Jim Sinclair’s Commentary

The latest pseudo solution compromise on us debt from Washington.

US debt crisis: deal close to avoid default
Senate due to vote at 1800 BST on compromise thrashed out over weekend before plan passes to House of Representatives
Ewen MacAskill in Washington and agencies
guardian.co.uk ^[1], Sunday 31 July 2011 10.33 BST

Negotiations to raise the US debt ceiling and avert the country’s first ever default continued through the night on Saturday as Republicans and Democrats tried to reach a deal before markets open on Monday. Photograph: Alex Wong/Getty Images

Congress and the White House were closing in on a deal on Sunday to head off huge market falls and the prospect of America defaulting on Tuesday for the first time in its history.

The Senate is scheduled to vote around 1pm (1800 BST) on a compromise thrashed out over the weekend between the Democratic leader in the Senate, Harry Reid, and his Republican counterpart, Mitch McConnell.

McConnell, interviewed on CNN on Sunday, said: "We are very close. We had a good day yesterday. Both the president and vice-president called me … and they understand we have to come together."

The deal would then have to go to the House of Representatives, which could be more problematic given the Republican majority.

There are enough mainstream Republicans, when combined with Democrats, to pass the bill and that is likely to happen. But the Republican House speaker, John Boehner, will be uneasy about alienating the large core of hardline conservatives, mainly Tea Party sympathisers, who will probably vote against it, and may seek last-minute concessions to try to pacify them.

More… ^[2]

Jim Sinclair’s Commentary

More of the theatrics in Washington on the debt issue.

Senate Blocks Reid’s Debt Ceiling Bill
By JENNIFER STEINHAUER and CARL HULSE
Published: July 31, 2011

WASHINGTON — Last-ditch budget talks between top Congressional Republicans and President Obama continued on Sunday, as the top Senate Republican and Democrat both expressed optimism that a $3 trillion deal could be reached to avert the economic and political calamity of a potential federal default.

But without a compromise in hand, the divided Senate could not break a filibuster and went wearily into recess while the leaders resumed their search for something that could pass.

Senator Harry Reid, the majority leader, had convened the Senate at noon, then moved to a procedural vote on his own proposal for raising the debt ceiling. Senate Republicans had been filibustering that plan, which House Republicans rejected on Saturday, and the vote on breaking the filibuster fell 10 votes short of the 60 votes needed under Senate rules. Even so, Mr. Reid said before the cloture vote that he was “cautiously optimistic” that an agreement could be reached today that would make it possible for the Senate to amend his bill and gain bipartisan approval in both chambers.

But Mr. Reid said that “there are a number of issues that must be resolved.”

“Our optimism in days past has been really stomped on,” he said.

Senator Mitch McConnell of Kentucky, the Republican leader, said Sunday that he was “very close” to recommending to his members that they sign on to a debt deal with President Obama and the Democrats.

More… ^[3]