Debt Ceiling Stalemate Leads to Standstill in Washington, DC

“I think this passes,” Rep. Steve LaTourette (R-Ohio) said on Friday. He was referring to the revised-for-the-umpteenth time plan authored by Speaker John Boehner (R-Ohio). After discussions late into the night on Thursday, Boehner decided to assuage the tea party faction within his House Republican caucus by agreeing to include in his plan to raise the debt ceiling a provision that states that both the House and Senate must pass a Balanced Budget Amendment to the United States constitution before the debt ceiling needs to be raised again in February 2012. Facing a mutiny among his troops, Boehner had no option other than to include this provision. The Boehner plan would only raise the debt ceiling immediately through February 2012, and then have another vote on the topic in an election year.

The House passed the Boehner plan around 6 PM EST on Friday, but the plan will assuredly die in the Senate, where each and every one of the 53 Democrats has pledged to vote against it. Meanwhile, Senate Majority Leader Harry Reid (D-Nevada) is advancing his own plan to raise the debt ceiling. There are strong doubts that Reid’s plan can even pass the Senate, let alone be voted on in the House.

So what will Congress send to President Obama for his signature by August 2, Tuesday? Or will the United States default? Is August 2 the actual date when the U.S. coffers run out of money, or is the real date a few days later? These are the questions that have been consuming Washington, DC, as almost all other political and policy activity has come to a standstill in this town. Even the routine, non-political work of government agencies is being impeded because they simply cannot plan for next week, not knowing whether they will have the funds and the authority to spend any money at all.

The nation waits on its representatives with bated breath.

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CMC Meets with International Institute of Finance

CMC met with senior executives at the International Institute of Finance (IIF), which is based in Washington, DC and is a think-tank, advocacy group and networking forum in the global finance and economics space. IIF was instrumental in creating the recent bail-out plan for Greece that was accepted by the EU and its member states. IIF evinced a strong interest in working with CMC on global commodities and financial regulatory issues. CMC has also been invited to the exclusive IIF annual meeting in September 2011 in Washington, DC.

CMC Meets with International Institute of Finance

CMC met with senior executives at the International Institute of Finance (IIF), which is based in Washington, DC and is a think-tank, advocacy group and networking forum in the global finance and economics space.  IIF was instrumental in creating the recent bail-out plan for Greece that was accepted by the EU and its member states.  IIF evinced a strong interest in working with CMC on global commodities and financial regulatory issues.  CMC has also been invited to the exclusive IIF annual meeting in September 2011 in Washington, DC.

CMC Attends Speech by Shell President

CMC attended a speech delivered by Shell’s President, Marvin Odum.  The event was hosted by the U.S. Chamber of Commerce.  Mr. Odum spoke about the need for a principles-based approach to regulation, the leaps in technology being made in his industry, the importance of the Canadian oil sands, and deep-water oil drilling in the Gulf of Mexico.

In Case You Missed It…5 Articles To Read

  1. Financial Times article looks at how ETFs are reflecting global trends: rising commodity prices, Chinese growth, and budding middle class in emerging markets.
  2. General Accounting Office examines what is needed to implement the Volcker Rule .
  3. To bring the debt ceiling debate to a close, one commentary believes the markets will have to move.
  4. CME increases margin requirements on Treasuries in WSJ report
  5. Wall Street Journal explains how farm subsidies may die a natural death

 

Views From a Freshman Senator

CMC joined with our manufacturing colleagues for a sit-down with Sen. Ron Johnson (R-WI).  The freshman Senator, who is known for upsetting Sen. Russ Feingold in the 2010 election, brings a strong business background to the post.  Very focused on job creation, Sen. Johnson talked about the debt ceiling, environmental regulations, and his legislative efforts to enact a regulatory moratorium.

CMC Discussed Several Legislative and Regulatory Topics on our Members-only Policy Call

Earlier this week, on CMC’s members-only policy call, CMC staff and members discussed various legislative and regulatory topics, including joint initiatives taken by the SEC and CFTC on international swaps regulations, and conversations that the CMC is having with the CFTC on bona-fide hedging. Bona-fide hedging was the topic that members were most interested in discussing in greater detail.