In yet another sign of a slowing economy, US federal receipts are running below expectations.
As a result, the need to bump up the debt ceiling will come sooner than expected.
Given Republican budget fights and threats in the Obama years, one of them resulting in a partial government shutdown, it will be interesting to see their stance now that Trump is president.
The Wall Street Journal reports US Treasury Secretary Mnuchin Wants Debt-Limit Increase With No Conditions Attached.
Treasury Secretary Steven Mnuchin asked Congress to increase the debt limit—without policy conditions attached to it—before lawmakers leave for their summer recess.
Mr. Mnuchin told the House Ways and Means Committee that he favors a so-called clean debt-ceiling increase. That is in opposition to the position that Republicans have taken for the past six years, when they have tried to pair spending cuts with debt-limit increases.
Congress is scheduled to leave Washington around July 28 and return after Labor Day in September.
Earlier Wednesday, White House budget director Mick Mulvaney said the date by which Congress would need to raise the debt limit may come sooner than the administration had anticipated, accelerating a difficult challenge for Republican lawmakers.
“My understanding is that the receipts currently are coming in a little bit slower than expected and you may soon hear from Mnuchin regarding a change in the date,” Mr. Mulvaney told a House panel. Mr. Mnuchin is testifying before the House Ways and Means Committee this afternoon.
A 16-month suspension of the federal borrowing limit expired in March, and the Treasury Department began employing emergency cash-conservation steps soon thereafter to avoid breaching the debt ceiling.
Raising the statutory debt limit will present challenging internal politics for Republicans, who have frequently opposed such increases or insisted on conditions.
The exact timing will be tricky, too. Congress is scheduled to be on recess for most of August, creating a relatively short window for action either before or after.
When Will Republicans Hike Debt Ceiling?
Now that Republicans are in control we are about to find out how hypocritical about the budget they are.
Mike “Mish” Shedlock
Treasury is asking for a debt increase before August. That suggests the North Korean Army could be history before August. God speed.
NK ain’t grenada,panama,iraq,they’ll fight,i doubt trump has the stomach for a (real) fight.trump (like Obama) will do anything that’s ezzzz,if takes work or real decision making,then it’s can kickin time
a few years ago Pentagon war gamed invasion of NK. Aus would take 250,000 casualties.
Let’s give the federal government a fiscal vacation too.
Expectations of tax cuts might be seeing some income smoothing to 2018
“Now that Republicans are in control we are about to find out how hypocritical about the budget they are.”
…
After DJT caved and signed off on a budget (that the Democrats celebrated) thru September 30th … he talked of maybe a govt shutdown needed this Fall for next budget.
Yeah, right … another cave on deck.
To President Trump’s credit his temporary budget included an extra $50 Billion defense funding to remove North Korea from the face of the Earth.
you advocating for genocide ? You seem eager to slaughter millions of innocent women and children.
perhaps you should seek professional help
Perhaps you need to study the art of war. Trump attended a military academy. My military occupational specialty was 7315, genocide.
Trump was unfit for military service.
chickenhawks and laptop warriors always bray for blood of innocents
those of us who have experienced war first hand tend to be more mature.
You mean the North Korea that has so far not stolen a single cent of my income?
Nor ever effectively barred me from buying whatever guns and bombs I would consider adequate to defend myself, should they attempt alter that statistic?
But that some government apologist on TV hails as the hobgoblin du jour? So that his masters can sucker their uncritical ignoramus underlings into cheering and stomping their flat, flabby, useless feet, while massa continues to in no way follow North Korea’s so far spotless record wrt not stealing a dime from me? Man, shouldn’t I be proud of the orange haired dimbulb-in-chief!!
indeed – the government of north korea poses zero threat to me or any other American
“…the government of north korea poses zero threat to me or any other American”
When i was in Korea, North Korean soldiers murdered Captain Bonifas and Lieutenant Barret in Panmunjom.
debt will be 25 trillion in 5 years, leaving the US in the Japan death trap. 3% growth pluw 2% inflation = 5% rates and 1.25 trillion per annum in interest which equals 40% of the tax take (half of personal taxes).
until the US stops engaging in the creation of a full blown libtard socialist welfare state, it is on the road to ruin.
of course, the way the japanese circumvent the problem is via BoJ monetizing government debt and buying the stock market.
so, republicans should pass it clean BUT insist on fiscal surplus of 1% for this years budget AND DECREASES IN THE DEBT LIMIT IN THE NEXT FIVE YEARS OF AT LEAST 200 BILLION PER ANNUM.
this shit just has to stop.
spending cuts to come equally from entitlements and military spending.
Ah, yes,,,,that illusive “5 Year Plan.” One year into the next watch.
heh… as above, so below
Budget blueprint is disinflationary/deflationary. Negative consumption shock and upward supply shock. If budget surplus ensues in package its outright deflationary event.
I thought David Stockman told Cavuto back in March that everyone needs to get out of the casino because there was going to be food fights galore in Congress ’til memorial day over the debt ceiling.
Robert Shiller just went on TV today and said that markets could rise 50%. Get out or stay the course ? perennial questions indeed.
Too bad the SNB doesnt have an asset management arm we can invest in. They know!
Ha+++ ,gotta love it. Build a bunker and fill it with Amazon, Netflix and Apple shares!
Stockman?
I caught that too … bloodbath this spring. Then a few days ago moved it to this Fall.
This Fall he’ll move bloodbath to …..??????
Maybe I need to pay up and get behind his paywall for the ultra secret double guaranteed drop dead timing of bloodbath?
What ever you do, don’t bring up Reagan Deficits. He’ll double the subscription price on ya.
Rope-a-dope. Stockman has been predicting a stock market drop for the past few years. If he stays consistent in his market-drop prediction for 15 years straight, odds are he will catch a market drop and be able to trumpet his predictive powers. If Stockman throws in the towel prematurely, beware a big market drop. The forces of irony are in the House of Stockman.
Interest on excess reserves coming home to roost.
In QE the profit on securities held is returned to Treasury … boosting receipts and keeping deficits down. Looking at April treasury statement. Fiscal year to date the Federal Reserve has remitted $48 billion to Treasury. Prior fiscal year to date was $75 billion.
A(nother) catch to FOMC raising the effective federal funds rate, having to raise the amount paid on excess reserves.
Federal Reserve upping the $$s to Wall Street at taxpayer’s expense.
yippee
Re: receipts up/deficits down. Doesn’t Treasury also get “dividends” from Fannie & Fred?
https://www.bloomberg.com/news/articles/2017-05-05/fannie-mae-will-pay-2-8-billion-to-u-s-treasury-after-profit
A USA.gov power play: Strengthen the USA Too-Big-To-Fail banks so they can buy up or takeover territories of foreign players like Deutsche Bank, whose failure is being hastened by the USA’s global regulation blitzkrieg, which has been very effective sucking up German corporate money. Bloomberg article makes it sound like Deutsche Bank is under jurisdiction of the USA Empire, and that Germany is a USA vassal/colony. [With Schumer setting the public Agenda for his old friend Mueller, no witch hunt limits. DB has Russian clients, so Trump is linked to a bank with Russian connections. Burn him at the stake for that.]
https://www.bloomberg.com/news/articles/2017-05-24/deutsche-bank-asked-for-documents-on-trump-loans-russian-trades
…Representative Maxine Waters of California and four other Democrats on the House Financial Services Committee asked the Frankfurt-based lender for its internal report about its conduct in the Russian “mirror trading” scandal. They also asked for any internal review of Trump’s business dealings with the bank, descriptions of which have surfaced in news reports. [Read More: Deutsche Bank in Bind Over How to Modify $300 Million Trump Debt]
The lawmakers asked whether the bank’s loans to Trump, made years before the New York developer ran for president, “were guaranteed by the Russian government, or were in any way connected to Russia.” A copy of the letter sent to the bank was reviewed by Bloomberg News…The Democrats cited Deutsche Bank’s previous compliance failures, which have resulted in more than $6 billion in fines and penalties to U.S. regulators since 2015…Along with the internal review of the Russian stock-trading scheme, they are seeking any internal correspondence and communications related to loans extended to Trump and his immediate family members. The bank has made more than $300 million in loans to Trump…
Well, there is no “peace treaty” for Germany and I heard that ultimately, the U.S. do control that country legally, albeit secretly.
Forgot the acronym, but there has been global legislation affecting BANKS. In response, many won’t deal with Americans, period.
Americans are not allowed to trade CFDs either (and CFD brokers make sure n o t to open an account for a U.S. citizen).
Nanny knows best?
BUT BY HOW MUCH?
Silly Wabbit. Politicians don’t do Austerity in Mid Term Campaign seasons. They don’t like the after taste from putting their tongues on that third rail of entitlements.
Besides, summer is hot enough without adding myriad urban torching.
Repubicans are the Party of Cowards.
They talk tough but when it comes right down to the nut cutting they’ll fold every single time.
Majority in the House? Majority in the Senate? The Presidency?
Meaningless.
Watch they back down – FIRST TIME EVERY TIME!!!
My, My, what a choice. Raise the debt ceiling or severely cut the budget. I’ll take cut the budget for $800, Alex……
our only hope is another gov’t shutdown
I fail to see the benefit from a government shutdown. Last federal government shutdown, everyone got back pay. So, it was a paid vacation for government employees. Not much taxpayer or budget benefit there
correct
but this time is Trump regime; the 800,00 non-essential employees are likely never to be rehired
This is a bit peculiar. New Deal Democrat, who writes on Bonddad.blogspot.com and XE.com, tabulates the Treasury report of withholding taxes paid in the last few weeks, and those have been going up fairly impressively. Yet we are supposedly bringing in money slower than expected.
Link is http://community.xe.com/blog/xe-market-analysis/weekly-indicators-yield-curve-tightens-edition
Numbers are 2/3 of the way down. y-o-y change is something like 4%
Trump is going to raise some money by ending revenue sharing on Gulf of Mexico oil with Texas, Louisiana, and Alabama. He will also save lots by cutting funds for social programs, leaving the individual states to make up the difference. He’s going to sell oil from the strategic oil reserves. His tax returns are almost completed for the last 20 years, so he will be writing a bigly cheque soon. Plus he’s going to earn a lot by selling confidential info to Russia. Don’t worry America, he will get that budget balanced.
“Now that Republicans are in control we are about to find out how hypocritical about the budget they are.”
Well so are the Democrats and the so called Independents.
All of the D.C. clowns are corrupt to the core.
They all seek two things:
1. To get reelected.
2. Protect the Status Quo which rewards them with Special Benefits that we do not enjoy.
We must vote out all who now office and over many election cycles continue to do the same.
I would take the bet on Republicans WILL fold.
Rising Crypto Currencies Are Sign Of International Rejection Of USD …
[youtube https://www.youtube.com/watch?v=V8Ny4P3jQqs&w=560&h=315%5D
The Roman Empire and Roman Republic before that had some good years in extracting money from the surrounding territories. USA has a bunch of money-losing dependencies under its expensive military umbrella. Only if Trump sacrifices some of the military budget in exchange for welfare state benefit limits can the budget deficit trend towards zero. This debt ceiling game is getting old.
If tax receipts are down, then fewer people must be buying health insurance as well.
This “Debt Ceiling” is purely a political folly. It has absolutely zero relevance to any macroeconomic reality. For starters the fed can never be bankrupted in its own dollars. It can never run out of money.[ It can overspend and raise inflation], but the Debt Ceiling is self imposed by the party in power. It is subject to the will of Congress, But that’s about all.
Hyperinflation is not folly. Just ask the residents of Venezuela.
Hyperinflation in the US is folly
“Now that Republicans are in control we are about to find out how hypocritical about the budget they are.”
We already know from past experience.
Haven’t you worked it out. It is all about the top .01%. They have hoovered (sucked up everything). They are extra national, they do not pay national taxes. HUMPTY TRUMPTY belongs to this ) 0.1% They are cannibalising the capitalist system in its end days. Central banks are their overdraft.