September 22, 2014

House to Vote on Short-Term Debt Limit Fix

  • The national debt has grown significantly in recent years due to rising annual deficits. A deficit occurs in any year the government spends more...

House Republicans have proposed a plan to remove the threat of a government default in February and eventually increase the debt limit by enough to cover federal borrowing through May 19. The plan, which the House is expected to vote on this week, would also halt pay for members of Congress if their chamber fails to approve a budget resolution by April 15.

“Before there is any long-term debt limit increase, a budget should be passed that cuts spending,” Speaker John Boehner said in discussing the plan, which emerged from a House Republican retreat in Williamsburg, Va.

Boehner and other Republicans reiterated their past criticism of Senate Democrats for failing to approve a budget resolution in the past four years. On Sunday, however, Sen. Charles E. Schumer, the No. 3 Democrat in the Senate, said Senate Democrats plan to draft a budget measure this year.

Democratic reaction to the Republican plan has been mixed. While the administration said it was “encouraged” by the plan, House Minority Leader Nancy Pelosi called it “a gimmick.” Senate Majority Leader Harry Reid’s office said the Senate would consider legislation “if the House can pass a clean debt ceiling increase to avoid default and allow the United States to meet its existing obligations.”

“The House Republicans’ plan,” says Concord Coalition Executive Director Robert L. Bixby, “shows a constructive shift of focus away from threats of default and towards the need for a budget. That should improve the chances for negotiations over a serious fiscal plan.”

Earlier last week, Concord urged elected officials to promptly raise the debt limit and then reform the debt limit process. As Concord explained in an issue brief, the debt limit has never proven to be an effective means of controlling debt.

Failure to increase the limit to pay for earlier policy decisions, however, could risk serious long-term harm to the nation. With an unnecessary crisis over the debt limit averted, Concord said, elected officials “should promptly develop a comprehensive, specific and credible plan to place our nation on a sustainable fiscal path.”