House of Representatives Passes Debt-Limit Bill
On Wednesday, January 23 the House of Representatives passed by a vote of 285 to 144 the “No Budget, No Pay Act” (H.R. 325), which would suspend the federal debt ceiling through May 18 of this year. A debt ceiling increase had not been included in the fiscal cliff legislation (The American Taxpayer Relief Act of 2012) enacted on January 2, and a confrontation between Congress and President Obama on raising the debt ceiling was expected by mid-February, when the federal government was expected to reach the limit of its borrowing authority. The Senate is expected to pass the legislation, and President Obama has said he would sign the bill.
By allowing the government to continue borrowing through May 18th, House Republicans avoid another debt-limit fight with the White House, which had hurt them politically, and hope to refocus the debate on deficit reduction and need to reduce spending levels. On March 1st, mandatory “sequester” spending cuts under the Budget Control Act of 2011 will occur. On March 27th, the continuing resolution that funds the federal government will expire. Legislation addressing both will need to be negotiated, and House Republicans intend to use both opportunities to push for spending cuts.
H.R. 325 also included a provision requiring that the Senate and House pass a budget resolution for 2014 by April 15th, or their pay would be withheld. While the House has passed yearly budgets, Senate Democratic leaders have refused to approve a budget resolution since 2009. As a result, the House and Senate have not been able to negotiate budget reconciliation agreements (which can pass the Senate without being filibustered) between the two bodies that could set limits on entitlement spending and give binding instructions to tax writing committees to fast-track comprehensive tax reform.