U.S. House passes bill to suspend debt ceiling thru mid May … requires lawmakers to have pay withheld until budget is passed

Posted: January 23, 2013 in American Debt Crisis, Economy, Fiscal Cliff, U.S. Debt Crisis, United States
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Captain Rick: The House passed the “No Budget, No Pay Act,” a Republican bill that would effectively suspend the debt ceiling threat for several months.
The bill would let the Treasury Department borrow new money until mid-May so that obligations like Social Security and Medicare can be met.
In exchange, the legislation would require lawmakers in both chambers of Congress to pass a budget resolution or have their pay withheld until they do.

The vote was 285 to 144. The bill passed largely on the back of GOP support — 199 Republicans voted for it. But Democrats were needed, and 86 backed the measure.
Leading Senate Democrats said they would support the legislation because it takes the immediate threat of default off the table and divorces the debt ceiling from Republican demands for spending cuts.
President Obama will not oppose the bill if it reaches his desk, even though he would prefer a longer term debt ceiling increase.

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Here’s how the bill would work:

The proposal would suspend the debt ceiling until May 18. Treasury could continue to borrow for payments that have to be made during the suspension period and nothing else.

The debt ceiling would then be restored at its current level of $16.394 trillion plus however much Treasury borrowed during the suspension period.

After May 18, Treasury likely could again use “extraordinary measures” to stave off the prospect of default for awhile, giving Congress extra time to raise the debt ceiling. Treasury could have “sufficient funds to meet all federal financial obligations through at least the end of July.

The bill would also open a path to a longer term increase: It would require the House and Senate to each agree by April 15 to a budget resolution for fiscal year 2014.

If the House and Senate don’t meet the April 15 deadline, lawmakers’ pay would be withheld until they pass a budget resolution or until the current Congress ends in January 2015, whichever comes first.
So it’s not that lawmakers won’t get paid if they miss the deadline. Their salaries would be held in escrow and paid out at some point later.

House Republicans, in coming up with the temporary debt ceiling solution, are in essence conceding that the debt ceiling fight is not their best shot at securing spending cuts and substantive deficit reduction.

Pending Deadlines:

1: Unless Congress acts by March, the pending sequester would trigger close to $1 trillion in defense and non-defense spending cuts.
2: If lawmakers fail to act by March 27, federal funding will expire entirely and the government would be shut down until lawmakers can find some way to agree on spending and taxes for the next year or at least another few months.

Captain Rick’s Words of Caution:

Many Americans are getting sick of hearing about all of the subject of the fiscal cliff, national debt and the debt ceiling. I hold little hope for our representatives in Washington to fix America’s fixation for debt anytime soon. The above measure only kicks the problem down the road for a few months. Soon, America needs to wake up to the reality that we can not keep spending like ‘there is no tomorrow’  and cutting taxes at the same time. Democrats need to get off of their ‘high horse’ and realize that American can not keep providing money and grants for everything that ‘sounds cool’. Republicans need to get off of their ‘high horse’ and realize that taxes need to be increased to cover the costs America is facing today. Hopefully, somewhere along the line they will come together and actually agree on a balanced budget…before its too late. America still has some time left to ‘get it right’ financially while our foreign friends are still willing to invest in America… but the ‘candle is growing dim’. The continual act by our government of ‘kicking the fiscal can down the road’ philosophy must end soon, or America will be eventually be faced with an unsolvable problem of how to cope being a third world country.

If you want to learn more about the serious financial problems that face America,

CLICK: Captain Rick’s Fiscal Cliff Course 101 … The course starts at the very bottom.

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