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October 04, 2013 at 08:13 AM
Congress and the Obama administration are “moving away” from defaulting on the nation’s debt, with a “mini-grand bargain” in the works, Judd Gregg, CEO of the Securities Industry and Financial Markets Association, said Friday.
On a conference call with reporters, Gregg, a former Republican senator of New Hampshire, said that both House Speaker John Boehner, R-Ohio, and the Obama administration are hopeful for a deal “where they wrap up a continuing resolution” that will likely also include an entitlement and tax reform package. “They just need to get in a room and work out the details,” Gregg said.
As SIFMA notes, Treasury has approximately $370 billion in debt coming due between late October and Nov. 15. “Normal procedure would be to roll over this debt,” SIFMA said, “but debt ceiling risks include higher interest rates and limited auction participation in rollover auctions.”
Indeed, political strategists echoed Gregg’s views and are also optimistic that the tide is turning toward a deal to raise the debt ceiling and reopen the government.
In his Friday commentary, Greg Valliere of Potomac Research said Boehner was “beginning to cave,” conceding that “Obamacare can’t be stopped or altered” and that he has also ruled out a “default crisis.”
After getting an “earful” from Republicans back home, Valliere said, Boehner and other Republicans will now resort to a new tactic: “de-emphasize opposition to Obamacare and instead seek a deficit reduction deal, perhaps combined with a softening of the hated budget sequester.”
Indeed, Valliere added that there was “a growing buzz in Washington about a possible bargain,” not a “grand compromise” but rather one “that would be more like a down payment on entitlement and tax reform.”
