When lawmakers return to Washington, D.C. on Monday after
their week-long recess, the U.S. Senate is expected to take up the Marketplace Fairness
Act, while the House will debate several smaller pieces of legislation—all in
lead-up to the expiration of the suspension of the debt ceiling (the suspension
expires May 18).
The U.S. Treasury Department has announced that it will once
again undertake “extraordinary measures” to provide additional headroom to
avoid default—or breaching the current debt limit. Wall Street projections show
that these extraordinary measures will delay such a default until September,
but Treasury has declined to announce a drop-dead date. In any case, Congress
must act to raise or waive the debt ceiling or risk a default on outstanding
obligations once all of the extraordinary measures are finally exhausted in
late summer or fall.
The default date is considered a
critical deadline because lawmakers have been looking to the potential threat
of default as a major driver for negotiations on budget disputes in Congress.
If potential default is delayed until after Congress’ August recess, it makes
it more likely that lawmakers will negotiate fiscal 2014 spending and raising
the debt limit at the same time. Earlier this year, it looked as if Congress
would have to deal with the debt limit before the August recess and with
spending bills in September.
Regardless of when the debt
ceiling is reached, Congressional debate will continue over whether or not the debt limit increase will move forward as part of a clean package or whether it will be
attached to further budget cuts. A new twist was added recently when the House
Ways and Means Committee approved H.R. 807, the Full Faith and Credit Act,
which would allow new borrowing above the debt ceiling to pay interest on the
debt and interest due the Social Security trust fund. The measure is expected
to be considered on the House floor the week of May 6, but it is unlikely that
the Senate will take it up.
Contact: Marilina Sanz email@example.com