Military-COLA Option Has Potential: Gardner

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Feb. 10 (Bloomberg) –- Keefe, Bruyette & Woods Senior Vice President of Washington Research Brian Gardner discusses the extraordinary measures that Speaker of the House John Boehner has to take to get the latest debt ceiling measure approved. He speaks to Mark Crumpton on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

House, as yang just said, needs democratic votes to pass any increase in borrowing authority.

To borrow a phrase from treasury secretary lou, what extraordinary measures will speaker -- will speaker boehner need to get that measure approved?

I think he will need an add-on, as yang was just alluding to.

I think the military cola is an attractive option for them.

He will discuss that at 5:30 p.m. it is a tough vote for democrats to vote against it, because you are basically voting against retirement benefits for veterans.

Given the current political situation, given any political situation, that is not a vote i think members of either party want to be engaged in and want to take.

We will see what comes out of the 5:30 p.m. meeting, but i think the military cola option has the potential to get some traction.

And for those not familiar with it, that cola option come a the cost of living increase adjustment, that was a victim above it -- of budget cuts before, wasn't it?


-- correct.

There were two pieces of the budget debate that were shut down with the funding of the government for the year and then the debt ceiling.

The debt ceiling got punted until now.

The budget got punted to january and was taking care of recently.

One of the victims in the budget agreement was the military cola item.

There were a couple of other unpopular items in their, including some other cuts.

But this was the big one.

The fact that long-term unemployment benefits were not included in that was another unpopular measure.

This one in particular stands out.

Members of both parties are willing to go along with this as an ad-on to the debt -- as an add-on to the debt ceiling bill.

Republicans may be looking for something in return for lifting the debt ceiling, this gives them political cover.

It seems to me this is one of those items that may be beneficial to both parties.

Encouraging lawmakers to act to raise the debt limit, how much pressure does this put on speaker boehner and his caucus to reach a deal?

I think beaker boehner has always felt some pressure, but there is political pressure, too, in that he wants us to be wrapped up so it does not distract republicans and the electorate from what they think is the big issue going into the fall, which is obamacare.

There are economic considerations as well as political considerations.

For boehner, he knows he's going to raise the debt ceiling, that congress is going to raise the debt ceiling.

It is how to make this the least messy process they can, so they can get back to talking about health care insurance and obamacare, which for republicans is a big winner.

There is political pressure.

Economic pressure is not as great on him, because at the end of the day he knows this will get done.

Brian gardner, joining us from our washington bureau.

We will ask you to standby.

This text has been automatically generated. It may not be 100% accurate.


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