According to sources close to Speaker of the House, John Boehner, the House will propose a six-week increase to the $16.7 trillion debt limit.
This from USA Today
If there is enough support within the party, the House could vote as early as Thursday evening according to two GOP sources familiar with the plan. The sources declined to be named because the plan had not yet been endorsed by the Republican caucus.
The decision to seek approval for a short-term increase is in part because President Obama and congressional Democrats have declined to engage with House Speaker John Boehner, R-Ohio, in budget talks.
This from Fox News:
Members of the Republican Study Committee, the most conservative bloc in the House, first said Wednesday they were looking at the possibility. Their inclination is to consider a short-term increase only if there is an agreement on a broader spending framework.But the option could help buy time for lawmakers to nail down the specifics of a longer-term deal. The U.S. government is facing what the Treasury Department says is an Oct. 17 deadline to raise the nation’s debt ceiling.
Though a short-term deal would by definition be only a stopgap fix, the development Wednesday pointed to at least a sliver of possible common ground — something to potentially work toward, after nine days of a partial government shutdown during which lawmakers seemed to mostly talk past one another.
“Clearly, Republicans want to avoid default,” Rep. Kevin Brady, R-Texas, said, adding they also want to cut spending.
Thus from the Washington Post:
The plan would meet President Obama’s demand for an increase in Treasury’s borrowing authority without any legislative riders, meaning Democrats would likely support the plan and it could be signed into law. But it would set the stage for tough negotiations, possibly until Thanksgiving, over bigger fiscal matters, since the tentative plan calls for a six-week increase of the debt limit.
Advisers cautioned that Boehner’s often unruly caucus, which has repeatedly rejected leadership initiatives in the past, needs to sign off on the plan before it can advance.
Financial experts much prefer that a longer-term extension of the debt ceiling be approved, but even a brief extension would ease some of the turmoil that has been brewing on Wall Street. By the time markets closed Monday afternoon, the Dow had dropped 900 points in 14 trading days, losing almost 6 percent of its value.
What is the Debt Ceiling or Limit according to the Treasury Department:
The debt limit is the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments. The debt limit does not authorize new spending commitments. It simply allows the government to finance existing legal obligations that Congresses and presidents of both parties have made in the past.
Failing to increase the debt limit would have catastrophic economic consequences. It would cause the government to default on its legal obligations – an unprecedented event in American history. That would precipitate another financial crisis and threaten the jobs and savings of everyday Americans – putting the United States right back in a deep economic hole, just as the country is recovering from the recent recession.
Congress has always acted when called upon to raise the debt limit. Since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the debt limit – 49 times under Republican presidents and 29 times under Democratic presidents. In the coming weeks, Congress must act to increase the debt limit. Congressional leaders in both parties have recognized that this is necessary. Recently, however, a number of myths about this issue have begun to surface.