On February 15, President Barack Obama signed into law legislation to raise the Federal debt limit. The measure enables the government to borrow money to pay its bills, including Social Security benefits and the salaries of Federal workers. Failure to pass the bill — which passed the House 221 to 201 and the Senate 67 to 31 — could have led to another government shutdown and a first-ever default on the U.S. debt.
Congress’s approval of the debt limit bill means that the Treasury Department is free to borrow money through March 15, 2015, and that lawmakers will not have to revisit the issue until a new Congress convenes following the 2014 elections.
Prior to the House vote, the Republican House leadership considered attaching conditions to the bill’s passage — such as the restoration of military benefit cuts and approval of the Keystone XL Pipeline. In the end, however, Speaker of the House John Boehner (OH-R) determined that the votes were not there for such a measure and opted instead to bring up a “clean” debt limit bill, even though many in his party saw the move as capitulation to the White House and congressional Democrats. In the Senate, the bill’s passage was threatened by a filibuster attempt by Senator Ted Cruz (TX-R) until the Republican leadership joined Democrats in voting to proceed to a vote.
Although many Democrats in Congress expressed hope that the bill’s passage set a precedent for clean debt limit extensions in the future, many Republicans are already discussing a strategy for addressing the next expiration of borrowing authority, in light of the possibility that they may become the Senate majority. One alternative would be a return to the Full Faith and Credit Act, which passed the House in May 2013 but was not considered by the Senate. That bill, sponsored by Representative Tom McClintock (CA-R), would authorize the Treasury Department to pay down all interest payments in the event of a debt-ceiling confrontation, thereby removing the risk of default. It would also require that U.S. debts be paid in a specific order, starting with those to Social Security recipients and holders of U.S. bonds.
On the other side of the aisle, Representative Mike Honda (CA-D) and Senators Barbara Boxer (CA-D) and Charles Schumer (NY-D) have introduced bills that would allow the President to request a debt limit increase that only a veto-proof majority in both houses of Congress could prevent — essentially shifting the responsibility to the White House.
Thus, although the debate is off the front-burner for now, both sides are preparing for a return of has become a yearly showdown over the debt limit and the long-term spending issues it involves.
For background, see the February 2010 issue of Congressional Digest on “The Deficit and the Debt,” which explains the difference between the two along with proposals to meet U.S. fiscal challenges.
