Thu, Jan 24, 2013 - Page 1 News List

US Congress likely to raise debt limit amid concessions

Reuters, WASHINGTON

A measure to extend the US debt limit for nearly four months moved to a vote yesterday and the White House said the president would sign the bill if it cleared the US Congress, easing uncertainty that could have threatened the US economy.

The debt limit “suspension,” which would allow the government to borrow money until May 19, was due to come to a vote in the Republican-controlled US House of Representatives yesterday without amendments.

House Rules Committee Chairman Pete Sessions said he believed the measure would achieve “near unanimous support” from the House Republican caucus, which would guarantee its passage.

US President Barack Obama “would not stand in the way of the bill becoming law,” White House spokesman Jay Carney said earlier at a briefing. US Senate Democratic Majority Leader Harry Reid has similarly expressed approval.

The administration and some Democrats made clear on Tuesday they would prefer a longer-term reprieve from having again to seek an expansion of the nation’s borrowing capacity, but the White House welcomed movement on the contentious issue, which has financial markets worried about a self-engineered US debt default.

The US is on track to run out of room under its borrowing limit of US$16.4 trillion imposed by congress sometime between next month and early March, and a vote to suspend the debt ceiling would take the prospect of default off the table at least temporarily.

Congressional Republicans have in the past balked at raising the debt cap without securing matching or greater spending cuts in exchange, but they backed down from that stance at a policy retreat last week, preferring to shift the focus of budget battles with the White House to a March 1 date for automatic deep spending cuts and a March 27 expiration of funding for government agencies and programs.

Instead of making budget cuts a precondition for expanding US borrowing authority, the Republican bill would require both the house and senate to pass budgets by April 15, on pain of having members’ paychecks withheld should they fail to do so.

The White House cautioned that an extension only would push a debt ceiling crisis into the not-too-distant future.

“A temporary solution is not enough to remove the threat of default that Republicans in the congress have held over the economy,” the White House’s budget office said in a statement.

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