US House passes debt-ceiling rise

Written By Unknown on Kamis, 24 Januari 2013 | 20.24

23 January 2013 Last updated at 14:56 ET

The US House has passed a bill to extend the country's debt limit until May, deferring a budget debate with the White House.

The proposal, passed in a 285-144 vote, also requires lawmakers to pass a budget by mid-April or forgo pay.

Senate Majority Leader Harry Reid has said the upper chamber would quickly pass the debt-limit bill, moving it to the president for final approval.

White House spokesman Jay Carney called the vote a "welcome development".

The Obama administration said on Tuesday the president would not block a short-term extension if it passed Congress.

'No budget, no pay'

The US Treasury is approaching its $16.4tn (£10.3tn) debt limit, and Congress must allow it to borrow more money.

Wednesday's bill would extend the federal borrowing authority until 18 May.

Republicans added a clause to the bill to keep lawmakers from collecting their salaries if they do not pass a budget by 15 April.

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AAA-rating

The best credit rating that can be given to a borrower's debts, indicating that the risk of borrowing defaulting is minuscule.

The US has not passed a full budget plan in four years, instead maintaining the government's spending through a series of stop-gap bills, the latest of which is set to expire on 27 March.

"We are going to pursue strategies that will obligate the Senate to finally join the House in confronting the government's spending problem," Republican House Speaker John Boehner told lawmakers.

"The principle is simple: 'no budget, no pay."'

Republicans had previously threatened not to pass an increase in the debt limit unless it was paired with spending cuts.

But President Obama refused to negotiate, demanding that lawmakers pass an unconditional debt-limit increase.

The vote comes less than three weeks after Congress and the White House struck a last-minute deal to prevent the so-called fiscal cliff of sharp spending cuts and tax increases.

The spending cuts were the result of the last debt-ceiling stand-off. The White House and Congress are expected to clash again over the ultimate outcome of those cuts, delayed for two months.

The last debt-ceiling battle between Congress and President Barack Obama ended in July 2011, after bringing the nation close to default, resulting in a credit-rating downgrade and financial market turmoil.


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