President Trump's public comments this week have made one thing crystal clear: September is going to be a very big month for the US. Congress faces a Sept. 30 deadline to pass a funding deal to avoid a shutdown, and Trump has thrown a wrench into things by demanding serious money for a border wall. But in a deadline with more serious consequences, Congress also must raise the debt ceiling around the end of September or the US could default on its debt, reports the Wall Street Journal. The issues are separate, but they're likely to get lumped together, and not much goodwill is circulating at the moment. In addition to his shutdown threat, Trump on Thursday blamed Paul Ryan and Mitch McConnell for the debt ceiling "mess." Related coverage:
- Chances of a shutdown: Flip a coin. A Goldman Sachs advisory to investors puts the odds at 50-50, but Axios has a GOP source who thinks there's a 75% chance of a shutdown: "The peculiar part is that almost everyone I talk to on the Hill agrees that it is more likely than not."
- Better odds on debt ceiling: "We're going to get the debt ceiling passed," said Treasury chief Steven Mnuchin this week, per Bloomberg. (He wants a "clean" increase with no strings attached.) At the same event in Kentucky, McConnell said there is "zero chance—no chance—we won't raise the debt ceiling. No chance.”
- Unless: Yes, the budget and the debt ceiling are separate, but because the deadlines are so close together, they could become "entangled" in negotiations, per the New York Times. For example, Bloomberg notes that House conservatives are demanding big spending cuts in return for lifting the ceiling.
- Consequences: If the ceiling isn't raised and the US defaults on its debt, it would rock financial markets around the world, explains NBC News. Also, ratings agencies could downgrade the US. At the Wall Street Journal, James Mackintosh writes that he finds "it hard to believe that the US will default," but he explains that the mere possibility is already making investors nervous.
- How we got here: The Washington Post notes that, in 2015, President Obama and Congress agreed to suspend the debt ceiling decision until March of this year, and emergency measures have extended it since then. But Mnuchin runs out of tricks next month. The story also points out the contrast in Trump's tweet about the "mess" and Mnuchin's public attempt to ease fears and notes that Trump has mocked Congress for raising the ceiling in his pre-presidential days.
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