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House passes 3-month suspension of debt ceiling

The House voted yesterday to temporarily suspend the nation’s borrowing limit, removing the debt ceiling for now as a tool for seeking deeper spending cuts.

The measure, passed 285-144, lifts the government’s $16.4 trillion borrowing limit until May 19. It goes to the Senate, where Majority Leader Harry Reid, a Nevada Democrat, said lawmakers will pass the measure unchanged and send it to President Obama.

“The premise here is pretty simple; it says that there should be no long-term increase in the debt limit until there’s a long-term plan to deal with the fiscal crisis that faces our country,” House Speaker John Boehner, an Ohio Republican, said during floor debate. “This is the first step in an effort to bring real fiscal responsibility to Washington.”

The revised strategy eliminates the risk that House Republicans would be blamed for a default in the short term. Republicans plan to focus on other fiscal deadlines and say they aren’t giving up their fight for cuts to federal programs.

Republicans plan to use two other approaching deadlines – the March 1 start of automatic spending cuts and the need to pass a bill to fund the government by the end of March – to extract spending reductions from Obama and congressional Democrats.

The measure passed yesterday, H.R. 325, would allow the nation’s borrowing authority to automatically rise May 19 to accommodate the amount the U.S. Treasury borrowed during the three months that the limit is suspended.

Sen. Chuck Schumer, a New York Democrat, said at a news conference that while Democrats would prefer a longer debt limit increase, House Republicans’ decision “shows that the Republicans are in full-on retreat on fiscal policy.”

“They blinked,” Schumer said. “Gambling with default was never a sound plan by the Republicans.”

Still, second-ranking House Democrat Steny Hoyer of Maryland called the measure a “political gimmick” that puts off the debt-limit issue for three months so House Republicans “can continue to roil the Congress, roil our people and roil our country” with fiscal uncertainty.

Dick Durbin of Illinois, the Senate’s second-ranking Democrat, said the chamber probably won’t act before next week on the House measure.

The House debt-ceiling plan is accompanied by a prod to lawmakers on the budget. It says the House and the Senate each must adopt a budget resolution for the next fiscal year by April 15.

If not, the pay for members of the chamber that doesn’t act will be withheld and placed in an escrow account until they adopt one – or, at the latest, until the end of the 113th Congress.

Reid said the Senate plans to pass a budget this year.

The Obama administration said yesterday it welcomed the House measure as a de-escalation of the fiscal debate.

The debt limit has been raised periodically since its creation in 1917, with Congress increasing or revising it 79 times since 1960.

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