Washington - An Alternative debt limit and US government funding plan promoted by conservative Republicans in the House of Representatives could not win approval in the Democratic-controlled Senate, Harry Reid, the Senate majority leader, said yesterday.
Reid said the plan, which was discussed at a House Republican meeting yesterday morning, was “an extreme piece of legislation and it’s nothing more than a blatant attack on bipartisanship”.
The proposal would keep within several key parameters of an emerging deal that Reid is negotiating with Senate Republican leader Mitch McConnell but it would require some concessions on health reforms and add some restrictions on funding and borrowing.
The government’s borrowing authority will lapse tomorrow without a deal.
Citigroup is bracing for a possible default by avoiding some short-term Treasury investments amid what chief executive Michael Corbat called “a dangerous flirtation with the debt ceiling”.
While the bank remained hopeful about a political solution, Citigroup did not own Treasury securities that would mature in October and held few with terms ending before November 16, chief financial officer John Gerspach said.
A US default would put the financial world in “uncharted waters” and the bank was managing risks to ensure it had liquidity, Gerspach said.
They joined JPMorgan Chase chief executive Jamie Dimon and Anshu Jain, the co-chief executive at Deutsche Bank, in warning against a default. Jain told a financial industry conference at the weekend that the prospect of even a small debt default would be “utterly catastrophic” and Dimon said that the effects would ripple through the global economy. - Reuters and Bloomberg