We interrupt the Everything Seemingly Is Spinning Out of Control Watch — STOCKS CRASHING! ECONOMY CRATERING! DEBT SOARING! OBAMA FLAILING! ENGLAND BURNING! BACHMANN’S EYES BULGING! — to bring you something else to #PANIC about… in the world of college sports! With bonus Rick Perry secessionist action! (No, not that kind of secession.)

The Texas A&M Aggies, a.k.a. the Brett Favre of the 10-team Big Twelve, are at it again. Rumors about an A&M move to the SEC — which would probably result, finally, in the disintegration of the Big XII, causing massive ripple effects across college sports, up to and including the formation of four 16-team superconferences, the end of Notre Dame’s independence, the destruction of the NCAA as we know it, and/or the Rapture — have resurfaced as a hot topic in the last 24 hours, with increasing numbers of respected journalists saying their sources are lending credence to the possibility of major news soon. Like, maybe an announcement on or around August 22?

And now, in the past hour or two, the topic has gone from “hot” to “surface-of-the-sun hot,” thanks to… wait for it… Rick Perry!!

Asked by The Dallas Morning News ’ statehouse reporters about SEC speculation regarding A&M, Perry responded: “I’ll be real honest with you. I just read about it the same time as y’all did. … As far as I know, conversations are being had. That’s frankly all I know. I just refer you to the university and the decision makers over there.”

The key phrase is “As far as I know, conversations are being had.” The response by the governor, a former Aggie yell leader and likely future presidential candidate, went beyond the Twitter and message board speculation that erupted in the last 48 hours.

Perry didn’t say if the conversations were strictly internal at this point or involved direct discussions with the Southeastern Conference.

Maybe Perry’s big announcement on Saturday isn’t that he’s running for president; it’s that Texas A&M is joining the SEC #WAR!!!!

In all seriousness, it’s not clear to what extent Perry is just regurgitating rumors, repeating things he “read about the same time as y’all did,” and to what extent he is actually relaying inside information. But the man is a former Aggie Yell Leader, and he’s been the governor of Texas for a decade, so he presumably knows everybody in all the relevant positions of power. This is causing lots of folks to take notice.

The best Twitter reaction to the news? That belongs to Luke Zim, who writes, “Rick Perry’s run for President just to get A&M in the SEC is the most elaborate college football fanatic move of all-time.”

Doug Mataconis’s post on the infuriating FAA situation got me all fired up, and inspired me to do something I rarely do: write to my congressperson.

Congresswoman DeGette,

I am writing to express my absolute disgust with the ongoing situation surrounding the FAA’s lack of funding. I do not know your position on the issue, and thus do not presume to blame you personally. But in the larger picture, it is utterly disgraceful that Congress has gone on recess without resolving this issue, leaving as many as 74,000 citizens out of work because our government cannot even perform the basic functions of governance. This inexcusable behavior reflects extraordinarily poorly on members of both parties and both houses of Congress. For our legislative branch to take a month off, with pay, while stranding thousands of Americans for no discernible reason other than partisan bickering and brinksmanship, is beneath contempt.

Such actions by Congress cause the public to rightly question whether anyone in Washington deserves to be re-elected next year. The entire Congress, as a body, is failing this country in countless ways, with this being just the latest, most egregious example. Mind you, I am a Democrat, and I blame the extreme, intransigent Right for many things — for instance, they take the bulk of the blame for the recent absurd standoff over the manufactured debt-ceiling crisis. But I know better than to naively believe that Congress’s overall dysfunctionality, as exemplified by this FAA fiasco, is solely one party’s fault. Both Republicans and Democrats share the blame for getting us to this point, and both Republicans and Democrats must work to improve things. It is incumbent upon each member of Congress to exercise leadership and prevent this sort of nonsense from occurring. “Partisanship” is not a dirty word, to the extent the parties are arguing honestly about genuine, passionate policy disagreements. But when partisanship leads to situations like this, something is clearly amiss. I urge you to take a leadership role in moving Congress back from the brink and getting this situation resolved immediately.

I also believe it would be appropriate to pass legislation stating that, in the future, if any federal employees are furloughed, or federal contracting projects placed on hold, due to congressional budgetary inaction extending past the deadline at which action is required to maintain funding, Congress should be barred by law from taking a recess until funding is restored, and congressional salaries should not be paid for the unfunded period of time. I somehow suspect these ridiculous impasses would be far less likely to occur if such a law were on the books.

Sincerely,
Brendan Loy
Denver, CO

I think I’ll send it to Bennet and Udall, too.

UPDATE: dcl points out that my hastily conceived proposed legislation would violate the 27th Amendment. At least the salary part. Seems like they could do the recess part.

“One of the most important things about this piece of legislation is that never again will any president, of either party, be able to raise the debt ceiling without being held accountable for it by the American people.” –Mitch McConnell, just now.

Translation: henceforth, members of Congress, of both parties, will feel even more freedom to pass irresponsible budgets, pretending that they are somehow unaware that they are requiring the president to borrow money, since it’s mathematically impossible to cover the spending mandated by Congress with the revenue allowed by Congress. They’ll do this because they know they can pretend to be “deficit hawks” when the president makes the necessary request to borrow the money that Congress has mathematically required him to borrow, at which point they can deny simple arithmetic and create a big f***ing months-long dog-and-pony show about “fiscal responsibility,” blaming the president for the arithmetic of the prior years’ budgets that Congress passed.

Didn’t the Tea Party require a reading of the Constitution at the beginning of this session of Congress? Apparently it didn’t sink in. Congress has the power of the purse. Not the President. Congress.

Our “leaders” are a disgrace to this nation. And because we allow them to be our leaders, so are we.

Ugh.

UPDATE: The bill passes.

President Obama, Speaker Boehner and Senate leaders in both parties have agreed to a deal that would effectively raise the debt ceiling through 2012 while enacting a mostly Republican-friendly package of spending cuts (and no new revenues). It would also set up a likely showdown in December over a second wave of deficit-reduction measures as recommended by a bipartisan congressional “supercommittee” — assuming the committee members, who will be evenly split between the parties, can agree. If they can’t agree, or if Congress doesn’t pass their recommendations, harsh across-the-board cuts in defense spending, Medicare and other programs would follow — a “trigger” that is designed to force both parties to bargain in good faith. But hey, at least the “trigger” won’t be default.

Tea Partiers, having quite clearly “won” the negotiations, are, of course, outraged. So are liberals, who see this as yet another Obama capitulation (though really, I’m not convinced Obama had that much choice in the matter, when his opponents were willing to “shoot the hostage” — in this case, the economy — if their demands weren’t met). Consequently, although it’s likely to breeze through the Senate, it’s not at all clear the deal will pass the House, where there are fewer moderates and more hard-line, unruly partisans on both sides of the aisle.

House Republican leaders are touting the new deal as better than the measure that they narrowly, and belatedly, passed last week. But the provisions on the Balanced Budget Act are already attracting criticism from conservatives.

Twenty-two House Republicans voted no on that bill, and it is likely that there will be more defections on the measure embraced by President Obama Sunday night. If every Democrat voted against it, Republicans could only afford about two dozen “no” votes and still pass it. …

Yet it remains unclear how many Democrats will vote yes on the debt-limit bill. Rep. Raul Grijalva (D-Ariz.), a co-leader of the Congressional Progressive Caucus, bashed the agreement on Sunday. Others are expected to follow his lead on Monday. …

[House Democratic leader Nancy] Pelosi…has not publicly endorsed the deal. … [She] issued this statement: “We all agree that our nation cannot default on our obligations and that we must honor our nation’s commitments to our seniors and our men and women in the military.

“I look forward to reviewing the legislation with my caucus to see what level of support we can provide.” …

Pelosi has wanted to raise the debt ceiling, but preferred that a “clean” bill go through without any strings attached.

A few of her deputies, meanwhile, have argued that Obama should invoke the 14th Amendment to raise the debt ceiling.

Regarding the “clean” debt ceiling increase, House Republicans put that notion up for a political show vote back in May, uniformly voting against it. House Democratic Whip Steny Hoyer urged his colleagues to vote against it, and most did — even though they actually supported the underlying policy it purported to enact — because they wanted to deny the GOP its desired political victory on the designed-to-fail bill. I’ve said all along, and it’s now completely clear in retrospect, that this was a tactical mistake, as well as a substantive one. Democrats would be in a much better political position today if they were already on record as supporting a “clean” increase, which is, of course, the only correct solution to this invented problem. Their too-cute-by-half decision to oppose a bill they support (paging John Kerry!) makes them look like idiots, and greatly complicates their argument now.

In any case, with time having essentially run out, the question at this point for Democrats is which is worse: cementing the horrible precedent that debt-ceiling extortion works, or allowing a default that will damage the economy and destroy Obama’s presidency? They can float bogus 14th Amendment arguments all they want, they can complain that Republican intransigence and illegitimate hostage-bargaining put them in this unfair and untenable position (and they’re right!), but that’s the choice they face, like it or not. I have no idea which way they’ll come down. All I know is that this whole thing is a farce, we should never have arrived at this juncture, and — whatever happens — I will never forgive the shameless Republicans who manufactured this “crisis” for political gain.

(Having said that… don’t think for a moment that Democrats, led by the same liberals who are crying foul over today’s deal, won’t eagerly use this same horrible precedent — that debt-ceiling extortion works — the next time they control part of Congress and a Republican president requests a debt ceiling increase, which will certainly happen. They’ll do it on goose-gander grounds, and to try and achieve policy objectives that would otherwise be impossible. And when they do, that will be unreservedly the Democrats’ fault. The debt ceiling is a math problem, not a policy decision.)

Seriously? Seriously? We’ve wasted three whole days, with national default* on our legal obligations mere days away, for this?!?

House Republicans will link passage of a balanced-budget amendment to Speaker John Boehner’s (R-Ohio) last-ditch debt-ceiling plan, which GOP lawmakers said would move the measure to passage in a high-stakes vote later on Friday. …

Republican lawmakers say the Boehner framework would still pave the way for the debt limit to be raised through the 2012 election in two chunks. But it would also mandate that the second hike of the ceiling could only occur after a balanced-budget amendment passed both chambers of Congress and went to the states for ratification.

Mind you, that would require a two-thirds vote in both chambers of Congress. In a divided government. And “if” that doesn’t happen, then we default in a few months. F***ing brilliant.

This is completely insane, and does not represent a remotely serious attempt to resolve the debt-limit crisis. This “revamped” Boehner bill has, by design, literally zero chance of success. Any journalist who reports this development in a way that credulously treats it as a serious attempt at pertinent legislating is deceiving his or her readers. This is sheer nonsense. But don’t believe me; believe Paul Ryan, yesterday:

What I never really agreed with is the idea that we would expect Harry Reid and Nancy Pelosi to deliver 40 [and] 15 votes from Democrats for our version of the Balanced Budget Amendment. You know, I just never thought that was realistic, to demand Democrats vote against their conscience for our version of the Balanced Budget Amendment. So I just never thought that would work.

Or, if you prefer, John McCain:

I will take back seat to none in my support of the balanced budget amendment. Thirteen times I voted for it. I will vote for it tomorrow. But what is really amazing about this is that some, some members are believing that we can pass a balanced budget amendment to the Constitution in this body with its present representation, and that is foolish. That is worse than foolish. That is deceiving. …

That is not fair to the American people, to hold out and say we won’t agree to raising the debt limit until we pass a balanced budget amendment to the Constitution. It’s unfair, it’s bizarro. And maybe some people who have only been in this body for six or seven months or so really believe that. Others know better. Others know better.

I know what the right-wing chorus will say: “Well, at least the Republicans have passed a bill! Where is the Democratic bill?” But both of the Republican bills — Cut, Cap & Balance, and now this — are completely meaningless as actual attempts to legislate and govern, because they were passed with 100% certain knowledge of failure. They are the equivalent of the Democrats passing a debt-ceiling bill that would cut the deficit by way of a carbon tax, and tie future increases to the passage of a constitutional amendment confirming that the individual mandate is permissible. Imagine if a Democratic House, responding to a request by President Romney and the Republican Senate to raise the debt ceiling, passed such a bill as a condition of raising the ceiling. Would you be impressed? Or would you recognize it as total baloney? Such a bill would obviously have no chance of becoming law in a divided government, and would not represent an actual attempt to govern, but rather, pure political posturing and pandering. This bill is the same way. So, yeah, there’s a “Republican bill,” and there will soon be two of them — both designed solely to score points with to a radical base that lives in an alternate universe. If you think the raw number of bills passed by each party is significant, ask yourself: would we be materially closer to a resolution if there was a “Democratic bill” along the lines I just proposed? Of course not. It would be a pointless, if not counterproductive, piece of legislation. So is this. The House GOP is not even attempting to govern at this point. These people are a joke, and a disgrace.

F*** you, Washington. F*** you, Tea Party.

P.S. *Or “semi-default,” or whatever you want to call it. I realize we wouldn’t immediately default on our debt, presuming Treasury can & does prioritize payments, and the markets don’t freak out so badly that we’re unable to “roll over” short-term debt. But we will certainly “default” on legal obligations of one kind or another, not making payments that are required by law. (What ever happened to conservative respect for the rule of law, by the way?)

P.P.S. Via the indispensible Megan McArdle, center-right economics writer and noted RINO (I kid!), here’s more on what a failure to raise the debt ceiling would actually look like.

UPDATE: Don’t believe Ryan or McCain? How about arch-conservative commentator Bill Kristol?

Last night, Speaker Boehner toyed with adding a gimmicky balanced budget amendment provision to the Republican budget bill in order to try to get the final handful of votes he needs for passage. He thought better of this last night, and didn’t do so. He should continue to avoid pointless and embarrassing gimmicks to try to secure a last-gasp victory on the House floor. Such a tainted “win” would truly be dead on arrival in the Senate. And it would do nothing to increase McConnell’s leverage, or Boehner’s own, if and when a Senate-passed bill comes over to the House this weekend.

RINO. [/sarcasm]

As if the increasing odds of a debt-ceiling disaster weren’t bad enough, now there’s this:

The U.S. economy came perilously close to flat-lining in the first quarter and grew at a meager 1.3 percent annual rate in the April-June period as consumer spending barely rose.

The Commerce Department data on Friday also showed the current lull in the economy began earlier than had been thought, with the growth losing steam late last year.

That could raise questions on the long held view by both Federal Reserve officials and independent economists that the slowdown in growth as the year started was largely the result of transitory factors.

Growth in gross domestic product — a measure of all goods and services produced within U.S. borders – rose at a 1.3 percent annual rate. First-quarter output was sharply revised down to a 0.4 percent pace from a 1.9 percent increase.

Economists had expected the economy to expand at a 1.8 percent rate in the second quarter. Fourth-quarter growth was revised to a 2.3 percent rate from 3.1 percent.

“The second quarter disappointed, but the first-quarter downward revision is more disturbing. It advances the pangs of concern. The debt ceiling nonsense is not going to help us. We’re already in an economy that is subpar,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

I for one welcome our new Texan overlords. (Well, not really.)

#PANIC!

Today’s debt ceiling developments, summarized in a single tweet:

Oh, and I also had a little (more) fun with a Drudge mockup:

Continue reading »

The Republicans are feverishly rounding up supporters ahead of this afternoon’s dramatic Boehner-bill vote on the House floor. The Speaker is cautiously optimistic his bill will pass. (We’ll know he’s really confident if he schedules a vote before the markets close.) Oh, and there’s a Notre Dame angle:

Rep. Mike Kelly (R-Pa.), a bulky former Notre Dame football player, gave a rousing football-themed speech and said he would vote for the bill. He told colleagues they needed to do three things: put on your helmet, put in your mouth piece and tighten your chinstrap. He gave out signs with the Notre Dame football saying: Play like a champion today.

“Let’s kick the sh*t out of them,” Kelly said in the meeting, according to several sources.

Heh. Nate Silver thinks it’s all over but the face-saving. I think the bill will pass by a vote or two. (But if it fails, it’ll be by a dozen or more, because of yes-to-no switches once it becomes clear it’s gonna fail.)

Heh:

What none of [the Boehner bill's conservative] critics have is an alternative strategy for achieving anything nearly as fiscally or politically beneficial as Mr. Boehner’s plan. The idea seems to be that if the House GOP refuses to raise the debt ceiling, a default crisis or gradual government shutdown will ensue, and the public will turn en masse against . . . Barack Obama. The Republican House that failed to raise the debt ceiling would somehow escape all blame. Then Democrats would have no choice but to pass a balanced-budget amendment and reform entitlements, and the tea-party Hobbits could return to Middle Earth having defeated Mordor. This is the kind of crack political thinking that turned Sharron Angle and Christine O’Donnell into GOP Senate nominees.

LOL! Of course, the same editorial also claims that Boehner’s plan “may not prevent a U.S. national credit downgrade, but it has a better chance of doing so than Mr. Reid’s” — which is the opposite of what the credit agency folks themselves are reportedly saying. Still, I love the Tolkien reference, and the Tea Party smackdown.

Incidentally, on the rating downgrade issue, Megan McArdle has another must-read.

Jon Stewart captures the national mood, taking on both Congress (Monday night) and the President (last night):

Some commentators and politicians have been suggesting, based on a variety of rationales, that Social Security payments will definitely, without question, be made on time next month, even if the debt ceiling isn’t raised — and that any suggestions to the contrary by the Obama Administration is a lie. Those folks appear to be incorrect.

This brief article by James Surowiecki is a must-read. It says just about everything I’ve been trying to say about the debt ceiling situation, but more succinctly and with less rage. It also includes a useful history lesson:

The truth is that the United States doesn’t need, and shouldn’t have, a debt ceiling. Every other democratic country, with the exception of Denmark, does fine without one. There’s no debt limit in the Constitution. And, if Congress really wants to hold down government debt, it already has a way to do so that doesn’t risk economic chaos—namely, the annual budgeting process. The only reason we need to lift the debt ceiling, after all, is to pay for spending that Congress has already authorized. If the debt ceiling isn’t raised, we’ll face an absurd scenario in which Congress will have ordered the President to execute two laws that are flatly at odds with each other. If he obeys the debt ceiling, he cannot spend the money that Congress has told him to spend, which is why most government functions will be shut down. Yet if he spends the money as Congress has authorized him to he’ll end up violating the debt ceiling.

As it happens, the debt ceiling, which was adopted in 1917, did have a purpose once—it was a way for Congress to keep the President accountable. Congress used to exercise only loose control over the government budget, and the President was able to borrow money and spend money with little legislative oversight. But this hasn’t been the case since 1974; Congress now passes comprehensive budget resolutions that detail exactly how the government will tax and spend, and the Treasury Department borrows only the money that Congress allows it to. (It’s why TARP, for instance, required Congress to pass a law authorizing the Treasury to act.) This makes the debt ceiling an anachronism. These days, the debt limit actually makes the President less accountable to Congress, not more: if the ceiling isn’t raised, it’s President Obama who will be deciding which bills get paid and which don’t, with no say from Congress.

Read the whole thing. And also read Felix Salmon’s take. And then weep. And #PANIC.

I have one additional thought on the debt ceiling, which I meant to include in my previous post, but which probably deserves its own post, so here goes:

I think politicians on both sides of the aisle — and more broadly, partisans on both ends of the ideological spectrum — are vastly underestimating the political downside risk of a failure to raise the debt ceiling, and the resulting default or semi-default. The political consequences for the current powers that be, Republican and Democrat alike, are potentially catastrophic. I don’t just mean suffering dips in approval ratings, or losing the 2012 elections. That’s small potatoes. Worst-case scenario, this could go much deeper. With unfavorable ratings for both major parties already nearing record highs, and vulgar anti-Washington hashtags making waves on Twitter, things are already approaching a boiling point. As I tweeted a few days ago, in the spirit of Harry Potter, the politicians engaging in this debt-ceiling brinkmanship aren’t just playing with fire. They’re playing with Fiendfyre.

If a deal is reached, or if a short-term semi-default happens but is quickly remedied and the negative economic consequences are relatively tame (and/or indistinguishable from the already poor economic climate), the current bout of voter anger will largely fade into the background noise of standard-fare anti-Washington sentiment. But if there’s no deal, and default or semi-default happens, and there are severe (and easily identifiable) economic consequences — real-world economic pain hitting voters, and flowing directly from the total dysfunction of our federal government — there is almost no ceiling to the potential political fallout.

If such a thing were to happen, all the back-and-forth talking points of the present negotiations would appear totally childish and ridiculous in retrospect; the only salient fact would be that Washington’s inaction caused a recession or depression. Voters’ rage would be unmeasurable, and rightfully so. To quote from another fantasy movie, their wrath would be terrible, their retribution swift. At a minimum, I think you would see a credible, and maybe successful, third-party candidacy in 2012 — I’ve already predicted a third-party victory if unemployment exceeds 13% in the wake of a failure to raise the debt ceiling — but that could be just the beginning, if things get bad enough. If a severe second recession, or even a depression, can be traced to a specific, identifiable failure of both parties to govern the country in a defensible way, it could conceivably be the end of one or both of the major parties as we know them.

I recognize that pronouncements of “OMG THE DEATH OF THE MAJOR PARTIES!!1!” are a dime a dozen from squishy No Labels-ish centrists like me, folks with a history of political love affairs with Lieberman and Bloomberg and their ilk. But this is different, I think. I’m not talking about a third-party (and perhaps fourth- and fifth-party) movement led by coastal, technocratic centrist elites, self-styled Good Government Types who think There Must Be A Better Way. I’m talking about a broad-based rage against the current governing parties that would awaken the sleeping giants of American politics: the largely unengaged, uninformed, low-information voters who don’t really know or care much about politics, but who would easily understand and care about such a simple, basic — and, in this scenario, true — storyline as, “You personally have been directly f***ed over by an abject failure of your entire federal government. We are now in a recession/depression because they, all of them, didn’t do their damn jobs.”

If you think the Tea Party was an example of the grassroots waking up and rising up, just wait until you piss off the Great Middle in this fashion. The momentum of the awakening I’m describing would be unstoppable; all nuance would be lost; everyone would be blamed. Even if the actual proximate-cause equation were to become complicated — for instance, if the downturn following a default is worsened by unrelated factors like, say, a collapse of Italy next month or whatever — too bad. These voters, once roused to anger, won’t care about excuses like that. They’d be mad as hell, unwilling to take it anymore, and who knows what our politics would look like by the time they’re done?

Nobody does. And I’m not sure this is a risk that anyone in power — Obama or Boehner or McConnell or Reid or Pelosi or Cantor or anybody else inside the Beltway — really appreciates adequately. The scenario I’m describing is unlikely to come to pass, but I’d say it’s more plausible than at any previous time in my lifetime to date. And if it does happen? Hold onto your seats.

The “debate” between Democrats and the Anti-Arithmetic Right over whether or not the nation should be economically ruined now seemingly boils down to three options:

1) John Boehner’s utterly disastrous plan, which I hereby dub the Omnibus Kick-The-Can-Down-The-Road Act of 2011, to pass a short-term debt ceiling increase, then re-run this entire charade in the middle of an election year, when it will surely be much easier to put aside naked partisanship and reach a mutually acceptable bipartisan deal (!?!?!) … really, we should call this the “Make Obama Veto A Debt Ceiling Bill So He Can’t Blame Us For The Crisis We Caused” plan, since that’s all it’s intended to accomplish;

2) Harry’s Reid’s plan to cut $2.7 trillion in spending without any revenue increases, which is such a complete capitulation to the Republicans’ core demand that it will undoubtedly be rejected by hardline Republicans and Tea Partiers, who wouldn’t know a favorable deal if it smacked them in the face and dumped tea on them while waving a Gadsden flag and reading aloud the collected works of Ayn Rand;

3) Default. Or technical default. Or “semi-default.” Or whatever you want to call it if the United States government is unable to make payments required by law — probably not including debt interest or principal, though that can’t be guaranteed because it depends in part on how the markets react, which cannot be confidently predicted because this is a completely unprecedented circumstance brought about by fuzzy math and right-wing nutters — and is forced to operate on a daily (not monthly! not yearly!) cashflow basis and shut down 40+ percent of its operations instantly, including a wide variety of services that everyone regards as essential.

Regarding option #3, it’s not clear that next Tuesday, August 2, is the actual date on which this would happen, as we’ve been hearing for months. That was Treasury’s estimate back in May of when the money would run out, but we may have an extra week or so:

In a note published Friday, the Barclays Interest Rates Research team wrote that “the date on which the Treasury will run out of cash to pay its obligations might not be August 2; it might be around August 10 instead.”

Why the change? The note explains that previous projections showed the Treasury running out of money on the morning of Wednesday, August 3. On that day, it was predicted, the Treasury would need to spend $32 billion, including $22 billion in Social Security payments — and it was only projected to have $30 billion at its disposal.

That projection was made on July 13. But since then, the researchers say, the Treasury has taken in about $14 billion more than expected, and paid out about $1 billion less than expected. Hence, the deadline date might actually be August 10, a week later than previously believed.

Other reports suggest August 9 might be the “real” deadline. Either way, August 2 is Treasury’s story, and it’s sticking to it, presumably for the rather obvious reason that if you tell Congress that it has an additional week to dither, delay, grandstand, posture and bloviate, Congress will proceed to dither, delay, grandstand, posture and bloviate for an additional week. I imagine Treasury will announce this “extra week” at the moment it becomes clear Congress is going to miss the August 2 deadline, and not a second sooner.

Anyway, I have a question, and it’s an honest one — I’m not trying to make a rhetorical, partisan point here; I really don’t know the answer to this. But it’s been perplexing me for a while now. The debt ceiling is a federal law saying Treasury can’t borrow more than X amount. But there are also lots of other federal laws saying Treasury must spend money on various things — paying prison guards, funding air traffic control systems, sending out Social Security checks, etc. If the money runs out, and Treasury can’t borrow any more money because of the debt ceiling, then it can’t do some of the spending required by law. So, if the debt ceiling isn’t raised, Treasury will be required (by arithmetic) to violate federal law, one way or another. Why does everyone assume that Treasury would necessarily violate the various federal laws requiring it to spend money? Why is that any more justifiable than violating the debt ceiling law? They’re all federal laws, presumably of equal weight, right? Mind you, I’m not talking about the 14th Amendment argument, which I believe is bunk. Rather, I’m merely talking about conflicts among federal statutes. It’s not like there’s 40+ percent of federal spending that Treasury can just discretionarily choose, without violating the law, to stop overnight. (Or is there?!?) I’m not advocating one course of action or another, I’m just saying I don’t understand why the debt ceiling is presumed to take priority over the countless other federal laws that I imagine Treasury would necessarily violate by failing to make required payments (of various sorts; I’m not just talking about debt interest payments, I’m talking about everything Treasury does, all of it pursuant to laws passed by Congress). What am I missing here?

P.S. For the record, among the three options listed above, my order of preference is: #2, then #3, then #1. Yeah — it’s a close call, but ultimately, I’d rather risk the consequences of a brief semi-default (and hope those consequences finally set the Republicans straight before things get too bad) than go through this nightmare again next spring. Partly because I suspect the market consequences of such a punt would be pretty bad in and of themselves. And partly because, at some point, you have to stop giving ever more power to economic hostage-takers. They cannot be allowed to pull this stunt again so soon, and certainly not in the midst of a presidential election, when everyone will have more motive than ever to be intransigent and inflexible. Really, it’s insane that anybody is even proposing such a ridiculous option. But then again, this whole situation is insane, so I guess I shouldn’t be surprised.

CNN Breaking News:

House Speaker John Boehner has ended debt talks with President Barack Obama, telling fellow Republican House members in a letter that he will “begin conversations with the leaders of the Senate in an effort to find a path forward.”

The president said his administration had offered “an extraordinarily fair deal” to cut expenditures and raise revenues, in return for Congress agreeing to hike the nation’s debt ceiling. [Per a Washington Post breaking-news alert, Obama added that "if it was unbalanced, it was unbalanced in the direction of not enough revenue."] But he said that Boehner “left (him) at the altar.”

Obama says he called congressional leaders from both parties to the White House on Saturday morning to “explain to me how we are going to avoid default” on the nation’s debt.

“We have run out of time,” Obama said.

We are so screwed.

P.S. Couldn’t the talks have broken down before the markets closed for the weekend? A drop of, oh, I don’t know, 500 points in the Dow in the final hours of trading on a Friday might have gotten Congress’s attention heading into the weekend…