GOP Moves To Extend Borrowing Authority

Updated January 21, 2013, 4:48 p.m. ET

By JANET HOOK and DAMIAN PALETTA

WASHINGTON—House Republicans on Monday moved to extend U.S. borrowing authority until May 19, setting a timeline for the next phase of budget wrangling between the White House and Congress.

President Barack Obama was sworn in just hours ago and already the House Republicans are positioning themselves for the upcoming debt ceiling debate. WSJ's David Wessel joins The News Hub with details. Photo: Getty Images.

The bill to extend borrowing, which was introduced by GOP leaders Monday and is expected to be approved by the House on Wednesday, would suspend the debt ceiling until May 19, allowing the government to issue new debt to pay existing bills. At the end of that period, the debt limit would be increased to reflect the new amount of total debt incurred. Still, the deadline and other parameters for broader deficit-reduction efforts help flesh out last week's House GOP proposal to avert another fiscal showdown.
The $16.4 trillion debt ceiling has already been reached, and the Treasury Department has said it could run out of ways to keep paying all the government's bills by mid-February. Congress has voted to increase the debt limit dozens of times, but the debates about how to increase borrowing authority often are political, and many Republicans this year have said they would require large spending cuts in exchange for a vote to raise the borrowing limit.
House Republicans are set to meet Tuesday afternoon to discuss the bill in advance of Wednesday's vote. Rep. Tom Cole (R., Okla.), a member of the House GOP team that polls lawmakers in advance of big votes, said that a head count hasn't yet been taken but that the bill seems to enjoy wide support, including from current and former leaders of the Republican Study Committee, the party's most conservative faction.
The Senate is likely to pass the bill if the House approves it without adding any further conditions than are in it now, said a Senate Democratic leadership aide. That would postpone a confrontation over the federal debt and spending that has threatened to tie Congress in knots as early as next month.
Senate Majority Leader Harry Reid (D., Nev.) hasn't yet said how exactly he would handle the bill if it is approved by the House. Although the White House and congressional Democrats have said they would prefer a longer-term debt-limit increase, they see it as a major concession that the GOP has backed down—at least for now—from the demand that any debt increase be accompanied by comparable spending cuts.
"We don't think short-term is smart for the economy," top White House adviser David Plouffe said on "Fox News Sunday," adding, "Two or three months still has uncertainty." But he still said the offer amounted to progress.
President Barack Obama has said he won't negotiate with Congress over whether to raise the debt ceiling, saying it represents money Congress has already committed to spend.
One provision of the five-page bill is designed to advance a broader deficit-reduction effort and sets an April 15 deadline for the House and Senate to pass a formal budget. The provision specifies that if they don't, lawmakers' pay would be withheld.
Lou Fisher, a retired constitutional-law expert, said the pay provision may violate the constitutional prohibition on Congress "varying" its own pay, a measure designed to prevent lawmakers voting themselves pay increases.
House Republican leaders don't believe it is unconstitutional, a GOP aide said, because the provision withholds but doesn't change lawmakers' salary.