House puts debt limit in rear-view
WASHINGTON — The House of Representatives voted overwhelmingly on Wednesday to suspend the nation's debt limit until May, allowing the federal government to continue to pay its bills and removing an immediate threat to the economy as it struggles to gain strength.
The move, expected to be ratified by the Senate and signed by President Obama, signaled that the government will not repeat the 2011 debt limit battle this month, a skirmish that frightened Wall Street and led to a downgrading of the nation's credit rating and could have done so again.
Several economists said the short-term extension will help the economy by removing the immediate threat of default and setting the stage for a calmer debate over two other clashes over federal spending — a looming automatic cut in spending called a sequester and the expiration of a continuing resolution that's financing many government operations.
“It helps because it eliminates the risk that we'd hit the debt ceiling soon,” said Nigel Gault, chief economist for forecaster IHS Global Insight. “It means we can consider, in a less frantic atmosphere, the sequester and the CR (continuing resolution).”
But economists stressed that a short-term debt limit extension is only a bandage covering a festering long-term fiscal problem that Congress and the White House need to get a handle on to better instill confidence in the economy.
Congress faces deadlines on the automatic spending cuts scheduled to take effect March 1 and must deal with the expiration of the continuing resolution appropriations measure to keep the government operating in March.
The extension prolongs the uncertainty over Washington's eventual decision on fiscal matters, said Steven Ricchiuto, chief economist for Mizuho Securities USA in New York. “There is going to be no certainty until somebody blinks here on spending and taxes,” he said.
Ricchiuto added: “It's almost as if the Republicans are taking control of the debate, but now they have to do a better PR job. What they're saying is, ‘We're being reasonable, now it's time for you to be reasonable.' ”
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- House OKs end of oil export ban adopted in 1970s in response to Arab embargo
- Dozens of terror plots disrupted in America, FBI claims
- Officials: 1 dead, 3 wounded in Northern Arizona University shooting
- McCarthy drops out as GOP speaker candidate in shocker
- Officials: Broken rail caused February W.V. train derailment
- 2 men arrested in 1984 rape, killing of girl, 14
- Longtime Mars lakes tantalize NASA scientists
- Civil servants’ pay, benefits exceed private-sector counterparts, Cato study finds
- Inmates help dying prisoners in Ohio hospice