawmakers Monday new steps to keep the government running under the limit. The measures include a “debt-issuance suspension period” which frees up about $6.4 billion a month, Bloomberg’s Meera Louis reports.

The Treasury also can continue borrowing for several months by shifting money among government accounts.

Original post is Bloomberg by the Numbers: $16.699 Trillion by Political Capital.

Photograph by Andrew Harrer/Bloomberg

Senator Mitch McConnell, a Republican from Kentucky, on the Capitol.

Hero of the last minute bipartisan fiscal package, good cop to Vice President Joe Biden’s bad cop, Senate Minority Leader Mitch McConnell is insistent that he is sick and tired of being called in to bridge differences between the parties at the buzzer. Enough is enough.

This time around, as the nation slowly creeps towards a confluence of self-created fiscal crises (expiration of the continuing  resolution funding the government, sequestration, reaching the federal debt limit) the Kentucky Republican would like to “get back to regular order and that takes time. And that’s why we need to get started, right now.”

He took to the floor today to remind anyone within earshot that “Republicans have done their part. The budgets passed by House Republicans over the past couple of years contain fresh ideas that would help solve our fiscal crisis.”

The onus, according to the leader, is now on the Democrats.

McConnell joined the chorus of Republicans in both chambers pointing out that “President Obama and congressional Democrats still have yet to offer a serious plan to address the economic challenges we face. They’ve been content to wage political war instead.”

And don’t get the man started about tax increases – revenue generators that Democrats have been insistent on must be included in any budget grand bargain that impacts entitlements such as Social Security or Medicare.

“Let’s not waste time with more pointless arguments about tax increases, we had that debate already – it’s done – it’s over.”

Senate openers are opportunities for both party leaders to try new lines of attack and political rhetoric outlining legislative priorities.

This morning was no different, as the Republican leader closed his speech by reminding those on the other side of the aisle that it’s time to move on from political gamesmanship.

Acknowledging the new faces joining the majority in the Senate, McConnell congratulated the other party, saying, “Democrats were reelected and I congratulate them, it’s time now to get serious about actually governing.”

Original post is McConnell: ‘Time to Get Serious’ by Political Capital.

Photograph by Alex Wong/Getty Images

Secretary of Treasury Timothy Geithner arrives at the Capitol for meeting with congressional leaders on Nov. 29, 2012.

This is Treasury Secretary Tim Geithner’s last day at work, and he is leaving with an exit interview snared by Politico in which the veteran warrior of the fiscal cliff wars suggests Republicans have ceded the debt ceiling as a political weapon. And this, he says, is a good thing.

Geithner also rules out any idea of him succeeding Federal Reserve Chairman Ben Bernanke, serving his final year.

The move by House Republicans that cleared the House this week with a waiver until May of the federal debt ceiling points to fiscal negotiations less fraught with economic danger, the departing secretary tells Politico’s Ben White and Mike Allen.

Original post is Geithner: Republicans Cede Debt Lever by Political Capital.

Photograph by Daniel Acker/Bloomberg

The Capitol stands in the background as police monitor a checkpoint during the U.S. presidential inauguration in Washington.

The Obama administration is welcoming a move by House Republicans to vote tomorrow on raising the nation’s debt ceiling through mid-May as a “de-escalation” of the fiscal debate, White House press secretary Jay Carney says.

“The fact that House Republicans have made this decision is certainly something that we welcome,” Carney said at a briefing. It means they will “back away from the kind of brinkmanship” over the federal debt limit that creates uncertainty for companies and is harmful to the economy.

Carney said the administration still prefers a long-term extension of the nation’s debt ceiling. Still, President Barack Obama “would not stand in the way” if Congress passes the proposal.

The Treasury reached its statutory borrowing limit on Dec. 31 and is using “extraordinary” measures. Those measures will work only until mid-February to early March, Treasury Secretary Timothy Geithner said in a Jan. 14 letter to congressional leaders.

Under the House Republican plan, the government’s $16.4 trillion borrowing limit would be raised until May 19. The House suspension plan is accompanied by a caveat: Congress must adopt a budget resolution for the next fiscal year by April 15.

The debt limit has been raised periodically since its creation in 1917 during the presidency of Woodrow Wilson. Since 1960, Congress has raised or revised the limit 79 times, including 49 times under Republican presidents. The U.S. never has defaulted on its obligations.

Investors in U.S. Treasury bonds, who most directly bear the risk of a government default, haven’t shown alarm over the political fight in Washington. The 10-year yield was little changed at 1.84 percent at 11:39 a.m. New York time, according to Bloomberg Bond Trader prices.

See the full and updating report at Bloomberg.com. 

Original post is Obama Welcomes ‘De-escalation’ of Debt-Ceiling Debate: Off the Brink by Political Capital.

Photograph by Mario Tama/Getty Images

Singer Alicia Keys performs during the Public Inaugural Ball at the Walter E. Washington Convention Center on Jan. 21, 2013 in Washington.

Alicia Keys took the stage at the Inaugural Ball, playing piano for a ready crowd with a revised rendition of her “Girl on Fire:”

“Obama’s on Fire.”

“He’s the president, and he’s on fire,” Keys sang to a delighted audience. “He’s living in a world and it’s on fire… filled with catastrophe, but he knows he can’t fly away. He’s got both feet on the ground, and he’s burning it down.”

The president and first lady took the stage at 9:55 p.m. and danced to “Let’s Stay Together,” sung by Jennifer Hudson.

On this inaugural day for a second term, the first president elected twice with 51-percent-plus margins of victory since Republican Dwight Eisenhower’s re-election in 1956 was not only intent on keeping his electoral coalition together — with an address reciting the core beliefs of a progressive political agenda. He also was intent on firing up that base for a new round of debates with Congress over everything from immigration and climate change to entitlement spending and gun control.

“All fired up, ready to go,” chanted some of the diners at the post-inaugural luncheon in the Capitol.

“Our work begins today,” the president tweeted from church yesterday. “Let’s go. -bo”

Now comes the cold, clear daylight of a wintry day in Washington, where the House Ways and Means Committee is holding a hearing on the debt-ceiling increase that the president is seeking. The House’s Republicans are inclined to give him only a three-month extension.

Now comes the e-mail from Senate Republican Leader Mitch McConnell, warning supporters that Obama and his allies are “coming for your guns.”

“You and I are literally surrounded,” McConnell writes in an e-mail first reported by The Hill. “The gun-grabbers in the Senate are about to launch an all-out-assault on the Second Amendment. On your rights. On your freedom.”

McConnell campaign manager Jesse Benton spotlights three prongs of the new push for gun control following the shootings at Newtown, Connecticut. They include “the Feinstein Gun Ban,” California Sen. Dianne Feinstein’s legislation to ban assault weapons. “It is almost hard to believe the sheer breadth and brazenness of this attempt to gut our Constitution,” Benton writes.

Feinstein will roll out her legislation this week. Feinstein also will meet with Florida’s Republican Sen. Marco Rubio on the farm-worker provisions of a potential immigration bill. The opposition to any such reforms stands ready to pounce there as well.

The president may have fired up his base this week, yet the Republican ranks of McConnell’s forces in the Senate and House Speaker John Boehner’s fractured caucus in the House stand ready with a fire hose for much of what the White House will put forth.

Original post is ‘Obama’s on Fire:’ Alicia Keys — Boehner-McConnell Have Hoses by Political Capital.

Photograph by J. Scott Applewhite/AP Photo

Speaker of the House John Boehner heads into a closed-door strategy session with GOP members at the Capitol.

Updated at 2:25 pm EST

The fiscal year in Washington is yielding, it appears, to the political quarter.

House Republicans plan a vote next week on a three-month extension of U.S. borrowing authority, in an attempt to force the Democratic-run Senate to adopt a federal budget.

Members of Congress won’t be paid if a budget isn’t passed by the end of the proposed three-month extension, House Majority Leader Eric Cantor said today: “This is the first step to get on the right track, reduce our deficit and get focused on creating better living conditions.”

“We are going to pursue strategies that will obligate the Senate to finally join the House in confronting the government’s spending problem,” Speaker John Boehner said in a statement today at the end of his party’s private policy retreat at a resort near Williamsburg, Virginia. “The principle is simple: no budget, no pay.”

President Barack Obama is talking about another principle: The need for the U.S. to pay the expenses it already has incurred. He said this week, in his final press conference of his first term, that he will insist on a clean increase in the debt ceiling, no strings attached.

Still, the White House appeared to find some comfort today in what the Republicans aren’t talking about.

“We are encouraged that there are signs that Congressional Republicans may back off their insistence on holding our economy hostage to extract drastic cuts in Medicare, education and programs middle class families depend on,” White House Press Secretary Jay Carney said in a statement issued this afternoon. “Congress must pay its bills and pass a clean debt limit increase without further delay. And as he has said, the president remains committed to further reducing the deficit in a balanced way.”

The Treasury Department has said the U.S. will exceed its 16.4 trillion borrowing authority sometime from mid-February to early March. Republicans are seeking a legislative strategy to  meet fiscal deadlines that Congress faces in the next 90 days.

Those deadlines include the need to raise the debt ceiling. Congress will also confront in March the $110 billion in automatic spending cuts, half from defense, that were put off in the Jan. 1 tax deal. On March 27, a short-term measure that  funds government agencies will also lapse, creating another potential fight.

“You can’t get out of this without passing a budget,” Rep. Kevin McCarthy, a California Republican, said in an interview today with Bloomberg Television’s “Capitol Gains” program.

The last time the Senate adopted a budget was in April 2009. The Senate and House are supposed to pass budget resolutions early each year to set a spending framework, though there is no enforcement mechanism. Without a budget resolution, appropriations bills allocate money for the federal government.

The Republicans insist they aren’t playing for a brink.

“No one is talking about default, no one wants to default,” South Carolina Republican Rep. Mick Mulvaney, who voted against the 2011 debt-ceiling deal, said in an interview today with Bloomberg Television. There is a “lot of support growing” among the rank and file for a short-term debt limit, he said.

Although the debt limit has been periodically raised since its creation in 1917 — with Congress increasing or revising it 79 times, including 49 times under Republican presidents, since 1960 — Republicans are girding for a fight with Obama and Senate Democrats over tying an increase to spending reductions.

While talk of moving in three-month increments isn’t likely to instill a lot of confidence in Congress,  investors in U.S. Treasury bonds, who most directly bear the risk of a government default, haven’t shown alarm.

Yields on 10-year Treasury bonds, which ran above 5 percent in 2007,  have declined steadily. The yield fell four basis points, or 0.04 percentage point, to 1.84 percent at 12:43 p.m. in New York, according to Bloomberg Bond Trader pricing.

Roxana Tiron and Jim Rowley contributed.

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Original post is New House Fiscal Year: Three Months by Political Capital.

Photograph by Bill Clark/CQ-Roll Call/Getty Images

Rep. Paul Ryan, left, and Rep. Pete Sessions, right, arrives for a House Republican Conference meeting.

The House’s Republicans, assembled at a retreat outside Williamsburg, Virginia, are discussing the “virtues” of passing a short-term increase in the federal debt limit.

So says Rep. Paul Ryan, the House Budget Committee chairman from Wisconsin.

“We are discussing the possible virtues of a short-term debt-limit extension so that we have a better chance of getting the Senate and White House involved in the discussion,” Ryan told reporters outside the private meetings.

President Barack Obama is insisting on an increase with no strings attached.

It’s not like they’ve never done this before.

The debt limit has been periodically raised since its creation in 1917, when Congress and President Woodrow Wilson authorized the Treasury to issue long-term securities to help finance entry into World War I. Since 1960, Congress has raised or revised the limit 79 times, including 49 times under Republican presidents, according to the Treasury Department, noting the U.S. never has defaulted on its obligations.

The last time Congress fought over raising the ceiling, Obama signed an increase on Aug. 2, 2011, the day that Treasury warned U.S. borrowing authority would expire. Standard & Poor’s cut the nation’s credit rating.

The bond market yawned, and hasn’t stirred this time either.

Yields on 10-year Treasury bonds, a benchmark for everything from mortgages to corporate borrowing costs, are down from more than 5 percent in 2007, before the financial crisis of 2008. They are yielding under 2 percent today.

The nation has never defaulted on its debt, the Treasury Department says.

Obama insists it isn’t about to start now — as Republicans talk about only a short-term extension of the borrowing authority.

Jim Rowley and Roxana Tiron contributed from the Republican retreat. 

Original post is Ryan: Republicans Eye Short-Term Debt-Ceiling Increase at Retreat by Political Capital.

Photograph by Pablo Martinez Monsivais/AP Photo

House Speaker John Boehner (left) and President Barack Obama during their 2011 meetings about the debt ceiling and budgets.

Updated at 12:15 pm EST

President Barack delivered a stern warning today to congressional Republicans — make that the House — about the looming debate over raising the nation’s debt ceiling.

It’s not a question of permitting new spending, Obama said.

It’s a matter of “paying the bills” for commitments Congress already has made.

Any debate over not raising the limit, he said, is “absurd.” The potential damage to the economy of not meeting the next deadline for raising the limit (expected sometime in mid-February) is too costly to even consider, the president said today in his final planned news conference of his first term.

“The issue here is whether or not America pays its bills,” he said. “We are not a deadbeat nation.”

He also issed a warning about the potential tactics that House Republicans in particular are discussing, including demanding a new round of spending cuts attached to each incremental increase in the debt ceiling.

“They will not collect a ransom for not crashing the American economy,” Obama said.

Why should House Republicans take the warning seriously, Bloomberg’s Julianna Goldman asked at the press conference, considering the compromises the president has made in previous debt ceiling and fiscal debates.

“I said we weren’t going to extend Bush tax cuts for the wealthy, and we didn’t,”  Obama said, noting that the debate about balancing the federal budget going forward involves both tax revenue and spending cuts.

“If we’re going to do balanced deficit reduction, the only way to do it is in a balanced and responsible way,” he said.   “What I’ve said is that I’m happy to have a conversation about deficit reduction.”

Original post is Obama: No `Ransom’ for Debt Ceiling by Political Capital.

Photograph by Andrew Harrer/Bloomberg

U.S. President Barack Obama delivers the State of the Union address to a joint session of Congress at the Capitol in Washington, Jan. 24, 2012.

President Barack Obama was formally invited today to give this year’s State of the Union address on Feb. 12.

That is Abraham Lincoln’s birthday.

Obama will take his official oath of office for a second term on Jan. 20 on the Robinson family Bible, and then swear in at his inaugural address in front of the Capitol on Jan. 21 with the Abraham Lincoln and Martin Luther King Jr. Bibles.

The State of the Union is delivered to a joint session of Congress in the larger House chamber, and usually occurs in January. Obama’s address would be the first State of the Union delivered in February since former President George W. Bush spoke on Feb. 2, 2005.

House Speaker John Boehner, an Ohio Republican, sent out the invitation.

“Our nation continues to face immense challenges, and the American people expect us to work together in the new year to find meaningful solutions,” Boehner wrote. `This will require a willingness to seek common ground as well as presidential leadership. For that reason, the Congress and the Nation would welcome an opportunity to hear your plan and specific solutions for addressing America’s great challenges.”

As the president enters the chamber, he shakes hands with lawmakers in full view of the television cameras. Lawmakers are known to arrive hours before the address in hopes of snagging a coveted aisle seat and landing their 30 seconds of national TV time as they greet the president.

And the president, well, he will have a few words for the Congress as it debates the lifting of the federal debt ceiling and looming spending cuts that have been delayed in the New Year’s Day tax deal.

Original post is State of the Union: Debt Ceiling Here by Political Capital.