Good news for Obama, No debt ceiling for US Debt
Northern, WI 1/24/2013 (avauncer) –The United States’ borrowing threshold has been deferred for the time being. The US House voted 285-144 for temporary removal of the debt ceiling.This vote defers the $16.4 trillion borrowing limit up to May 19. Government lawmakers will pass the bill as soon as it reaches the Senate and hand it over to President Obama.
This step was taken on the simple principle that debt-limit cannot be increased for a longer duration till the government doesn’t come up with plans to counter the US economic crisis.The Republicans stand to gain by this move as they would not be held accountable for any short-term defaults and they will have more time to concentrate on other economic problems.
The Republicans have now shifted focus to 2 other fiscal deadlines - Automatic spending reductions and the necessity of a bill to finance the government.
The White House was quoted as saying that the president wants the government to act responsibly and pay its dues timely. But the preferred action would have been a long-term increase in debt-ceiling.
The Senate will move swiftly in passing the bill to ensure that the citizens are not made to suffer another crisis.
If the budget resolution for the coming fiscal is not tabled by April 15, salaries of the members won’t be paid and will be placed in an Escrow account till they arrive at a resolution.Republican Speaker Boehner said he was optimistic in finding a middle way to a well-balanced budget.
The debt-limit has seen intermittent raises since 1917 with 79 increases which includes 49 increases by Republican presidents.
Democrat Van Hollen commented in an interview that to achieve the goal of a well-balanced budget, the Republicans will resort to cuts in Medicare benefits and educational assistance, much to the chagrin of senior citizen and students.
Emergency measures are next to nil if the need arises to prevent the debt-limit from crossing into the red.
But investors in US Treasury bonds were unperturbed by the developments even though they stand to lose most if the government defaults.
Once the issue of automatic cuts is dealt with, the House will look into the budget resolution after which it will turn to financing the government.
Republican Paul Ryan said that they wished to set up a realistic outlook and wish to compel “a big down payment on the debt crisis.”