Senate Rules Committee head Roy Blunt said the ball is now in the House Republicans’ court
US Senate clears last major hurdle to raising debt ceiling• US Treasury Department says increase is needed before 2 May• Bill is ‘the quickest way to certainty for everyone’
After several key votes on Thursday night, the US Senate cleared the last major hurdle to raising the US debt ceiling.
Senate Majority Leader Mitch McConnell announced Friday that a bill had been approved by the Senate’s Rules Committee and would come to the floor for a vote on Tuesday, after several key votes taken on Thursday night.
“While we’re still in a great deal of disagreement on the longer-term issues facing our country – and work remains to be done on this and many other issues that Democrats and Republicans agree should be addressed – today is a very good day,” McConnell said in a statement.
Roy Blunt, the Republican chairman of the Senate Rules Committee, which deals with budget matters, called the bill “the quickest way to certainty for everyone.”
Senate bill (pdf)
“The federal government does not have the luxury of waiting to increase the debt ceiling,” he said. “It is clear from the constant threats to withhold funding, the collapse of negotiations at the bargaining table and the continuing potential for a default that the nation’s borrowing limit has to be increased now.”
The bill is not a “clean” debt ceiling increase, however. The legislation specifies that Congress can raise the debt ceiling under three conditions: (1) to avoid a default, (2) to adjust certain amounts of the debt that have been accrued, and (3) to make the statutory budget necessary to pay all outstanding debt.
The debt ceiling
The law states that Congress will raise the debt ceiling if it’s passed with a two-thirds majority of both chambers of Congress and signed by the president. The federal government is currently in arrears on its previous debt obligations by around $15bn. That debt will need to be covered before the US can meet its obligations to taxpayers.
As Spencer Ackerman of the Washington Independent explains:
There are other restrictions, too, on lifting the debt ceiling. This includes the prospect of a default, and something else that has quietly ballooned into a $22bn-a-year art habit for the Treasury Department: the opportunity to “hold Treasury securities that are the priority of payments in the event that the government is unable to meet all of its obligations, including payments related to Social Security, Medicare, or other mandatory programs, payments due to contractors, interest on the federal debt, and payments under the Civil Service Retirement and Disability Fund.”
Democrats held unanimous support for the bill, while Republicans are expected to vote against it.
A number of Republicans have opposed raising the debt ceiling. House Freedom Caucus member Jim Jordan (R-Ohio) has previously spoken out against raising the debt ceiling, calling the bill a “sham.”
Other House Republicans have echoed House Speaker John Boehner’s opposition to raising the debt ceiling. Boehner, who has recently stepped down as speaker, said the US government would not default on its debts if there were a debt ceiling increase:
“The truth is, the government will not default on its debt. That’s not our intention. But the debt ceiling is an important tool for making sure the government doesn’t spend money it doesn’t have. That’s how the system works. That’s a process that’s been used for many years and one that is a much better process than voting up or down on a tax increase.”
Proposals for a debt limit increase to Congress and to the president have been proposed by House Republicans in recent months. Some of these proposals have included provisions that would have curbed the government’s entitlement programmes, such as Social Security and Medicare. These restrictions have been suggested as a way of justifying demands for deep cuts to government spending in exchange for lifting the debt ceiling.
One of the bill’s primary sponsors, Orrin Hatch, the Republican senator from Utah, has pushed this argument strongly in recent days. Hatch, a former senior member of the Senate Finance Committee, said this week that more federal cuts are a necessary price to pay for increasing the debt ceiling.