Investing

U.S. House Kicks the Can on Debt Ceiling

West side view of the United States Capitol building.
Thinkstock
The U.S. House of Representatives today approved legislation that lifts the debt ceiling and allows the Treasury Department to borrow more money. The bill postpones the day of decision from sometime next month until about mid-May.

The House vote was 285 ‘for’ and 144 ‘against’, with Republicans carrying most of the load for passage. The so-called ‘No Budget. No Pay Act’ pushes out the Treasury’s borrowing authority until May 18th, at which point the ceiling would be restored to its current level of $16.394 trillion plus the borrowing between now and that date. At that point, unless the ceiling is permanently lifted, the Treasury would once again be forced to take extraordinary measures to extend the ceiling in order to avoid a default on U.S. debt.

The bill requires the House and Senate to agree to a fiscal year 2014 budget resolution by April 15th or legislators’ paychecks will be withheld until a resolution is passed or this Congressional session ends in January 2015.

The bill is generally agreed to be a concession by House Republicans that forcing the debt ceiling issue and driving the U.S. to default on its sovereign debt is a losing political strategy.

Now, the House and Senate are faced with a March 1st deadline to reach a budget resolution or the sequester will trigger $1 trillion dollars in budget cuts for fiscal 2013. And if the Congress takes no action by March 27th, the government will shut down. Same as it ever was.

Want to Retire Early? Start Here (Sponsor)

Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?

Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.

Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.