Forget about raising the federal debt limit. House Republicans are proposing to ignore it altogether -- at least until May 18.
The House plans to vote Wednesday on a measure that would leave the $16.4 trillion debt limit intact but would suspend it from the time the bill passes until mid-May. The declaration that the debt ceiling “shall not apply” means that the government could continue borrowing to cover its obligations to creditors until May 18.
This approach -- novel in modern times -- would let Republicans avoid a potentially disastrous fight over the debt limit without actually voting to let the Treasury borrow more money.
The House Ways and Means Committee unveiled the measure Monday; it is scheduled for a hearing in the Rules Committee on Tuesday and to hit the House floor on Wednesday. In addition to postponing a partisan fight over the debt limit, the measure seeks to force Senate Democrats to negotiate over a formal budget resolution by mandating that lawmakers’ paychecks be held in escrow starting April 15 unless Congress adopts a comprehensive framework for spending and tax policy.
White House spokesman Jay Carney on Wednesday called the House Republicans’ plan “a very significant development in reducing the conflict over this and reducing the fear over a process that had always had the potential spinning out of control.”
Carney said the administration takes heart “from the numerous statements of Republicans leading up to this decision, the statements from Republicans who made clear it was not the right thing to do to play chicken with the full faith and credit of the United States. It’s not the right thing to do to extract demands from the president and Democratic Party.”
On future negotiations over the deficit, Carney said that “we can, as the president made clear, negotiate in good faith toward further deficit reduction.”
It was unclear early Tuesday how Senate Democrats would respond to the measure, assuming it is adopted by the House. But Sen. Charles E. Schumer (D-N.Y.) said Democrats are planning to draft a budget for the first time in nearly four years, and White House political adviser David Plouffe on Sunday welcomed the return to “regular order” after two years of careening from crisis to crisis on the budget.
The Club for Growth said Wednesday that it will not oppose suspension of the borrowing limit. “The Club for Growth will, on the other hand, strongly oppose any efforts during the upcoming debate over the continuing resolution and sequester that fail to arrest out-of-control spending and put sensible limits on the growth of government,” the group’s president, Chris Chocola, said in a statement.
The anti-tax group is influential in Republican politics, and many lawmakers fear conservative primary challenges backed by the club.
The national debt hit the $16.4 trillion limit on New Year’s Eve, according to the Treasury Department, but outgoing Treasury Secretary Timothy F. Geithner has said he could juggle the books and keep paying the nation’s bills through the end of February. By suspending the debt limit, the House measure would permit the Treasury to continue borrowing, averting a potential crisis in world financial markets. But the Treasury would only be allowed to take on enough new debt to meet the nation’s immediate needs; the measure prohibits administration officials from stocking up on extra cash while the debt limit is suspended.
The limit would kick in once again on May 19, when House leaders presume Congress will have agreed on a long-term strategy to rein in budget deficits driven to record levels by the recent recession. While the measure removes the threat of immediate crisis from a default, Congress faces other deadlines to force action on the budget. In addition to the halt in congressional paychecks, lawmakers face the imposition of sharp automatic spending cuts on March 1 and a potential government shutdown on March 27.
House Republicans plan to keep debt limit but suspend it until May
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House Republicans plan to keep debt limit but suspend it until May
