House Republicans are prepared to move a bill to raise the debt ceiling that contains a laundry list of conservative wishes, complicating prospects for a deal before an Oct. 17 deadline.
Chris Kreuger, a D.C.-based analyst for Guggenheim Partners LLC, called it a "Dear Santa" list. In exchange for a suspension of the debt limit until the end of 2014, Republicans will demand the following, according to National Review's Jonathan Strong:
- A one-year delay of the Affordable Care Act
- Instructions for tax reform, under Rep. Paul Ryan's (R-Wis.) budget
- Keystone XL Pipeline construction
- An overhaul of Dodd-Frank regulations
- More offshore oil drilling
- Means testing Medicare
- Suspending the Environmental Protection Agency's efforts to regulate carbon emissions
- Repeal of the Public Health Trust Fund
Republicans appear ready to pass a "clean" continuing resolution to keep the government funded beyond Sept. 30 once the Senate sends back its bill, even though it will be stripped of language that defunds Obamacare. The GOP's plan will be officially hashed out at a 9 a.m. meeting Thursday morning.
But the debt-ceiling fight to come looks to be even more worrisome than a potential government shutdown — and the House GOP's opening bid has done nothing to assuage fears that a deal will get done. On Wednesday, Treasury Secretary Jack Lew set a firm, drop-dead date of Oct. 17 for Congress to raise the nation's debt limit or risk default.
The White House has repeatedly said it won't negotiate over raising the debt ceiling, an effort to avoid a replay of the messy 2011 fight that ended with a downgrade of the nation's credit rating.
Guggenheim's Kreuger continues to put the odds of "technical default scenarios" at 40%.
"This list only underscores how difficult the debt ceiling raise will be to engineer," Kreuger wrote in a market commentary Thursday.
Page 2 of 2 - "What is Obama offering? Nothing. Full stop. Ultimately, something symbolic will have to be given from the White House for a raise (which will happen) but with 21 days to go we base that on nothing more than blind faith because there is no evidence to suggest that this group of politicians can get out of the box they have created."
House Republicans will look to pass their debt-ceiling bill as soon as Saturday.