Is the US dollar’s position as the reserve currency of the world imperiled as a result of the debt limit showdown in Washington?

Read it all.

“We took some bread crumbs and left an entire meal on the table,” said Senator Lindsey Graham, Republican of South Carolina. “This has been a really bad two weeks for the Republican Party”–From the online version of last night’s New York Times

I will take comments on this submitted by email only to KSHarmon[at]mindspring[dot]com.

With just two days to go before an Oct. 17 deadline to raise the nation’s debt limit, 51% of the public views a rise in the nation’s debt limit as “absolutely essential” in order to avoid an Half View Debt Limit Increase as Essential, More than a Third Say it is Noteconomic crisis, while 36% think the country can go past the deadline without major problems.

Public concern over breaching the debt limit deadline has risen only slightly from a week ago, when 47% said a rise in the debt limit was essential and 39% said it was not.

Those who see no dire economic consequences resulting from going past Thursday’s deadline are not only skeptical about the timing ”“ most say there is no need to raise the debt limit at all. Nearly a quarter of all Americans (23%) ”“ including 37% of Republicans and 52% of Tea Party Republicans ”“ believe the debt limit does not need to be raised at all.

Read it all.

Looks like it will go through Jan 15, and there will be a panel create to work on deficit reduction.

One of many tweets:

”@j_strong
“It’s all over. We’ll take Senate deal” … “People are thinking about primaries, they really are”

Top Senate leaders on Monday said they were within striking distance of a deal to sidestep a looming debt crisis and reopen the federal government two weeks after a partisan deadlock forced it to close.

Fourteen days after a partial government shutdown began, senators signaled a bipartisan resolution could come soon.

“I’m very optimistic we will reach an agreement that’s reasonable in nature this week to reopen the government, pay the nation’s bills and begin long-term negotiations to put our country on sound fiscal footing,” Senate Majority Leader Harry Reid (D., Nev.) said on the Senate floor.

Read it all.

What started as a mad dash to strike a deal to lift the federal debt limit slowed to a crawl over the weekend as stalemated Senate leaders waited nervously to see whether financial markets would plunge Monday morning and drive the other side toward compromise.

Republicans seemed to think they had more to lose. After talks broke down between President Obama and House leaders, GOP senators quickly cobbled together a plan to end the government shutdown ”” now entering its third week ”” and raise the $16.7 trillion debt limit. Senate Minority Leader Mitch McConnell (R-Ky.) then asked Majority Leader Harry M. Reid (D-Nev.) to elevate negotiations to the highest level.

On Sunday ”” with the Treasury Department due to exhaust its borrowing power in just four days ”” Reid was wielding that leverage to maximum advantage. Rather than making concessions that would undermine Obama’s signature health-care initiative, as Republicans first demanded, Democrats are now on the offensive and seeking to undo what has become a cherished prize for the GOP: deep agency spending cuts known as the sequester.

Read it all.

The Senate’s top two leaders have asserted control over budget negotiations with the White House for a deal to reopen the federal government and avoid a default on the nation’s debt.

Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., met Saturday morning with Sen. Lamar Alexander, R-Tenn., and Sen. Charles Schumer, D-N.Y., to begin preliminary discussions.

“I hope that our talking is some solace to the American people and to the world,” Reid said. “This should be seen as something very positive, even though we don’t have anything done yet.”

Read it all.

A proposal from Sen. Susan Collins is emerging as one potential way to dig lawmakers out of a government shutdown and possibly also avoid a potentially catastrophic debt default.

The moderate Maine Republican, whose vote will be essential to any fiscal deal, is circulating a rough plan to reopen the government, repeal the medical device tax and provide agencies with greater flexibility in implementing the sequester. The initial reception has been positive and may be the beginnings of a bipartisan solution to end the intractable impasse between House Republicans and Senate Democrats.

Collins said Sens. Kelly Ayotte (R-N.H.) and Lisa Murkowski (R-Alaska), who are also being watched as potential GOP votes to end the fiscal standoff, have signed onto the proposal. And Collins said she has spoken to “several Democrats” about her plan, which she hopes “at least provides concepts that could be the basis for us reopening government.”

Read it all.

As the government shutdown enters its second week, some religious groups are starting to feel the pinch, and they’re also finding ways to reach out.

More than 90 Catholic, evangelical and Protestant leaders have signed a statement rebuking “pro-life” lawmakers for the shutdown, saying they are “appalled that elected officials are pursuing an extreme ideological agenda at the expense of the working poor and vulnerable families” who won’t receive government benefits.

Starting Wednesday, evangelical, Catholic and mainline Protestant leaders will hold a daily “Faithful Filibuster” on Capitol Hill with Bible verses on the poor “to remind Congress that its dysfunction hurts struggling families and low-income people.”

Read it all.

A senior Chinese official has warned that the “clock is ticking” to avoid a US default that could hurt China’s interests and the global economy.

China, the US’s largest creditor, is “naturally concerned about developments in the US fiscal cliff”, vice finance minister Zhu Guangyao said.

Washington must agree a deal to raise its borrowing limit by 17 October, or risk being unable to pay its bills.

Read it all.

The work that Shaun O’Connell does is required by law, yet now he’s sidelined by the government shutdown.

O’Connell reviews disability claims for the Social Security Administration in New York, checking that no one’s gaming the system, while ensuring people with legitimate medical problems are compensated properly.

Billions of dollars are at stake with this kind of work, yet O’Connell is considered a nonessential employee for purposes of the partial government shutdown.

“If you stick with the semantics of essential and nonessential, you could easily be offended,” says O’Connell, who has worked for Social Security for 20 years.

Read or listen to it all.

Obamacare is not primarily an entitlement program. The entitlement component ”” the exchange subsidies ”” will involve about 2 percent of Americans during the first year. (Others will be added to Medicaid, which has been around since 1965.) About 20 million Americans will eventually get subsidized insurance ”” a check that goes not to the individual but to insurance companies. The remaining 170 million Americans will not experience Obama­care as a sugary treat but as a series of complex regulatory changes that may make their existing insurance more costly, less generous and less secure.

The main problem with Obamacare is not its addictive generosity; it is its poor, unsustainable design. Its finances depend on forcing large numbers of young and healthy people to buy insurance ”” yet it makes their insurance more costly and securing coverage less urgent. (Because you can get coverage during each year’s enrollment period at the same price whether you’re healthy or sick, the incentive to buy coverage when healthy is much diminished.)

Heavy insurance regulations will lead some employers to restructure their plans, dump employees into the public exchanges or make greater use of part-time workers. In order to meet a few worthy goals ”” helping the poor buy insurance and covering preexisting conditions ”” Obamacare seems destined to destabilize much of our current health system.

Read it all.

The Episcopal bishop of Washington is inviting any couples who had to cancel their weddings on federal property due to the government shutdown to have their ceremonies in a garden at Washington National Cathedral.

Bishop Mariann Edgar Budde said Thursday that the Bishop’s Garden at the cathedral would be offered free of charge to any couples who wanted to hold wedding ceremonies outdoors.

Read it all.

On the eve of a possible shutdown of the U.S. government, religious leaders denounced the political brinkmanship prevailing in Congress today.

“Shutting down the government will do real damage,” said Rev. David Beckmann, president of Bread for the World, speaking at a press conference today. “Risking our nation’s creditworthiness will do even more damage. Most clearly, the disruption and uncertainty will put the brakes on our economy.”

Unless our nation’s leaders come to an agreement on appropriations for the coming months, the U.S. government will close on Oct. 1, the start of the 2014 fiscal year. If no agreement is reached by Oct. 17 on increasing the debt limit, the country’s creditworthiness will be compromised.

Read it all and follow the link at the bottom to the letter to see the actual signatories.

Biologist Louis Burnett had to move his lab students to a conference room across the parking lot at Fort Johnson. His federal lab, animals and cell cultures are under lock and key.

Burnett’s dilemma is a case example of the ripple effect of the ongoing federal shutdown. As the shutdown enters its third day, the clock keeps ticking insistently for any number of people who don’t work for the federal government but find themselves on the outs because of the political standoff.

Burnett is a research professor at the College of Charleston. But like others in a cadre of college and state researchers, he collaborates on studies, shares office space and makes use of the equipment at the Hollings Marine Lab and the Center for Coastal Environmental Health and Biomolecular Research.

Read it all.

Even though its most virulent critics raise the spectre of “Canadian-style” health care, “Obamacare” does little to change the enduring differences between the two health care system. What, exactly, does “Obamacare” look like compared to Canada?…

Not cost containment: The sharpest critics of Obamacare argue it does little to address the fundamental challenge of cost control. The new law includes a review of Medicare reimbursement and the expansion of Accountable Care Organizations to reward cost-effective care. But it doesn’t grapple in a systematic fashion with the overall inefficiencies in health care delivery and financing, the administrative burden of multiple payers, providers and plans, and the cost pressures of defensive medicine. Governments in Canada know that health care is a searing financial responsibility, but they have at their disposal cost containment measures ”“ monopoly fee negotiations with providers, global budgets for hospitals ”“ that remain unfathomable in the American context.

Read it all.

1. The shutdown is unlikely to last long. In the past government shutdowns typically lasted a few days, with the most being 21 when the Republican Congress, led by Newt Gingrich, took on Bill Clinton in 1995.

This stance defies logic. If the reform law is so flawed, why not try to make it better? Why not wait till the law takes full effect and its failure becomes obvious, at which point it could be repealed through less destructive means””without endangering the entire economy?

Read it all.

The good news is that so far, all we have is political posturing. History suggest that nothing happens until at least 12 hours after our September 30th midnight deadline. No one gets serious about any sort of deal before noon on October 1. At that point, political pressure on the House Republicans ”” from constituents, from Business leaders, and from elder statesmen ”” will start in earnest. A few days later, it can become more intense. We see the same sort of patterns with the debt ceiling limit as well (that’s schedule to hit at midnight October 17).

As NBC’s Pete Williams have reported, we have had 17 prior government shutdowns over the past 40 years, including 21 days in 1995 (table below). So while this feels like its new and unusual, it is actually more commonplace than most of us believe.

Read it all.

The federal government moved closer to a partial shutdown Sunday as Republican and Democratic lawmakers showed no signs of negotiating through a standoff over the implementation of President Barack Obama’s health law.

The standoff left little prospect that Congress could reach agreement on terms for funding the government by midnight Monday, when the current fiscal year expires. A shutdown would leave essential services operating but prompt federal agencies to suspend many functions and furlough hundreds of thousands of workers.

Early Sunday morning, after a late night of votes, the House passed a bill delaying the health law by one year and attached it to a plan to fund the government through Dec. 15. It also includes a provision repealing a tax on medical devices that is intended to help finance the health law. That legislation now goes back to the Senate.

Read it all.

The federal government on Sunday morning barreled toward its first shutdown in 17 years after the Republican-run House, choosing a hard line, voted to attach a one-year delay of President Obama’s health care law and a repeal of a tax to pay for it to legislation to keep the government running.

The votes, just past midnight, followed an often-angry debate, with members shouting one another down on the House floor. Democrats insisted that Republicans refused to accept their losses in 2012, were putting contempt for the president over the good of the country and would bear responsibility for a shutdown. Republicans said they had the public on their side and were acting to protect Americans from a harmful and unpopular law that had already proved a failure.

Read it all.

There’s plenty of fodder for deficit hawks in a new report from the nonpartisan Congressional Budget Office. In short, the future looks grim….

First, the good news: The CBO projects the deficit will shrink to $378 billion in 2015, or 2.1 percent of the size of the overall U.S. economy. Compared with just a few years ago when the budget gap ballooned as a result of the recession, this marks a nearly unprecedented improvement in the deficit picture. It’s a rapid decline in budget shortfalls not seen since the end of World War II. The national debt will bottom out in 2018, at 68 percent of GDP.

The bad news: From there, the picture gets decidedly less rosy. Budget deficits gradually rise, “mainly because of increasing interest costs and growing spending for Social Security and the government’s major health care programs (Medicare, Medicaid, the Children’s Health Insurance Program, and subsidies to be provided through the health insurance exchanges),” says the report. By 2038, the national debt will reach 100 percent of GDP….

Read it all and follow the link to the actual report.

President Obama on Monday called a Russian proposal for Syria to turn over control of its chemical weapons to international monitors in order to avoid a military strike a “potentially positive development,” that could represent a “significant breakthrough,” but he said he remains skeptical the Syrian government would follow through on its obligations based on its recent track record.

“Between the statements that we saw from the Russians ”” the statement today from the Syrians ”” this represents a potentially positive development,” Obama said in an interview with NBC News, according to a transcript provided by the network. “We are going to run this to ground. [Secretary of State] John Kerry will be talking to his Russian counterpart. We’re going to make sure that we see how serious these proposals are.”

Read it all.

ROFL–read it all.

Cardinal Theodore McCarrick, retired Archbishop of Washington, has said he opposes US military intervention in Syria, saying that he is “not in favour of going to war to make peace”.

“We made the mistake in Iraq. I hope we don’t make the mistake again in Syria,” he told Catholic News Service on Thursday after visiting some of the nearly half-million refugees who had fled to Jordan, Syria’s southern neighbour.

When asked what was worse, either allow Syria to use chemical weapons and do nothing or go in with limited military strikes, he quickly responded: “Neither is the proper answer.”

Read it all.

If the House voted today on a resolution to attack Syria, President Barack Obama would lose ”” and lose big.

That’s the private assessment of House Republican and Democratic lawmakers and aides who are closely involved in the process.

Read it all.

“Unfortunately, we seem to be entering another of those periods of elevated risk,” economists at Bank of America Merrill Lynch wrote last week. Researchers at RBC Capital Markets sounded even more bleak. “Just when you thought the U.S. economy was ready to break out of its lackluster 2 percent growth pace that has dominated the recovery,” they wrote, “reality hits.”

More economic turbulence would be particularly tough for poor and middle-class American workers, who are still struggling amid the historically weak growth following the recession. The typical worker’s income has fallen since the recession ended more than four years ago, and the economy, still far from full employment, is creating far more low-paying jobs than good-paying ones. Polls show that workers remain discouraged by the economic picture, with more than half believing the United States is still in recession.

Read it all.

McCain and Graham have jointly expressed concerns that a military strike should be part of a broader strategy in Syria, not simply a random attack to punish the regime.

After meeting with Obama Monday, they both said they believed the White House is developing a strategy that would weaken the regime of President Bashar Assad and boost Syrian opposition forces ”” though they said Obama has more work to do to explain this plan.

“We still have significant concerns,” McCain said, “but we believe there is in formulation a strategy to upgrade the capabilities of the Free Syrian Army and to degrade the capabilities of Bashar Assad. Before this meeting, we had not had that indication.”

Read it all.

The prospect of a U.S. military strike on Syria is putting pressure on political fault lines, and the tremors are being felt in South Carolina.

National security hawks like U.S. Sen. Lindsey Graham see a lawless world in need of American leadership and, when the cause is just, its soldiers and bombs.

The Republican Party’s emergent libertarian wing, however, represented most prominently at the moment by Sen. Rand Paul, a possible presidential candidate, emphasizes the cost of foreign wars and their effect on U.S. public relations abroad.

Read it all.

President Obama is weighing a military strike against Syria that would be of limited scope and duration, designed to serve as punishment for Syria’s use of chemical weapons and as a deterrent, while keeping the United States out of deeper involvement in that country’s civil war, according to senior administration officials.

The timing of such an attack, which would probably last no more than two days and involve sea-launched cruise missiles ”” or, possibly, long-range bombers ”” striking military targets not directly related to Syria’s chemical weapons arsenal, would be dependent on three factors: completion of an intelligence report assessing Syrian government culpability in last week’s alleged chemical attack; ongoing consultation with allies and Congress; and determination of a justification under international law.

Read it all.

That sets up one of the recurring problems in health-care policy, which is that the more you do to control costs, the more people will hate you. Insurers found this out in the 1990s, when HMOs managed to save a lot of money without doing any measurable harm to care, but the American people loathed them for it. Various provisions in the Affordable Care Act ”” or any serious cost-control effort ”” will end up proving it again.

This will present a useful test for seeing who’s serious about controlling health-care costs. Conservative economists, for instance, almost universally hate the fact that employer-provided health benefits aren’t taxed, and that public-sector workers have bargained so aggressively for generous benefits. John McCain’s 2008 health plan relied on ending the employer deduction entirely and converting it to a capped deduction for individuals ”” which is a much more violent version of this kind of change.

Read it all.