Baum on Money: GOP Disapproval Soars
Good morning. The federal government is still shut down, and I'm still here to bring you your menu of daily reads.
Go ahead, I dare you
That was President Barack Obama challenging House Speaker John Boehner to hold a vote on a clean spending bill to fund the government. Boehner had said on ABC's "This Week" that he didn't have the votes. House Democrats are trying to force a vote, but even GOP centrists opposed to the shutdown antics aren’t likely to side with the Democrats, according to The Hill. Meanwhile, signs of a thaw are emerging, according to Reuters. Obama has said he will accept a short-term increase in the debt ceiling to avoid default while Senator Rob Portman, Republican of Ohio, is floating a plan to cut federal spending and reform the tax code as part of a grand bargain that would fund the government and raise the debt limit. The U.S. is too close to the cliff for that kind of long-term -- and much needed -- thinking.
Bondholders uber alles!
Felix Salmon of Reuters gets it right (IMHO) when he says the Treasury can pay bondholders first in the event Congress fails to raise the debt ceiling. I've looked into the issue several times in the last couple of years, came to the same conclusion as Salmon and did a short blog post on it yesterday. Without going into all the details, suffice it to say that absent any statutory authority preventing the Treasury secretary from prioritizing debt payments, one would have to be nuts not to. Yes, there would be an outcry from Social Security recipients, but the folks at Treasury "know that in the grand scheme of things, all Social Security beneficiaries would be much better off receiving their money in arrears than they would be if Treasury defaulted on U.S. sovereign bonds," Salmon writes.
Taking the temperature on the hustings
Just when you thought it couldn't get worse, the week-long federal government shutdown sent Republicans' disapproval ratings soaring to 70 percent, according to the latest Washington Post-ABC News poll. Fifty-one percent of those polled disapprove "strongly." The Democrats can't really brag about their 61 percent disapproval rating. Obama saw a bump in his approval ratings to 45 percent from 41 percent, but 51 percent disapprove of his handling of the budget negotiations. Wait, have they started talking about the budget yet?
Reading the tea leaves
The headline caught my eye: "Obama May Be Leaning Toward Don Kohn as Next Fed Chief." There was less to the story than meets the eye. Stanley Crouch, a contributor to Forbes, parsed the president's interview with CNBC and claims to have found evidence of the tilt toward Kohn, a 40-year veteran of the Fed. Something about the "sequence" of Obama's comments that was "most fascinating." To him, maybe. I found Crouch's "evidence" unconvincing. See for yourself.
Sneak peak at the G-20 communique
The International Monetary Fund, the World Bank and the Group of 20 industrialized countries are all meeting in Washington this week. What's on officials' minds? Why, tapering, of course. Bloomberg's Kasia Klimasinska and Simon Kennedy report that the draft of the G-20 communique will point to the withdrawal of quantitative easing as an "important risk." The draft says the global recovery is uneven and unemployment unacceptably high in many countries. Is this why they're come to Washington? Save yourselves the trip.
(Caroline Baum is a Bloomberg View columnist. Follow her on Twitter.)