Three-month debt ceiling fix likely to become law
House lawmakers approved on Jan. 23 a short-term solution to the debt limit and the Senate and White House have signaled it is likely to pass and be signed into law.
In a 285-144 vote, the House passed H.R. 325, which would extend the country's borrowing ability to pay for items that come due by May 18 by suspending the enforcement of the debt limit and setting it to the level achieved at the start of May 19.
It will next go to the Senate where Majority Leader Harry Reid (D-Nev.) said it will likely be passed.
"The middle class has been telling us they do not want another crisis, and this bill gives them the security they deserve," said Reid. A spokesperson from Reid's office confirmed the senator said his caucus would accept the bill as is.
The White House has said that President Obama will sign the bill if it reaches his desk. While White House Press Secretary Jay Carney said in his Jan.23 press briefing the bill represents a fundamental change in Republican strategy and agreed with the move away from a potential default. "This is a welcome development," he added.
The bill is a short-term fix that will buy lawmakers another roughly six months to find a more permanent solution to the debt ceiling--this covers the extension as well as the "extraordinary measures" the Treasury Department can take.
Simon Johnson, a professor of entrepreneurship at MIT, told (.pdf) a House Ways and Means hearing that temporary fixes for U.S. debt may "prove destabilizing both at home and around the world" and that the private sector would be greatly damaged through repeated short-term measures.
In the floor debate, Republicans tended to speak more about the bill's caveat that Senate or House members will have their pay hold in escrow if they do not adopt a budget by April 15, than discuss any potential for default.
On the floor, some Democrats argued that the bill is unconstitutional because, they said, it violates the 27th Amendment which says no law varying the compensation of Senators and Representatives can go into effect until after the next election of representatives.