President Obama’s attempt to wrest control of the debt limit from Congress is getting quiet praise on Wall Street.
Wall Street groups Friday are wary of weighing in on any specific piece of the White House proposal’s to stave off tax hikes and spending cuts that could trigger a recession. The last thing they want to do is to pick sides in the fight over the “fiscal cliff.”
Yet the financial community has long wanted matters concerning the debt limit to be as routine as possible, and the financial industry recognizes Obama’s proposal could accomplish that goal…
“Financial markets around the world were really spooked last year,” said Steve Bell, a former Republican Senate staffer who is now director of economic policy at the Bipartisan Policy Center. “I think they will be spooked this year if they get the feeling that a similar thing will happen.”
Bell’s group estimated that last summer’s debt limit fight will end up costing the government $18.9 billion over the 10 years as a result of heightened borrowing costs.