Feb. 12 (Bloomberg) — The Senate cleared a measure suspending the U.S. debt limit for President Barack Obama's signature after Republicans dropped demands for policy conditions that in past years risked a potential default.
The 55-43 vote today will allow the U.S. to meet its obligations until at least March 15, 2015, more than four months after the November congressional election. The House of Representatives passed the legislation 221-201 yesterday.
"It appears that the things that used to be routine may be routine again," Senator Richard Durbin of Illinois, the chamber's second-ranking Democrat, said today in an interview at the Capitol before the vote. Republicans "seem to want to be on their best behavior in an election year," he said.
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This marks a victory for Obama and Democrats who refused to consider Republican demands to combine a debt-limit increase with measures such as curbing Obamacare, approving the Keystone XL pipeline or cutting federal spending.
Since Republicans took control of the House in 2011, raising the debt ceiling led to eleventh-hour showdowns that raised concerns that the government could default on its obligations. In August 2011, January 2012 and last October, the U.S. came within days of a potential lapse in its borrowing authority before Congress acted.
This time, lawmakers are sending a bill to Obama with about two weeks to spare.
Speaker Boehner
House Speaker John Boehner of Ohio and members of his leadership team were among the 28 Republicans in that chamber voting to suspend the borrowing cap. The speaker's decision to allow the vote drew ire from groups aligned with the small- government, Tea-Party wing of Republicans.
Senate Majority Leader Harry Reid praised Boehner earlier today. The speaker has "one of the most difficult jobs in Washington, especially when you look at the caucus that he has to deal with," said Reid, a Nevada Democrat.
Republicans' divisions on spending helped provoke a 16-day partial government shutdown in October. The divide weakened Boehner's negotiating position with Obama and Reid, who stuck to their refusal to consider conditions for raising the debt limit.
Senator Ted Cruz, a Texas Republican aligned with the small-government Tea Party, was a leader in last year's push to demand an end to funding for the 2010 health-care law as a condition of financing the government. That effort eventually failed.
"Republicans in the Senate and House should stand united," Cruz told reporters yesterday. "Stop digging the debt-hole deeper and deeper."
Feb. 27
A suspension of the U.S. debt limit enacted by Congress in October expired Feb. 7. Treasury Secretary Jacob J. Lew said last week that borrowing authority may not last past Feb. 27.
Rates fell on Treasury bills due on March 6, maturing after the Feb. 27 date on which Lew said the U.S. would exhaust extraordinary measures to keep under the debt limit. The rate fell by 50 percent to 0.025 basis points.
Senate passage of the debt-limit suspension would delay the need for another increase until mid-2015 because income tax payments will postpone the date when the government exhausts its borrowing authority.
Barring significant economic or fiscal policy changes, a debt-ceiling increase wouldn't be needed for "at least a few months" after the March 15 date, said Shai Akabas, associate director of economic policy at the Bipartisan Policy Center in Washington.
The bill is S. 540.
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