Obama will not Veto GOP Short-Term Debt Ceiling Plan
The White House said that President Barack Obama would not veto the House Republican plan to suspend the debt limit for three months. The president would not oppose the short term solution to the debt ceiling even if he thinks that the temporary solution is far from ideal.
The House plans to vote on a bill to suspend the nation’s $16.4 trillion debt limit until mid-May. That would give Congress ample time to discuss the limit. The bill requires the House and Senate to pass a budget. If either chamber failed to pass a budget, their congressional salaries would be withheld in accordance to the plan.
White House warned that the House bill introduces unnecessary complications in the Nation’s fiscal system. The administration is encouraged that the bill lifts the immediate threat of default and indicates that congressional Republicans have backed off an insistence of holding the nation’s economy hostage to get cuts in education, Medicare, and other programs that could affect middle-class families.
If Congress fails to increase the debt ceiling, the nation could default on its loans. Economists said that this scenario would have a severe economic impact. Treasury Secretary Timothy Geithner informed Congress that the Treasury is expected to reach the limit in its borrowing authority by mid-February or early March.
Republicans want to reduce spending in exchange for the increase in the nation’s debt limit. President Obama and Democrats said that there should be no conditions to the debt limit increase since it covers debt that have already racked up in Washington and not future spending.
Republicans say that tax revenue increases are not part of the discussion. It ended when Washington allowed the Bush-era tax rates to expire for the top 1 percent. The GOP said that it is only willing to talk about spending cuts as a new means of deficit reduction.