Today, the House passed a bill (HR 325) by a vote of 285-144 that would temporarily suspend enforcement of the federal debt limit, currently $16.4 trillion, through May 18, 2013. Under the provisions of the measure, on May 19, the debt limit would automatically increase to reflect the additional borrowing that took place during the suspension period, and normal enforcement of the borrowing limit would resume. The House measure also aims to restore the traditional federal budget process and pressure the Senate to take up a budget by requiring both chambers of Congress to adopt a fiscal 2014 budget resolution by April 15. If either chamber fails to meet this deadline, members of that chamber will not receive paychecks. The salary payments would be held in escrow until the end of the 113^th session of Congress in early 2015.

Senate Majority Leader Harry Reid (D-NV) stated today that the Senate will pass the House measure without any amendments. Yesterday, the White House released a “Statement of Administration Policy” indicating that the President “would not oppose” the short-term debt limit measure, even though the Administration would prefer a long-term increase in the debt limit. Without congressional action on the debt limit, the federal government is expected to run out of funds to fulfill its obligations by early March. If the short-term measure approved by the House today is enacted, it would effectively postpone debate over the debt ceiling until after two other key budget deadlines: sequestration scheduled to be triggered on March 1 and the expiration on March 27 of the continuing resolution (CR) currently funding the federal government.

Setting the stage for budget negotiations over the next couple months, House Speaker John Boehner (R-OH) yesterday told the House Republican caucus that he would seek to reduce fiscal 2013 discretionary spending from the current level of $1.047 trillion to $974 billion, or else seek substantial cuts in other spending areas such as entitlements. The Speaker also made a statement yesterday that the House will work toward a budget deal that would eliminate the deficit and balance the federal budget in 10 years. In addition, Speaker Boehner reportedly promised his caucus that the automatic spending cuts scheduled to occur on March 1 under sequestration will remain in place unless they are replaced with other spending reductions.

Links: HR 325; White House Statement