"THE WEEKLY WRAP" with Diane W. Collins

Treasury Secretary Geithner & Raising the Debt Ceiling: "The Boy Who Cried Wolf?"

Friday, July 1, 2011, 10:00 am, Central

Archive: Publications, Weekly Wrap





12/3/10 Simpson –Bowles vote to send report to congress fails 11-18. Shortly thereafter, Gang of Six Senators forms to work on bipartisan solution to long term debt.


1/6/11: Geithner sends letter to Harry Reid as a response to request on timing of debt ceiling limit reached and default. Said to reach default as early as March 31st to May 16th.


1/25/11: House / Senate bills filed as Full Faith and Credit – Treasury to prioritize payments to ensure there is no default.

HR 421- Rep. Tom McClintock (R-CA) 100 cosponsors
S. 163 – Sen. Pat Toomey (R-PA) 22 cosponsors


2/2 Geithner and Toomey get into it: Sen. Toomey writes Geithner saying his comments on default are false and irresponsible. Geithner responds telling Toomey he’s wrong. This is where the homeowner mortgage payment vs car, insurance, credit cards analogy starts. Which is not Toomey’s point. Toomey wants to service the debt but cut the spending programs (Andrew Stiles- National Review Toomey vs Geithner)


3/1 Toomey’s bill (now in the form of Amdt 112 attached to S.23, Patent Reform Act) is voted down along party lines 52 to 47, with one not voting.


3/8 Heritage Action issues report on “Full Faith and Credit Act” putting support behind idea that default would not come simply because the debt limit was not raised. And supported the idea of Congress requiring Treasury to prioritize with interest on the public debt first to be paid.


4/15 House passes Ryan Budget to cut 6T in spending over net 10 years (235-193)


5/3 Geithner extends debt ceiling deadline to August 2nd


5/5 VP Biden holds first Deficit meeting (2 Republicans, 4 Democrats)


5/17 Coburn “takes break” from Gang of 6 Senators


5/18 Gang of 6 Senators continues talks minus Coburn



5/26 Ryan budget fails in Senate 40 to 57; Obama FY 2012 fails 97 to 0


5/31 House votes down HR 1954, Obama’s request to increase debt ceiling by 2.4T over the existing 14.29T


6/8 FITCH: warns US of being put “on watch for downgrade by all three credit agencies” if debt ceiling not raised by 8/2 and timely and full payment of obligations including treasuries secured.


6/18 Obama- Boehner, Biden- Kasich Golf


6/21 McConnell introduces idea of short-term increase in debt limit. Both Cantor and Hoyer reject short term increase.

6/21 Sen. Kent Conrad (D-ND) part of Gang of 6 Senators, says Biden cuts aren’t enough should be more than 4T. Won’t back it.


6/22 Obama met with Boehner night of 6/22


6/23 Cantor walks out of Biden’s talks over Democrats insistence on increased taxes. Boehner supports Cantor’s decision… no new taxes.

6/23 WH Press Sec. Jay Carney – Biden talks may or may not resume. Confirms Obama met with Boehner.


6/27 Obama meets with Senate leader separately (Reid and McConnell) Biden joins.


6/28 Bloomberg Exclusive on Bipartisan Policy Ctr. Report (Jerome Powell) before release. Report reviews August cash flows from several years and projects forward for August 2011.  Report released in afternoon.


6/29 WSJ releases text of letters between DeMint and Geithner (5-23 and 6-29 respectively) Geithner clings to same lumping of payables with public debt service; Conflates; Calls point moot. Geither asks what if investors lose confidence? How does US return principle on $500B in Treasury debt maturing in August if investors choose not to roll. Later in day The Hill reports rumors Geithner will move back [X-Date] for debt… yet again.


6/30 Reuters confirms Geithner will issue “new debt ceiling guidance.” Many think date will be mid-August. Rumors Geithner will leave his post as Secretary of Treasury after debt ceiling deal reached. Obama scheduled to leave for vacation at Martha’s vineyard 8-15.


7/1 Geithner leaves [X-Date] as August 2nd.


7/5 Senate in session. Reid forced to focus on national debt crisis and takes Libya S.J.Res 20 off table when Republican block it coming to floor in order to proceed to debt crisis.

7/5 Obama invites Congressional leaders to White House for Thursday meeting to discuss debt crisis and debt ceiling.


7/6 Senate begins debt crisis debate on floor.




Contact: Representatives, Contact: Senators



Further Reading:

Treasury Secretary Geithner & Raising the Debt Ceiling: "The Boy Who Cried Wolf?"

Friday, July 1, 2011, 10:00 am, Central