Updated at 2:25 pm EST
The fiscal year in Washington is yielding, it appears, to the political quarter.
House Republicans plan a vote next week on a three-month extension of U.S. borrowing authority, in an attempt to force the Democratic-run Senate to adopt a federal budget.
Members of Congress won’t be paid if a budget isn’t passed by the end of the proposed three-month extension, House Majority Leader Eric Cantor said today: “This is the first step to get on the right track, reduce our deficit and get focused on creating better living conditions.”
“We are going to pursue strategies that will obligate the Senate to finally join the House in confronting the government’s spending problem,” Speaker John Boehner said in a statement today at the end of his party’s private policy retreat at a resort near Williamsburg, Virginia. “The principle is simple: no budget, no pay.”
President Barack Obama is talking about another principle: The need for the U.S. to pay the expenses it already has incurred. He said this week, in his final press conference of his first term, that he will insist on a clean increase in the debt ceiling, no strings attached.
Still, the White House appeared to find some comfort today in what the Republicans aren’t talking about.
“We are encouraged that there are signs that Congressional Republicans may back off their insistence on holding our economy hostage to extract drastic cuts in Medicare, education and programs middle class families depend on,” White House Press Secretary Jay Carney said in a statement issued this afternoon. “Congress must pay its bills and pass a clean debt limit increase without further delay. And as he has said, the president remains committed to further reducing the deficit in a balanced way.”
The Treasury Department has said the U.S. will exceed its 16.4 trillion borrowing authority sometime from mid-February to early March. Republicans are seeking a legislative strategy to meet fiscal deadlines that Congress faces in the next 90 days.
Those deadlines include the need to raise the debt ceiling. Congress will also confront in March the $110 billion in automatic spending cuts, half from defense, that were put off in the Jan. 1 tax deal. On March 27, a short-term measure that funds government agencies will also lapse, creating another potential fight.
“You can’t get out of this without passing a budget,” Rep. Kevin McCarthy, a California Republican, said in an interview today with Bloomberg Television’s “Capitol Gains” program.
The last time the Senate adopted a budget was in April 2009. The Senate and House are supposed to pass budget resolutions early each year to set a spending framework, though there is no enforcement mechanism. Without a budget resolution, appropriations bills allocate money for the federal government.
The Republicans insist they aren’t playing for a brink.
“No one is talking about default, no one wants to default,” South Carolina Republican Rep. Mick Mulvaney, who voted against the 2011 debt-ceiling deal, said in an interview today with Bloomberg Television. There is a “lot of support growing” among the rank and file for a short-term debt limit, he said.
Although the debt limit has been periodically raised since its creation in 1917 — with Congress increasing or revising it 79 times, including 49 times under Republican presidents, since 1960 — Republicans are girding for a fight with Obama and Senate Democrats over tying an increase to spending reductions.
While talk of moving in three-month increments isn’t likely to instill a lot of confidence in Congress, investors in U.S. Treasury bonds, who most directly bear the risk of a government default, haven’t shown alarm.
Yields on 10-year Treasury bonds, which ran above 5 percent in 2007, have declined steadily. The yield fell four basis points, or 0.04 percentage point, to 1.84 percent at 12:43 p.m. in New York, according to Bloomberg Bond Trader pricing.
Roxana Tiron and Jim Rowley contributed.