Congress typically runs up the deficit under the assumption that some future Congress will bring it back down. Biden wants triggers not real cuts:
When the group reconvenes Wednesday morning, Van Hollen said they will turn to consideration of a spending trigger - a mechanism to ensure that spending caps are adhered to by lawmakers. Under the provision - details of which would still have to be settled by lawmakers - if an agreed upon spending cap was breached, there would be automatic budget cuts administered by the Office of Management and Budget to bring spending back into line.
Obama wants to violate the trigger agreed to by the Social Security comission:
A congressional aide briefed on the Tuesday meeting said that White House officials brought up the idea of a payroll tax holiday for employers as a means to stimulate private sector job growth.
A tax deal struck last year included a one-year payroll tax holiday for employees. In recent days, White House officials have floated the idea of extending that measure past the end of the year, and expanding it to also include a lower payroll tax rate for firm owners.
The proposal could be a difficult sell to Republicans concerned with spending levels. It would lower taxes on businesses, but would also add to the budget deficit, while the entire tenor of the Biden-led talks has been to reduce federal spending.
Congress will default, that is what legislatures do. Bondholders need not fear defaults, they need to encourage more defaults, not less. Once we finally accept that Congressional default is the norm, then we can go about setting Treasury rates to reflect reality.
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