Good morning. Here’s the news:1. The New York Times reports: “House Republican leaders on Thursday abruptly put off a vote on their proposal to raise the debt ceiling and cut government spending, throwing last-ditch efforts to avert a government default next week into disarray.”
2. The reason the vote was postponed was simple: the House Republican leadership didn’t have the votes it needed to get the so-called “Boehner plan” passed. For Mr. Boehner, “everything is on the line” in the debt ceiling fight, including his position as Speaker of the House.
3. House Republicans will caucus today at 10 a.m. Eastern time. Sometime thereafter, they will either call for a vote on the Boehner plan or push it off another day. The debt ceiling “deadline” is August 2nd.
4. Standard & Poor’s yesterday said that cutting the U.S. deficit by some $4 trillion over 10 years would be a good start, but more savings would be needed over time to bring US finances under control.
5. Gillian Tett compiles a list of five questions for the Treasury and the Fed. Three of those questions are: (1) What might the US government do to support the US money market funds if American debt is downgraded, or suffers a technical default? (2) Will the US authorities step into the markets and act as the dealer or financier of last resort, if parts of the market freeze up? (3) How will regulators and risk managers respond if the “risk-free” status of US debt starts to crumble?
6. The Financial Times reports: “Fiscal woes are again impacting markets as deadlock in the US budget negotiations combines with resurgent eurozone debt fears to batter risk-weary investors.”
7. Spain became the latest eurozone country whose credit-worthiness is now under review. Moody’s Investor Services put Spain on its “watch list” and said it was at risk for a one-notch downgrade.
8. Reuters reports: “The Spanish government will dissolve parliament on September 26 and call for general elections on November 20, sources said (this morning).”
9. The Obama Administration formally accused Iran of forging an alliance with al Qaeda that allows the terrorist group to use Iran as a conduit for moving money, arms and fighters to its bases in Pakistan and Afghanistan.
10. Rory Stewart argues that the time has come to end the war in Afghanistan. If you have time, it’s a concise and compelling speech, which was delivered at the TED conference.
11. Texas Governor Rick Perry is fast emerging as the co-frontrunner for the 2012 GOP presidential nomination. He enjoys solid support in the South, the regional and religious base of the Republican Party.
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