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House Passes Short-term Debt Ceiling Deal


January 24, 2013


House Passes Short-term Debt Ceiling Deal

On Wednesday, the House passed the No Budget, No Pay Act of 2013 by a 141 vote margin, temporarily averting a government default for three months. The bill suspends the federal debt ceiling —a cap on the government’s overall borrowing limit—until May 18.

Once the country reaches its current debt ceiling, as it will in mid-February, Congress is required by law to approve an increase or risk defaulting on existing debt obligations. A default would result in the closing on some federal agencies, furloughing of government workers, and delays in benefits checks and health care reimbursements for programs like Social Security and Medicare. The last time the debt ceiling had to be raised in August 2011, a partisan fight broke out between congressional Republicans and the White House over pairing the increase in the borrowing limit with cuts in government funding. Though this crisis was averted, the resulting deal, known as the Budget Control Act of 2011, created the sequester that now threatens an automatic, across-the-board cut to programs like Perkins if Congress does not act before March 1.

Before Wednesday’s vote, it was not known if congressional Republicans would again insist on drastic cuts in exchange for raising the current limit, sparking concerns over the possibility of another protracted debt ceiling battle. However, the No Budget, No Pay Act does not include a requirement to cut spending and is primarily as a stopgap measure to prevent a default while allowing time for Congress and President Obama to find a long-term solution. The bill does require both the House and Senate to pass a Fiscal Year 2014 budget resolution by April 14, under the threat of suspending pay to all Members of Congress if they fail to meet that deadline. President Obama and Senate Majority Leader Harry Reid (D-NV) have given their support to the plan and will work to pass the bill in the upper chamber.

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