Under pressure to avoid the threat of a government default, the US House of Representatives on January 23 approved legislation (H.R. 325) to suspend the debt ceiling until May 18. The measure would effectively postpone any confrontation over the ceiling on the national debt until after Congress deals with the scheduled implementation of the across-the-board spending cuts under the sequester on March 1 and expiration of the FY13 continuing resolution (CR) on March 27. The US Senate is expected to approve the measure, and the White House has said the President will not oppose the bill.
The House measure includes a provision that requires the House and Senate each to approve an FY14 budget resolution by April 15 or have its members face a suspension of their pay. The expressed goal is to prod the Senate to pass a budget resolution, which it has not done for four years.
Meanwhile, Senator Patty Murray (D-WA), the new chair of the Senate Budget Committee, has announced her intention to move an FY14 budget resolution. On January 24, she released a 12-page memorandum to her Democratic colleagues laying out what Congress and the Administration have already done to reduce the deficit over the past two years, as well as the consequences of the three “cliffs” still ahead: allowing the budget sequester to be implemented, not extending the CR, and not raising the debt ceiling. The memorandum calculates that Congress and the Administration have already reduced the deficit and debt by at least $2.4 trillion over the past two years, and that the “majority” of deficit reduction has come from cuts in discretionary spending. The document calls for a balance of “responsible spending cuts and additional revenue from those who can afford it most.”