House leaders Monday unveiled legislation to permit the government to continue borrowing money through May 18 in order to stave off a first-ever default on U.S. obligations. It is slated for a vote Wednesday.
The measure marks a change in strategy for House Republicans, who have backed off demands that any extension of the government's borrowing authority be accompanied by stiff spending cuts.
The legislation is also aimed at prodding Senate Democrats to pass a budget after almost four years of failing to do so. It would withhold the pay of lawmakers in the House or Senate if their chamber fails to pass a budget this year. House Republicans have passed budgets for two consecutive years, but the Senate hasn't passed one since President Obama's first year in office.
The current debt limit is $16.4 trillion. The legislation does not set a specific limit; rather it would automatically increase the limit by the amount required to fund U.S. government obligations through May 18.
But that date is not a hard deadline because the Treasury would retain the limited ability to exercise so-called extraordinary measures and juggle certain accounts to buy limited additional time before a default on U.S. obligations. Such steps could buy several additional weeks beyond May 18.
The measure also contains a "no budget, no pay" provision that withholds pay for lawmakers if the chamber in which they serve fails to pass a congressional budget resolution by April 15. That's a provision designed to press the Senate to pass a budget.
On Sunday, Sen. Charles E. Schumer, New York Democrat, said the Senate would do just that and would use it to call for follow-up legislation that would raise taxes.
Under Congress' arcane budget procedures, a congressional budget resolution is a nonbinding measure that sets parameters for future legislation on agency budgets and federal benefit programs such as Medicare.
Democrats have generally reacted coolly to the three-month extension, which would take the debt limit issue off the table for several months but leave other choke points in place, including sharp, across-the-board spending cuts that would start to strike the Pentagon and domestic programs alike March 1 and the possibility of a partial government shutdown with the March 27 expiration of a temporary budget measure.
But failing to meet those deadlines would have far less serious consequences than defaulting on U.S. obligations to pay bondholders.