Judging by the market's reaction to the news today that congressional leaders from both sides of the aisle managed to sit down with the Donald and hammer out a deal on the looming debt limit, one would be justified in concluding that the party in charge took control of the situation and pushed the deadline well into next year. Gold down, yields down, stocks up, whoopee!
What actually happened might come as a surprise.
The dealmaker-in-chief began the meeting by immediately folding Republicans' hand – an 18-month debt limit hike – and siding with the Democrats, whose 3-month-extension-slash-Harvey-relief proposal had been panned by House Majority Leader Paul Ryan as “ridiculous” and “unworkable.” Too bad. In addition to granting them their debt ceiling wishes, the negotiations reportedly gave Democrats a seat at the table on coming legislative battles, suggesting a maximum of drama as Congress tries to get taxes, immigration and government funding all done before Christmas.
Also, this happened:
Republican leaders on the Hill were “visibly annoyed” that Ivanka Trump joined an Oval Office meeting to “say hello” during their Wednesday meeting with President Trump on a must-pass spending bill, according to reporters who spoke with an aide. [...]
According to multiple reporters, who cited an aide who has knowledge of the meeting, the leaders “careened off topic” when the president's daughter entered the president’s office near the end of the meeting.
Maybe there's something I'm missing here, but pushing the debt limit fight back three months to the eve of a major holiday as the minority party and president's family prove they can both still gum up the works does not seem to bode well for a clean fiscal outcome in December. Goldman took the opportunity to reduce its odds of a tax deal bill passing from better-than-even to 40 percent (to be fair, they also reduced their odds of a shutdown).
The point is we get to do this all over again in three months, but colder. Instead of hurricanes and nuclear war we'll have some other fresh hell(s) to worry about. God willing.
See Markets React to Debt Deal in 7 Charts [WSJ]
Trump sides with Democrats in debt limit, funding, Harvey deal [Politico]
GOP leaders 'visibly annoyed' over Ivanka visit to Oval Office: reports [The Hill]