Washington, DC - The US House approved, 285-144, a bill to suspend the nation's $16.4 debt ceiling through May 18 to avert a US default on its legal obligations and buy Washington more time to negotiate budget priorities.
"The bill we're passing today, (Republicans) think will give us the ability to have a debate that will last a number of months about contrasting visions and about how to fix this problem," said House Budget Chairman Paul Ryan, R-WI, "And we see this is as a very defining moment for this session of Congress and our caucus in getting a down payment on the debt crisis, on averting it."
Senate Majority Leader Harry Reid, D-NV, said Wednesday the Senate would pass the bill. The White House said Tuesday President Obama would sign it when it reaches his desk.
The short-term extension provides breathing room on a debate that threatened to rattle financial markets if Congress pushed the debate up to the early March deadline set by the Treasury Department. The debt ceiling does not authorize new spending, but rather pays for bills already accrued by the US government, on everything from Social Security benefits to salaries for the U.S. military.
In exchange for the three-month extension, Republicans will try to extract additional spending cuts from the president and congressional Democrats before another extension is required.
In the past two years, Washington has achieved about $2.5 trillion in deficit reduction measures for the next decade, but Ryan said the GOP views upcoming negotiations as a new starting point. "That was last session. We're going forward now," he said. His remarks were at a round table hosted Wednesday by The Wall Street Journal.
Obama wants a long-term extension of the nation's borrowing authority, but Republicans view the debt limit as one in a series of potential leverage points this spring the party can use to reign in spending and entitlement programs like Social Security and Medicare, in exchange for debt limit increases.
In addition, Congress must also deal with a March 1 deadline when across the board spending cuts kick in after being initially delayed in the year-end "fiscal cliff" deal, and a March 27 deadline when the current funding for the federal government runs out, raising the threat of another shutdown fight.
"These are the points we think force the kind of conversation that we're just going to have to have," Ryan said.
The House bill includes a provision that requires the House and Senate to pass respective budgets by April 15, or the salaries for the lawmakers in their chamber will be held in escrow until a budget is passed, or until the Congress ends in two years. The language was intended to put pressure on the Democratic Senate, which has not passed a budget resolution since 2009.
Reid called the provision a "gimmick," but said the Senate would agree to it. Meanwhile, Sen. Patty Murray, D-WA, who took the helm of the Senate Budget Committee this year, announced the Senate would pass a budget resolution this year. "Democrats and Republicans spent the last year laying out our budget values and priorities on the campaign trail, and the American people went to the polls and strongly endorsed the Democrats' balanced approach," Murray said.
For Democrats, balance means seeking additional sources of tax revenue to balance the budget, but congressional Republicans say they will cede no more ground on raising revenue after the taxes raised in the "fiscal cliff" deal--once again setting the two parties on a fiscal collision course.
"(The president) already got his revenues," Ryan said. Instead, Republicans announced this week their upcoming budget will achieve balance in ten years through spending cuts and reforms and without raising revenue. Ryan's previous budget did not achieve balance until 2040, meaning Republicans are eyeing much deeper spending cuts in this year's budget blueprint.