October 10, 2013

And yet, they've been pushing the "no big deal" line this week. Guess reality intervened:

House Republican leaders are pushing a short-term increase in the debt limit, without any conservative strings attached, to calm jittery financial markets, according to senior GOP advisers.

The plan, which is being presented to the House GOP caucus Thursday morning, coincided with a warning to lawmakers from Treasury Secretary Jack Lew that he will be unable to guarantee payments to any group — whether Social Security recipients or U.S. bondholders — unless Congress approves an increase in the federal debt limit.

Financial markets soared on the first sign of optimistic news out of Washington in almost a month, with the Dow Jones industrial average up 169 points in the first 15 minutes of trading. The emerging plan would not deal with the now 10-day-old shutdown of the federal government, an issue that would move onto a separate track of talks.

Bloomberg:

The proposal wouldn’t end the partial government shutdown as Republicans try to shift the debate back to spending issues, said the aide, who asked for anonymity to discuss strategy.

Under the plan, the Treasury Department wouldn’t be able to use so-called extraordinary measures to further extend borrowing authority, creating a hard six-week limit, said two aides requesting anonymity to discuss the proposal.

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