The Obama administration is welcoming a move by House Republicans to vote tomorrow on raising the nation’s debt ceiling through mid-May as a “de-escalation” of the fiscal debate, White House press secretary Jay Carney says.
“The fact that House Republicans have made this decision is certainly something that we welcome,” Carney said at a briefing. It means they will “back away from the kind of brinkmanship” over the federal debt limit that creates uncertainty for companies and is harmful to the economy.
Carney said the administration still prefers a long-term extension of the nation’s debt ceiling. Still, President Barack Obama “would not stand in the way” if Congress passes the proposal.
The Treasury reached its statutory borrowing limit on Dec. 31 and is using “extraordinary” measures. Those measures will work only until mid-February to early March, Treasury Secretary Timothy Geithner said in a Jan. 14 letter to congressional leaders.
Under the House Republican plan, the government’s $16.4 trillion borrowing limit would be raised until May 19. The House suspension plan is accompanied by a caveat: Congress must adopt a budget resolution for the next fiscal year by April 15.
The debt limit has been raised periodically since its creation in 1917 during the presidency of Woodrow Wilson. Since 1960, Congress has raised or revised the limit 79 times, including 49 times under Republican presidents. The U.S. never has defaulted on its obligations.
Investors in U.S. Treasury bonds, who most directly bear the risk of a government default, haven’t shown alarm over the political fight in Washington. The 10-year yield was little changed at 1.84 percent at 11:39 a.m. New York time, according to Bloomberg Bond Trader prices.
See the full and updating report at Bloomberg.com.