WASHINGTON – Forget about raising the federal debt limit: House Republicans are proposing to ignore it altogether — at least until May 18.
The House planned to vote Wednesday on a measure that would leave the $16.4 trillion borrowing limit intact but suspend it from the time the bill passes until mid-May. The declaration that the debt ceiling “shall not apply” means 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 allow the Treasury borrow more money.
The House Ways and Means Committee unveiled the measure Monday. It was submitted for a hearing in the Rules Committee on Tuesday and was slated to hit the House floor later 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 blueprint for spending and tax policy.
White House spokesman Jay Carney said Tuesday that the White House welcomes the House Republicans’ decision on the debt limit and that President Barack Obama “wouldn’t stand in the way” if the bill passed the House. “Clearly, we support extension of the debt ceiling without drama or delay. That has been his position forever — as president and since we’ve had these rather novel debates about whether or not we should engage in games of chicken over the full faith and credit of the United States,” Carney said.
The White House released a statement later in the day saying it “would not oppose a short-term solution to the debt limit and looks forward to continuing to work with both the House and the Senate to increase certainty and stability for the economy.”
The statement, from the White House Budget Office, said that although the House proposal “is a short-term measure and introduces unnecessary complications . . . the (Obama) administration is encouraged that (the bill) lifts the immediate threat of default and indicates that congressional Republicans have backed off an insistence on holding the nation’s economy hostage to extract drastic cuts in Medicare, education and other programs that middle-class families depend on.”
Senate Majority Leader Harry Reid praised the measure as “a clean debt ceiling bill” and said that “I’m glad we’re not facing crisis here in the matter of a few days.” Reid said he would meet with Senate Budget Committee Chairwoman Patty Murray to discuss the bill’s no budget, no pay provision.
“I’m happy they sent us a debt ceiling not tied to entitlement cuts and dollar for dollar (cuts),” Reid said. “That’s a big step in the right direction. The other stuff on it, Sen. Murray is going to be the spokesperson on that for the next 24 hours or so. We’ll see how she wants to proceed.”
House Minority Whip Steny Hoyer, however, blasted the Republican measure as a diversion tactic Tuesday.
Doubts about passage of the House measure were allayed Tuesday when a small but influential clutch of conservative lawmakers signaled they would support the bill, as long as top leaders keep a vow to vote soon on a 2014 budget plan that would balance the budget within the next decade.
Republican Rep. David Schweikert said Tuesday that he and others would hold the leaders to their promise. “In 90 days, this is going to be the ultimate test of the relevancy of those we entrust with those leadership positions. And I believe there’d be hell to pay if they squander this,” he said.
Schweikert and five other conservatives attending a Tuesday lunch meeting with reporters sounded lukewarm about the debt-ceiling proposal, and some said they would prefer to see the issue taken up immediately. “I can’t get to yes on this,” said Rep. Thomas Massie. “I’m going to vote on principle. And I understand the principle of the next three months, but I think that every vote you take should be on principle.”
The U.S. debt hit the $16.4 trillion limit on New Year’s Eve, according to the Treasury Department, but outgoing Treasury Secretary Timothy 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 March 1 and a potential government shutdown March 27.