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GOP to seek three-month extension of debt limit

Provided that the Senate passes a budget, House Republicans said they would vote to lift the debt ceiling limit for three months without offsetting spending cuts. NBC's Brian Williams reports.

 

Updated 2:26 p.m. - Republicans will act to push the deadline at which the U.S. government would default on the national debt to mid-April, demanding that Democrats pass a budget in exchange for a long-term extension in borrowing authority.

House Republicans said they will take up legislation next week to temporarily extend the debt limit for three months, past the mid-February deadline when the government, according to the Treasury, would reach its legal limit on borrowing to finance the government's obligations.

"Next week, we will authorize a three month temporary debt limit increase to give the Senate and House time to pass a budget," House Majority Leader Eric Cantor, R-Va., said. "Furthermore, if the Senate or House fails to pass a budget in that time, members of Congress will not be paid by the American people for failing to do their job. No budget, no pay."

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"We are encouraged that there are signs that congressional Republicans may back off their insistence on holding our economy hostage to extract drastic cuts in Medicare, education and programs middle class families depend on," White House press secretary Jay Carney said in response. "Congress must pay its bills and pass a clean debt limit increase without further delay."

Such a move would push the deadline for default to mid-April, around the time at which the House and Senate are typically expected to produce and pass budgets. To secure a longer-term extension in the debt ceiling, Republicans said Friday, the Senate must finally pass a budget.

"Before there is any long-term debt limit increase, a budget should be passed that cuts spending," House Speaker John Boehner, R-Ohio, told GOP lawmakers at the conclusion of their retreat, according to remarks released by his office.

Republicans have vocally criticized the Democratic-controlled Senate for failing to produce a budget in recent years, a mark of the upper chamber's unseriousness in the eyes of many conservatives. Democrats have used the two budgets authorized by House Republicans as a political cudgel against the GOP; the Senate's failure to pass a budget has been partially meant to escape similar political culpability.

"We are going to pursue strategies that will obligate the Senate to finally join the House in confronting the government’s spending problem," Boehner said. "The principle is simple: no budget, no pay."

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Republicans' new strategy cuts against a strain of thought within the GOP that suggests that default would not be as catastrophic for the economy as many experts have warned. These Republicans have argued for using the debt ceiling deadline -- and the specter of default -- as leverage to extract spending cuts or entitlement reforms from President Barack Obama.

"It is reassuring to see Republicans beginning to back off their threat to hold our economy hostage," Senate Majority Leader Harry Reid, D-Nev., said in response. "If the House can pass a clean debt ceiling increase to avoid default and allow the United States to meet its existing obligations, we will be happy to consider it."

But Republicans are facing increasing political pressure to act, and prevent default. The party's favorable/unfavorable rating was near its worst ever in Thursday's NBC News/Wall Street Journal poll following a drawn-out battle over the fiscal cliff, a political fiasco many Republicans aren't eager to repeat. And Obama gave a press conference earlier this week explicitly refuse bargaining over the debt limit.

J. Scott Applewhite / AP

Speaker of the House John Boehner, R-Ohio, right, and House Majority Leader Eric Cantor, R-Va., left, walk to a second Republican conference meeting to discuss the fiscal cliff bill passed by the Senate Monday night and now awaits a vote in the GOP-controlled House, at the Capitol in Washington on Tuesday, Jan. 1, 2013.

In recent days, high-profile Republicans had steadily backed away from the prospect of defaulting on the national debt, sending signals that they'll extend the nation's borrowing authority for at least a little while longer.

"We will raise the debt ceiling. We're not going to default on our debt," Texas Sen. John Cornyn, Republicans' No. 2 in the upper chamber, told the editorial board of the Houston Chronicle. "I will tell you unequivocally, we're not going to default."

And Rep. Paul Ryan, R-Wis., the House Budget Committee chairman and former vice presidential nominee, told reporters at House Republicans' retreat on Thursday that lawmakers were "discussing the virtue of a short term debt limit extension."

They join Republican Sens. Susan Collins of Maine and Lisa Murkowski of Alaska, in acknowledging the need for a debt ceiling increase; more and more members of the conservative media have also questioned the political wisdom behind using the debt limit as leverage in the spending debate.

What's more, traditionally GOP-friendly business groups have privately urged lawmakers against wrangling over the debt limit, which has become a factor weighing upon Republicans' strategy.

"There was serious displeasure and concern within the financial services community over the way Republicans handled the debt ceiling issue in 2011," said one business advocate tied into Republican politics. "It was the financial community that helped deliver the resources for a Republican takeover in 2010 and now House Republicans are at risk of jeopardizing their credibility with their free market allies. Cutting spending and helping the economy are not mutually exclusive, but republicans have found a way to make it seem that way in the eyes of voters."