by Mish

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.

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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

Republican Debt Ceiling Shenanigans

Now that Republicans are in control of the Executive and both Legislative houses, might it be time to address the budget deficit?

Shutdown Q & A: Unwarranted Debt Ceiling Drama, Republican Hypocrisy

At the annual Jackson Hole Federal Reserve symposium, Fed governor Jerome Powell Warns About Failure to Raise Debt Ceiling.

Deal or No Deal? ABC Says Tentative Deal to Raise Debt Ceiling Reached

I was just getting ready to make a post titled After “Angry Exchange” Reid Postpones Senate Vote on His Plan; Majority Leader Conrad Hints at Raising Revenue Measures; Compromise in the Air.

Household Debt Still Below 2008 Peak

Household Debt Summary. Household debt for the first quarter of 2016 is up $136 billion. Mortgage debt, up $120 billion, accounts for most of the gain. Student loan debt, up $29 billion, accounts for most the rest. Total household debt still below 2008 peak

China Spotlight: Capital Flight Intensifies, US Treasury Reserves Plunge, Capital Controls Increase

A reader pinged me the other day about China “dumping” US treasuries.

Is Inflation the Legacy of the Federal Reserve?

In testimony to Congress on February 27, Bernanke bragged that inflation under his and Greenspan’s watch was a mere 2% a year.

ECB Running Out of Bonds to Buy for QE

ECB rules say QE bond purchases must be weighted according to size of the economy. That means German bonds are the preferred issue.

Canada Debt frenzy About to Crash?

In contrast to a small bit of deleveraging in the US following the great recession, credit expansion in Canada went into overdrive.

Lacy Hunt on Negative Multiplier of Government Debt

In Hoisington’s Second Quarter Review (not yet posted online), Lacy Hunt takes on the widespread Keynesian belief that government spending boosts real (inflation adjusted) GDP.