Washington Update

Bipartisan Effort Extends the Debt Limit Until March 2015

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January marked the fourth time in three years that Congress faced a potential debt-limit crisis, but this time brinksmanship was avoided. By mid-February, a bipartisan effort extended the debt limit until March 2015—well beyond the upcoming November elections—and the Tea Party received a strong rebuke.  Nonetheless, conservative congressional concern now centers on the theoretically limitless federal spending that can now occur until March 2015.

If Congress had not acted to raise the official ceiling on the national debt, the United States would eventually begin defaulting on federal borrowing payments. The result, economists in both parties warned, would send shock waves through the worldwide economy, and could result in a second lowering of the U.S. credit rating.

Spurred by Tea Party loyalists, many House and Senate Republicans had insisted that any vote to raise the debt limit and increase U.S. borrowing must be accompanied by measures to lower the overall deficit as well. On the morning of the Feb. 11 House vote, House Speaker John Boehner (R-OH) announced instead that he would support a “clean bill” to raise the debt limit with no deficit reducing measures attached. It was the first time the House had voted on a stand-alone debt ceiling increase since 2009. Boehner called the decision a “lost opportunity” to try to lower the overall deficit, but conceded that he simply didn’t have the votes to tackle both issues at the same time.

The measure barely passed on party lines with 28 Republicans breaking rank. It was the lowest percentage of majority member voting for a successful bill since the House began keeping electronic records in 1991.

In the Senate, Tea Party stalwart Ted Cruz (R-TX) mounted a filibuster, holding up the vote until deficit reduction language was added. Cruz’s effort was defeated by the Senate’s old guard, including Senate Minority Leader Mitch McConnell (R-KY), who joined a handful of other Republicans and most Senate Democrats to break the Cruz filibuster. The final vote to raise the debt ceiling was far closer, passing by a narrow 55 to 43 margin.

The resolution presented a victory for Obama. “I’m pleased the Republicans and Democrats in Congress have come together to pay for what they've already spent, and remove the threat of default from our economy once and for all," Obama said in a statement after the Senate vote.

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