Update: The House this afternoon passed their bill that would suspend the debt ceiling until the middle of May. The vote was 285-144. Senate Majority Leader Harry Reid (D-NV) said Wednesday that the Senate will pass the House’s bill; the White House has indicated it will not block the measure.
The House will consider legislation today would provide for a short-term suspension of the nation’s borrowing limit, which likely removes the threat of a government default for at least four months. House Speaker John Boehner (R-OH) has promised his members that he will work with House Budget Chair Paul Ryan (R-WI) to advance a budget that will balance the federal budget in 10 years and said the automatic spending cuts due to hit March 2nd (sequestration) will remain in place unless other reductions are made. Democrats appear to be mildly supporting the House GOP’s efforts. The White House issued a Statement of Administration Policy on Tuesday saying President Obama “would not oppose a short-term solution to the debt limit.” The House is expected to pass the bill today.
The Senate has acknowledged that the four-month suspension could buy Congress time to work out a broader bipartisan budget deal. But, as always, the devil will be in the details. It does seem all but certain that large budget cuts are coming for FY2013 – even though this fiscal year is nearly half over.
The big questions remain: will cuts come through sequestration or a more targeted approach directed by Congress, will cuts be evenly applied to defense and non-defense discretionary programs, and will cuts to discretionary spending be tempered by savings found through entitlement reform?