The US House of Representatives Wednesday voted to temporarily suspend the nation’s borrowing limit, removing the Debt Ceiling for now as a tool for seeking deeper spending cuts. It passed an extension of borrowing authority under the federal debt limit to May 19, to pay its bills and temporarily putting off a bigger fight over taxes and spending. The vote has put the Republican plan on a fast track to enactment after top Senate Democrats endorsed it. The 285 -144 vote lifts the government’s $16.4 trillion borrowing limit until May 19. The measure avoids for the time being a repeat of the 2011 Debt Ceiling standoff that rattled markets and resulted in a downgrade of the government’s triple-A Credit Rating. It goes to the Senate, where Majority Leader Harry Reid said lawmakers will pass the measure unchanged and send it to President Barack Obama. House Speaker John Boehner, an Ohio Republican, said during floor debate. “This is the first step in an effort to bring real fiscal responsibility to Washington.” “The premise here is pretty simple; it says that there should be no long-term increase in the debt limit until there’s a long-term plan to deal with the fiscal crisis that faces our country,” he said. Republicans plan to focus on other fiscal deadlines and say they aren’t giving up their fight for cuts to federal programs. Republicans plan to use two other approaching deadlines — the March 1 start of automatic spending cuts and the need to pass a bill to fund the government by the end of March — to extract spending reductions from Obama and congressional Democrats, reported Bloomberg. The vote on the debt ceiling would clear the way for House Republicans to focus on the debate to replace about $1.2 trillion in automatic spending cuts, half of which would come from defense. Congress delayed the start date of the automatic cuts to March 1. The measure passed today, H.R. 325, would allow the nation’s borrowing authority to automatically rise May 19 to accommodate the amount the US Treasury borrowed during the three months that the limit is suspended.
The House Debt Ceiling plan is accompanied by a prod to lawmakers on the budget. It says the House and the Senate each must adopt a budget resolution for the next fiscal year by April 15. If not, the pay for members of the chamber that doesn’t act will be withheld and placed in an escrow account until they adopt one — or, at the latest, until the end of the 113th Congress. The Obama administration said yesterday it welcomed the House measure as a de-escalation of the fiscal debate. The debt limit has been raised periodically since its creation in 1917, with Congress increasing or revising it 79 times, including 49 times under Republican presidents, since 1960. Enactment of the legislation could allow the Treasury to continue borrowing for several months and delay the need for a permanent increase in the Debt Ceiling until late summer. The bill aims to draw Senate Democrats into the debate by requiring both chambers to pass a formal budget resolution by April 15. If either the House or Senate fails to meet this deadline, lawmakers’ pay is suspended until they pass a budget. Republicans have named the bill the “No Budget, No Pay Act of 2013.”
The bill avoids an immediate threat of U.S. default by suspending limits on the government’s ability to borrow until May 19. It does not specify a dollar amount for debt ceiling increase, but allows borrowing as needed to meet federal obligations that must be paid by that date. Congress would then have to agree on a new, longer-term debt ceiling increase around that time – a deal which would not likely come without a more comprehensive deficit reduction plan. Boehner, who unveiled the short term extension plan last week, said he and fellow House Republicans were committed to passing a budget that would be balanced in 10 years, reported Reuters. According to budget experts, achieving such a goal, especially in the absence of additional tax hikes, would require massive cuts in federal spending beyond any envisioned in previous Republican-backed budgets or in the deficit-reduction plans of panels such as the bi-partisan Bowles-Simpson commission on Fiscal Responsibility and Reform. The government is currently on track for its fifth straight fiscal year with a deficit exceeding $1 trillion – a trajectory widely viewed as eventually leading to a debt downgrade. “We see this as a very defining moment for this session of Congress and our caucus on getting a down payment on the debt crisis, on averting it,” Ryan said at a media breakfast sponsored by the Wall Street Journal. How? God alone knows.
House Democrats objected, saying it was irresponsible to set short-term debt limit deadlines that would keep a cloud of uncertainty hanging over financial markets and cause volatility and higher interest rates. “This legislation sets up another Fiscal Cliff, another financial nightmare, another problem for the American people that we should avoid,” said Representative Rob Andrews, a Democrat from New Jersey.
The US lawmakers & politicians have long been debating on ways to control deficits & reduce Debts, but all that they have been doing in the end is Increase Debt. Same was the case during the Fiscal Cliff deal. The illusion of an improvising US Economy based on unlimited QE is now supported by Debt Limit to Infinity. There seems no law which is not twist-able or unbreakable for the US lawmakers & politicians to squeeze out of a tight situation. Beware of the rosy Illusions currently being seen. The US seems to be stretching all means to the maximum & may act only when circumstantially forced to. That will be the Doomsday for the US soon to come. Gold and Silver will see crazy rises as soon all hell breaks loose.
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