Congress votes to extend US borrowing limit

City A.M. Reporter
THE US House of Representatives yesterday passed a Republican plan to allow the federal government to keep borrowing money until mid-May, after the top Senate Democrat and White House endorsed it.

The vote in the Republican-controlled House drew the opposition of 111 Democrats, many of whom labeled it a negotiating gimmick that would set up a new “fiscal cliff” just weeks after the White House and Congress reached a deal to avert a package of automatic spending cuts and tax hikes.

The plan avoids for the time being a repeat of the 2011 debt ceiling standoff that rattled markets and prompted a downgrade of the government’s triple-A credit rating.

The US Treasury is expected to exhaust remaining borrowing capacity under the $16.4 trillion (£10.4 trillion) debt limit between mid-February and early March.

House Speaker John Boehner warned immediately after the vote that Republicans would take the next opportunity – automatic budget cuts set for 1 March – to demand “reforms” from President Barack Obama.

Boehner said the automatic cuts, which were temporarily delayed earlier this month, are “going to go into effect” unless Obama makes concessions,