–President Obama Sends Hill Letter Seeking Final $1.2T Tranche
–House, Senate To Hold Mostly Symbolic Votes To Disappove Debt Hike
–House Vote Likely To Occur Next Week; Senate Vote The Following Week

By John Shaw

WASHINGTON (MNI) – The final spasm of last summer’s brutal debt
limit battle has begun, triggered by President Obama’s letter Thursday
seeking the final $1.2 trillion tranche of the debt ceiling increase
that was negotiated last August.

Under the debt-hike agreement, now that Obama has formally made
this request Congress has 15 days to vote on a motion to disapprove the
debt ceiling increase.

The House returns to session next week and is almost certain to
vote to disapprove the debt ceiling increase. The House passed a
disapproval motion last fall.

The Senate returns to action the week of Jan. 23 and is also
certain to vote on the disapproval resolution. However, it is very
unlikely that the Democratic-controlled Senate will pass the disapproval
motion.

Even if it did, Obama could veto the resolution. Overriding a
presidential veto would require two-thirds majorities in both the House
and Senate–a virtually inconceivable scenario.

Obama’s formal request and the congressional votes will have the
effect of increasing the current $15.2 trillion debt ceiling to $16.4
trillion, an adjustment that would delay any future debt ceiling hikes
until after the November election.

The August debt ceiling agreement triggered a $400 billion increase
in the debt ceiling which had been $14.3 trillion. Treasury sought an
additional $500 billion increase in September. The House voted to
disapprove the request, but the Senate rejected the disapproval motion
so it went forward.

Obama’s letter of request Thursday for the $1.2 trillion increase was
one sentence long and said only that the U.S. was within $100 billion of
the debt limit.

The White House said in late December that it was delaying the
release of Obama’s letter so that Congress could return in mid-January
and schedule its disapproval votes.

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

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