Markets, somehow, hold firm in face of House chaos

10/15/2013 1:27 pm EST


Jim Jubak

Founder and Editor,

Republican leadership in the House of Representatives has one more chance to tank global financial markets. And they seem to be determined to make the most of it.

After emphatically rejecting the Senate plan put together on the basis of Republican Senator Susan Collins’ (Maine) proposal, House leadership put forward its own plan that had just enough changes to Obamacare in it to earn it immediate rejection by Senate Majority Leader Democrat Harry Reid (Nevada.)

And then this morning the Republican leadership pulled its own plan apparently because of intense opposition from extremely conservative Tea Party Republicans.

“Chaos” is a charitable description of House efforts.

Still, so far, the markets haven’t panicked. As of 1 p.m. New York time the Standard & Poor’s 500 index was down just 0.15%.

The next test of the market’s so far unshakable belief that Congress will pull a deal out of its hat in time to head off a U.S. default—even if only technical and partial—sometime after the Treasury’s deadline of October 17—will come on the Senate floor. If all 100 Senators give their consent, the Senate bill could make it to the House in time for a vote that would, if successful, put off the budget and debt ceiling crises until 2014. But a single Republican objection would be enough to tie up the bill in time-consuming procedural debates and votes that would make it impossible for the bill to get to the House with enough time for a vote before the Treasury deadline.

If the Senate doesn’t deliver an outcome that rattles the market, the House will get one more shot when it will be up to House Speaker Boehner to allow a vote on the Senate bill on the House floor. The best vote counts that I’ve seen say that the Senate measure won’t win enough Republican votes to pass with a votes from that party alone. Those counts indicate that there are enough Republican and Democratic votes to pass the bill and send it to the White House for President Barack Obama’s signature.

BUT so far Speaker Boehner has refused to allow a vote unless he has enough Republican votes to pass the measure. At the moment it’s pretty clear that Boehner can’t deliver enough Republican votes to pass motherhood or apple pie

Would a continued refusal to bring the Senate bill to a vote be enough to finally ding this market?

Stay tuned.
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