House Republicans seek vote to extend debt limit to May 19

WASHINGTON Mon Jan 21, 2013 7:15pm EST

Speaker of the House John Boehner bangs the gavel during the first day of the 113th Congress at the Capitol in Washington January 3, 2013. REUTERS/Kevin Lamarque

Speaker of the House John Boehner bangs the gavel during the first day of the 113th Congress at the Capitol in Washington January 3, 2013.

Credit: Reuters/Kevin Lamarque

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WASHINGTON (Reuters) - Republican leaders in the House of Representatives said they aim to pass on Wednesday a nearly four-month extension of the U.S. debt limit, to May 19.

The measure does not specify a new dollar amount but allows the government to borrow what is needed to meet its obligations during the extension period, according to legislative language released on Monday.

The proposed extension is a strategic move by House Republicans to back away from a fight over the federal debt ceiling and shift their demands to other fiscal deadlines that would not risk a devastating default on U.S. debt.

These deadlines include a March 1 launch of automatic spending cuts and a March 27 expiration of funding for government agencies and programs.

The U.S. Treasury expects to exhaust current authority to borrow money, now at $16.4 trillion, sometime between mid-February and early March.

The strategy shift, agreed last week by House Republicans at a retreat in Williamsburg, Virginia, also aims to draw the Democratic-controlled Senate into taking action to cut deficits by requiring it to pass a budget resolution by April 15.

Under the proposed legislation, if either the House or Senate fails to meet the April 15 budget deadline, lawmakers' pay would be withheld under the measure until their chamber passes a budget. If none is passed, they would eventually get paid, but not until next January 15.

The Senate has not passed a budget in nearly four years, drawing Republican complaints that it is unwilling to make tough decisions to reform costly government healthcare programs.

There is also some wiggle room in the extension to May 19, because the U.S. Treasury would be able to replenish its sources of emergency borrowing capacity. This could allow it to keep borrowing for six to eight additional weeks, pushing back a final day of reckoning to perhaps mid-July.

DEMOCRATS SKEPTICAL

Top Democrats have voiced doubts about the Republican plan.

Assistant Senate Democratic leader Richard Durbin of Illinois said short-term debt-limit extensions would keep business investment plans languishing in uncertainty.

"I wish they'd stop playing games with the debt ceiling," Durbin said.

Senator Charles Schumer, another member of the Senate Democratic leadership, said on Sunday that the Senate would pass a budget, but it would contain more revenue increases.

House Republican budgets passed in each of the past two years have relied solely on deep spending cuts to entitlement programs such as Medicare and Medicaid to shrink deficits.

Obama has been reluctant to make deep cuts to these programs. In his inaugural speech he underscored their value, saying they "do not sap our initiative; they strengthen us."

The House Rules Committee is scheduled to set conditions for debate on the legislation, including rules for any amendments, at an emergency meeting on Tuesday.

(Additional reporting by Rachelle Younglai; editing by Jackie Frank and Philip Barbara)

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Comments (4)
fromthecenter wrote:
Good idea, now let the senate come up with a budget that includes enough spending cuts so we dont have to keep borrowing more and more every year.

Jan 21, 2013 10:43pm EST  --  Report as abuse
edhalidy wrote:
Republicans are constantly getting punked by a weak kneed Marxist.
All they have to do is their job, and pass legislation, let the president veto it, or Harry Reid shelve it. They do not have to negotiate, or even talk to the president, just send bills up the line

Jan 22, 2013 12:26am EST  --  Report as abuse
Abulafiah wrote:
House Republicans seek to damage confidence in the US as much as possible.

They don’t give a damn about the USA, All they are concerned about is the GOP. This is obvious from the way they play games with the debt ceiling by trying to postpone any decision until May the 19th – because that helps the GOP politically.

Never mind how much that damages domestic business by increasing uncertainty. Never mind how much it damages the US economy because the dysfunctional congress apparently cannot fix the mess it has created itself.

May the 19th suits the GOP. That is all they care about.

Jan 22, 2013 4:22am EST  --  Report as abuse
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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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