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The House suspends the debt limit: Are Republicans in the driver's seat?
The battle over the budget deficit now moves to more favorable turf for the GOP
House Speaker John Boehner and his fellow Republicans have given the Treasury permission to effectively ignore the debt ceiling until May 18.
House Speaker John Boehner and his fellow Republicans have given the Treasury permission to effectively ignore the debt ceiling until May 18. Win McNamee/Getty Images
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he House on Wednesday voted 285-144 to pass a bill that would suspend the nation's debt limit until May 18, completing the GOP's retreat from its hard-line stance that any authorization for new borrowing be accompanied by dollar-for-dollar spending cuts. The House technically did not raise the debt ceiling; instead, the bill authorizes the Treasury to effectively ignore it, a semantic maneuver that eased concern among rank-and-file Republicans who could have faced conservative anger for raising the limit without concessions from President Obama.

Included in the legislation is a provision that would require one of the chambers of Congress to pass a budget by April 15. If lawmakers fail to produce a budget, their salaries will be withheld. 

The bill is the product of careful maneuvering by Speaker John Boehner (R-Ohio), who had to convince his caucus to back down on its threat to force a debt default. Boehner stressed to House Republicans that extending the debt limit temporarily would shift the battle over the budget to more favorable turf. Specifically, over the next several weeks the GOP can renew its demands at two different points: On March 1, when $1.2 trillion in across-the-board spending cuts — know as the sequester — begins to go into effect; and on March 27, when an appropriations bill financing the government runs out. As Jake Sherman at Politico reports:

"With three deadlines practically upon us — debt limit, sequester and [fiscal year] 2013 appropriations — the [normal plan] is not an option," Boehner said Thursday morning, according to sources in the room. "That means we will have to develop a plan very quickly. The stakes are very high. That makes the discussion we are about to have very critical."

Then came the salesman: Rep. Paul Ryan (R-Wis.), a conservative with lots of credibility among the hard-core budget hawks in the room, described three options for resolving the debt standoff. The last one — and the option leading Republicans preferred — was to reorder the fiscal fights to hike the debt ceiling now, battle over government funding in March and then lift the debt cap again in the spring…

The result was widespread agreement among a fractious Republican Conference that hasn't been able to unify around much of anything over the past two years. In roughly 48 hours during a retreat in Williamsburg, Va., Republicans went from defense to offense and created more of an agenda for themselves in the 113th Congress. [Politico]

Without a doubt, a government shutdown or implementation of the sequester would be less harmful to the economy than pushing the U.S. government into default, giving the GOP more breathing room to take a strong stand. However, as part of the deal with his conservative colleagues, Boehner had to make two promises, reports Jonahan Wiseman at The New York Times:

The first was that either $110 billion in automatic, across-the-board spending cuts would go into force as scheduled in March, or equivalent cuts would have to be found. The second was that the House would produce a budget this spring that balances in 10 years — a heavy lift, considering that the past two budgets passed by the House did not get to balance for nearly 30 years. [New York Times]

In other words, Boehner has put the House in a position where it has to pass a budget that would cut spending more severely than the so-called Ryan plan, which proved to be political poison on the campaign trail. As Josh Barro at Bloomberg notes:

Last year's House budget, which Mitt Romney spent much of the fall campaign running away from, was already a political problem. It cut tax rates at the top to 25 percent, yet promised surprisingly robust revenues due to base broadening. As we saw with Romney's own tax plan, such approaches have a major problem: You can only hit your revenue targets if you raise taxes on people with moderate incomes.

The House budget also reduced the deficit by sharply restricting spending on discretionary programs, Medicaid and ObamaCare in the short term, and on Medicare and (maybe) Social Security in the longer term. [Bloomberg]

Is the House really prepared to pass a budget with so many unpopular measures? Republicans argue that forcing Democrats in the Senate to pass a budget would prove to voters that they aren't serious about cutting the deficit. In addition, the "threats of sequester and a government shutdown are serious," says Greg Sargent at The Washington Post, "and the possibility that Dems will give up significantly more in spending cuts than liberals would like is very real." 

However, the path to a GOP victory on the budget does not look easy. Unless, of course, the House GOP reaches a deal with Obama, who in the past has offered plenty of spending cuts in exchange for revenue increases.

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