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 declare that it “shall not apply” from the date the measure passes until mid-May.
Video
President Obama said on Jan. 14 in a White House press conference that he won’t negotiate with Republicans on the federal debt ceiling. Post economic policy reporter Zachary Goldfarb explains which bills the government will and will not pay if the debt ceiling isn’t raised.
More on this story:
Aaron Blake and Sean Sullivan
THE FIX | When will the American people stop accepting stopgap measures? We could find out soon.
Zachary A. Goldfarb
He promises spending for infrastructure and education, steps to lessen income inequality.
Lori Montgomery
They plan to draft a budget blueprint that calls for significantly higher taxes on the wealthy.
Associated Press
President Obama seeks more spending amid looming fiscal deadlines.
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 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.
The House plans to vote Wednesday on a measure that would leave the $16.4 trillion debt limit intact but declare that it “shall not apply” from the date the measure passes until mid-May.
Video
President Obama said on Jan. 14 in a White House press conference that he won’t negotiate with Republicans on the federal debt ceiling. Post economic policy reporter Zachary Goldfarb explains which bills the government will and will not pay if the debt ceiling isn’t raised.
Aaron Blake and Sean Sullivan THE FIX | When will the American people stop accepting stopgap measures? We could find out soon.
Zachary A. Goldfarb He promises spending for infrastructure and education, steps to lessen income inequality.
Lori Montgomery They plan to draft a budget blueprint that calls for significantly higher taxes on the wealthy.
Associated Press President Obama seeks more spending amid looming fiscal deadlines.
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 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.