Republicans back down on the debt ceiling: What's next?

The GOP makes a hasty retreat, but the budget negotiations are far from over

House Majority Leader Eric Cantor
(Image credit: Win McNamee/Getty Images)

In a significant retreat, House Republican leaders on Friday unveiled a plan for a three-month increase to the debt ceiling, with the condition that the House and the Senate pass a budget by April 15. The House GOP had previously demanded dollar-for-dollar spending cuts for any increase in the borrowing limit, seeking to use the threat of a debt default to extract deep concessions from President Obama. But Obama held firm, and in recent weeks pressure had mounted on the GOP — from business groups and conservative media outlets — to drop the threat, since the economic impact of a default would have been devastating, to say the least.

As part of the proposal, House Majority Leader Eric Cantor warned that members of Congress would not be paid a salary if they failed to meet the April 15 deadline. "No budget, no pay," he said in a statement. The Senate has not passed a budget in four years, while the House, led by former vice presidential candidate Paul Ryan (R-Wis.), has passed budgets with sweeping changes to the country's entitlement programs that are viewed as non-starters in the upper chamber.

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Ryu Spaeth

Ryu Spaeth is deputy editor at TheWeek.com. Follow him on Twitter.