By Denny Gulino

WASHINGTON (MNI) – Secure in the knowledge that Capitol Hill
ultimately cannot withhold $1.2 trillion in additional borrowing
authority, President Obama Friday postponed his request for the increase
of the government’s debt limit.

Eager to record their votes against the inevitable increase, many
congressional Republicans had asked their Capitol Hill leadership to
press the White House to make such a vote possible and the White House
acquiesced. So a 15-day deadline will now end after Congress returns
Jan. 17, not before.

Otherwise the 15-day period would have ended Jan. 14, too soon for
any votes, further irritating many members of Congress and making the
next debt-limit battle in early 2013 even more ferocious.

While voting down the debt hike is possible, mustering the
supermajorities necessary to overturn a guaranteed presidential veto is
seen to be impossible, so President Obama is virtually certain to have
his way in this round.

The arrangement providing for a possible joint congressional
resolution of disapproval was worked out as part of the last agreement
to keep government running in early August. That followed weeks of
partisan paralysis on Capitol Hill that prompted Standard & Poor’s to
deliver its first downgrade of U.S. debt.

The U.S. Treasury will still have to make its $82 billion in
interest payments to various trust funds by the end of this year,
threatening to take it within the $100 billion cash balance boundary
that triggers the pending request. But a mild form of what has become
“extraordinary measures,” no longer as rare as they used to be, will
allow a shuffling of government accounts to keep the Treasury’s
available cash from breaching the current $15.194 trillion debt limit.

Spokesman Josh Earnest, at the Hawaii traveling White House
operation, said talks are underway with leadership in both Houses “to
determine the best timing for submission of the certification and any
subsequent votes,” a Treasury spokeswoman told reporters.

The $1.2 trillion is expected to keep government borrowing until
next December, a Treasury official had said Monday. Then the application
of the measures that can extend the cash for at least a couple more
months will kick in, setting the stage for the next real debt-limit
confrontation in the late spring of 2013.

Whether that confrontation is as fierce as the last one depends on
whether government is still divided between the two political parties,
or whether voters in November decide another configuration is more
appropriate.

** Market News International Washington Bureau: 202-371-2121 **

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