UPDATE: The House voted to suspend the debt ceiling until 2015. Passage in the Senate is likely. (February 11, at 5:38 p.m.)
The U.S. once again is coming perilously close to defaulting on its debt--a statement that no business owner ever wants to hear.
Today marks the fourth day in a row that the U.S. Treasury is taking "extraordinary measures" to keep the lights on in Washington. Though the House is expected to vote on a measure to raise the nation's debt ceiling to allow for additional borrowing to help pay the U.S.'s bills, the measure will surely face plenty of pushback.
After an earlier call to attach stipulations to a bill extending the government's borrowing authority, Speaker of the House John Boehner announced Tuesday that he would bring a "clean" bill to the floor Wednesday. Instead of tying it to a measure that would reverse a cut to the pensions of military veterans, Boehner plans to offer up a straight debt-ceiling bill that would keep the government's bills paid through the end of next March.
The new proposal should win support from House Democrats--clearing the way for approval with little time to spare. The government's borrowing authority had been extended through Feb. 7. And since then, the Treasury had been going to unusual lengths, including making adjustments to accounts, to help buy the government more time. Treasury Secretary Jacob Lew has said the government could rely on this effort for roughly only 16 more days.
Swift action on the debt ceiling is a win for the U.S. economy, as it would stave off a federal government shutdown like the one that stymied Washington last fall. Not only would a quick agreement ensure federal contractors get paid, but it would also preserve the nation's credit rating and deliver much-needed certainty to business owners at a time when economic news remains mixed.
Although you should be able to rest easier, it should be noted that some Republicans will surely chafe at the move. After all, once upon a time, Boehner himself vowed to thwart any legislation that wasn't paid for with an offset in spending. And many Republicans had been relying on the bill as leverage to win accommodations.
But it seems cooler heads have prevailed. "I hope the tactic of threatening default for budget debates is over, off the table, and never to happen again,” White House National Economic Council director Gene B. Sperling said at a breakfast with reporters on Tuesday. The decision, he added, should deliver “a boost for confidence and investment in the U.S."