House Passes Short-Term Debt Limit Extension
Update: The Bipartisian Policy Center has created an interactive debt ceiling timeline, which can be found here.
Today the House passed a temporary suspension of the debt ceiling, avoiding a potential default, by a 285-144 vote, which the White House has announced it will sign when passed by the Senate. As we explained yesterday, the bill would suspend the debt limit until it is reinstated on May 19, at which point it would increase the debt limit by the amount of debt needed to cover outstanding obligations while the limit was suspended.
While the bill is worded to prevent Treasury from issuing an excess amount of debt and building up a surplus to further delay the debt ceiling from coming into play, it was initially unclear whether Treasury would be allowed to undo the extraordinary measures it has undertaken so far. However, it now appears that the Treasury Department will be able to delay the absolute deadline past May 19.
The Bipartisan Policy Center (BPC) has interpreted the legislation as allowing the extraordinary measures to be unwound and returned to normal. This would give the Treasury Department the option of again using extraordinary measures to give enough headroom to delay a debt ceiling crisis through at least the end of July. Assuming this bill will pass soon, BPC estimates the debt limit to rise by approximately $450 billion to cover obligations between now and May 19.
Additionally, the House bill would temporarily withhold Members' salaries if a budget resolution was not passed by their respective chambers by April 15. This may not be an issue, however, as both House Budget Committee Chairman Paul Ryan (R-WI) and Senate Budget Chair Patty Murray (D-WA) have both announced their intention to pass a budget resolution before the deadline.