Speaker of the House John Boehner bangs the gavel during the first day of the 113th Congress at the Capitol in Washington January 3, 2013. REUTERS/Kevin Lamarque
By David Lawder
WASHINGTON (Reuters) - Republican leaders in the House of Representatives said they aim to pass on Wednesday a nearly four-month extension of the U.S. debt limit, to May 19.
The measure does not specify a new dollar amount but allows the government to borrow what is needed to meet its obligations during the extension period, according to legislative language released on Monday.
The proposed extension is a strategic move by House Republicans to back away from a fight over the federal debt ceiling and shift their demands to other fiscal deadlines that would not risk a devastating default on U.S. debt.
These deadlines include a March 1 launch of automatic spending cuts and a March 27 expiration of funding for government agencies and programs.
The U.S. Treasury expects to exhaust current authority to borrow money, now at $16.4 trillion, sometime between mid-February and early March.
The strategy shift, agreed last week by House Republicans at a retreat in Williamsburg, Virginia, also aims to draw the Democratic-controlled Senate into taking action to cut deficits by requiring it to pass a budget resolution by April 15.
Under the proposed legislation, if either the House or Senate fails to meet the April 15 budget deadline, lawmakers' pay would be withheld under the measure until their chamber passes a budget. If none is passed, they would eventually get paid, but not until next January 15.
The Senate has not passed a budget in nearly four years, drawing Republican complaints that it is unwilling to make tough decisions to reform costly government healthcare programs.
There is also some wiggle room in the extension to May 19, because the U.S. Treasury would be able to replenish its sources of emergency borrowing capacity. This could allow it to keep borrowing for six to eight additional weeks, pushing back a final day of reckoning to perhaps mid-July.
Top Democrats have voiced doubts about the Republican plan.
Assistant Senate Democratic leader Richard Durbin of Illinois said short-term debt-limit extensions would keep business investment plans languishing in uncertainty.
"I wish they'd stop playing games with the debt ceiling," Durbin said.
Senator Charles Schumer, another member of the Senate Democratic leadership, said on Sunday that the Senate would pass a budget, but it would contain more revenue increases.
House Republican budgets passed in each of the past two years have relied solely on deep spending cuts to entitlement programs such as Medicare and Medicaid to shrink deficits.
Obama has been reluctant to make deep cuts to these programs. In his inaugural speech he underscored their value, saying they "do not sap our initiative; they strengthen us."
The House Rules Committee is scheduled to set conditions for debate on the legislation, including rules for any amendments, at an emergency meeting on Tuesday.
(Additional reporting by Rachelle Younglai; editing by Jackie Frank and Philip Barbara)