Obama would sign short debt ceiling extension

The White House praised House Republicans for deciding to forgo a fight over raising the nation’s borrowing limit and said President Obama would likely sign a three-month extension of the debt ceiling even though he would prefer a longer-term deal.

House Republicans are set to vote on the three-month extension Wednesday, and White House spokesman Jay Carney said the president “would not stand in the way” if Congress approves the deal and it reaches his desk.

“What we saw happen last week was significant,” Mr. Carney said. “House Republicans made a decision to back away from the kind of brinksmanship that was very concerning to the markets, very concerning to business, very concerning to the American people …The fact that House Republicans made this decision is certainly something that we welcome.”

At a House GOP retreat last week, Republican leaders suggested the three-month extension as a way to de-escalate a number of budget issues all coming to a head in the next few months. Mr. Obama has repeatedly insisted he would not bargain over the debt ceiling rise, as he did in an earlier showdown in the summer of 2011 that contributed to a downgrading of the country’s AAA credit rating.

Mr. Obama would prefer a long-term debt extension, but Mr. Carney said the president believes the three-month proposal could be constructive because it “de-escalates the sense of conflict.”

The Treasury Department said the country already hit the $16.4 trillion debt ceiling at the end of the year and has since been using a series of budget gimmicks to buy time. After mid-February, however, the department said it will start running out of ways to keep the government from defaulting on its bills.

Several prominent Republicans, including Senate Minority Leader Mitch McConnell of Kentucky have pushed for the party to use the debt-ceiling limit as way to extract spending cuts from Democrats by threatening to let the country go into default.

Mr. Obama last week warned that any GOP attempt to leverage the nation’s borrowing limit for spending cuts as “irresponsible” and “absurd” because he said it would likely rock stock markets and could derail any chances for a fuller economic recovery this year.

 

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