Republicans advance bill to prepare for debt ceiling fight

WASHINGTON Wed Apr 24, 2013 4:52pm EDT

House Budget Chairman Paul Ryan speaks at the Conservative Political Action Conference (CPAC) at National Harbor, Maryland March 15, 2013. REUTERS/Kevin Lamarque

House Budget Chairman Paul Ryan speaks at the Conservative Political Action Conference (CPAC) at National Harbor, Maryland March 15, 2013.

Credit: Reuters/Kevin Lamarque

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WASHINGTON (Reuters) - A key committee of the House of Representatives approved a measure on Wednesday designed to make it easier for Republicans to again withhold approval of a rise in the government debt ceiling to extract spending cuts from President Barack Obama.

The government is expected to hit the limit set by Congress on its ability to borrow money by late July or early August. Without an increase in the limit - known as the debt ceiling - the United States faces the prospect of defaulting on its debts, which could shake up markets and damage the economy.

The bill, approved by the Republican-controlled House Ways and Means Committee, would seek to avoid default by requiring the U.S. Treasury to pay public bond holders - as well as beneficiaries of the government-run Social Security retirement plan - in the event Congress refuses to raise the debt ceiling.

"What this does is it removes that uncertainty and takes the threat of default off the table," Republican Representative Paul Ryan of Wisconsin said.

Ryan acknowledged after the meeting that in his view, it would also strip the White House of talking points it uses against Republican tactics in negotiating over the debt ceiling.

In previous disputes when Republicans have threatened to block an increase in the debt ceiling, the president has accused the party of jeopardizing Social Security payments and shirking its responsibility to pay the nation's bills.

While the bill may pass the Republican-dominated House, it will almost certainly fail to win approval in the Democratic-controlled U.S. Senate.

Democrats view the measure, which they call "prioritization," as a ploy designed to legitimize Republican tactics.

"Let's be clear, prioritization by any name is default," said Representative Sander Levin of Michigan, the top Democrat on the Ways and Means Committee.

A partisan battle over the debt ceiling was resolved in August, 2011 with a deal that led to the automatic, across-the board spending cuts that started to take effect on March 1. Among other things, the "sequester" made reductions in the budget of the Federal Aviation Administration that this week led to flight delays across the country.

Obama has been adamant that he will not negotiate over the debt ceiling again.

(Editing by Eric Walsh)


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