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,
City A.M. Reporter