House Republicans agree to vote on bill to raise debt limit for 3 months 18JAN13

THE gop / tea-baggers in the House have agreed to raise the debt limit for three months. They are playing a dangerous game with our economy. The President and the US Senate would be wise not to fall into this trap which will leave the government scrambling to pass both a budget agreement and raise the debt ceiling again in mid April. There is no reason not to raise the debt ceiling for a full year and then concentrate on the business of a budget, doing so will reassure the economy and show the world we do have a functioning government. The Bold Progressive community will have to be on guard for any backroom deals that threaten government funding of the social safety net and threaten the status of Medicare and Medicaid and Social Security as well as giving in to demands to protect tax loopholes for the wealthy and to maintaining the system of corporate welfare (i.e. tax breaks and subsidies for big oil, gas, coal) and that the excessive profits of the military-industrial complex are taxed to help offset the much needed cuts in the Defense budget. This from the Washington Post.....

Video: President Obama said today in a White House press conference that he won’t negotiate with Republicans on the federal debt ceiling. Post economic policy reporter Zachary Goldfarb stops by to explain which bills the government will and will not pay if the debt ceiling isn’t raised.

By Rosalind S. Helderman and Lori Montgomery

WILLIAMSBURG, Va.— Scaling back their ambitions in the latest fight over the nation’s borrowing limit, House Republicans said Friday that they will try to pass a bill next week to raise the limit for three months. But they warned that the Senate must work with them to pass a budget deal during that time before they would agree to raise the debt ceiling for the long term.
Under the bill, Congress would increase the debt limit through mid-April — long enough, House Republicans say, to give both chambers time to pass a budget agreement. Turning up the pressure on the Senate, the measure would withhold Congress’s paychecks if either chamber fails to adopt a budget by April 15.
In a speech to House Republicans at a Virginia retreat on Friday, House Speaker John A. Boehner (R-Ohio) said that a long-term increase in the borrowing limit would require a budget deal.
“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 during the closed-door retreat at a golf resort in Williamsburg, Va. “The principle is simple: No budget, no pay.”
[Weigh in on the GOP’s proposal to raise the debt ceiling for three months in The Washington Post’s new discussion forums.]
This latest tactic indicates that Republicans are groping for a more pragmatic approach to the coming fight over the issue, which they fear will greatly damage the GOP if the government defaults. Congress needs to raise the $16.4 trillion debt ceiling by the end of February or early March or the United States will not be able to meet its obligations to its creditors.
But the strategy faces an uncertain future with President Obama and Democratic lawmakers, who fear that dragging out the debt ceiling fight into the spring would inject new and harmful uncertainty into the economy.
“The President has made clear that Congress has only two options: Pay the bills they have racked up, or fail to do so and put our nation into default,” White House spokesman Jay Carney said in a statement Friday. “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.”
A spokesman for Senate Majority Leader Harry M. Reid (D-Nev.) responded that it was “reassuring to see Republicans beginning to back off their threat to hold our economy hostage.” Spokesman Adam Jentleson said the Senate would “be happy to consider” an increase in the debt ceiling that arrives without conditions. He did not address how the Senate would treat the House’s proposal to tie member pay to the passage of a budget.
“What we’re saying is: Pass a budget. To the Senate. We’ll move the debt ceiling for the short term,” Rep. Kevin McCarthy (Calif.), the House’s third-ranking Republican, told reporters. “We’ll see what your budget is. We’ll do our budget — so we can put us on a path towards a balanced budget,” he said.
In a statement outlining the plan, House Majority Leader Eric Cantor (R-Va.) said: “This is the first step to get on the right track, reduce our deficit and get focused on creating better living conditions for our families and children. It’s time to come together and get to work.”
A senior Democratic Senate aide said the new move signals that Republicans are deeply anxious about being blamed for a default, with the businesses community ramping up pressure to take action as the February deadline approaches.
But the aide rejected the idea of a short-term increase.
“Keeping the nation’s creditors in suspense on a monthly basis about whether we are going to fulfill our obligations is no way to run a government. For our economy to grow, we need to provide more certainty,” he said.
Besides removing the immediate threat of default from the debate, a short-term debt ceiling increase would shift the spending debate to future deadlines where Republicans believe they have more leverage, including broad automatic cuts set to hit the military and domestic programs in early March and the expiration of a funding mechanism keeping the government running at the end of that month.
It would also focus new attention on the Democratic Senate’s failure to pass a budget resolution in three years.
Both chambers are required to pass non-binding budget resolutions by April 15, but the Senate has routinely not done so. Republicans argue that passing a budget is the first step toward establishing a long-term spending plan that can dent deficits over time.
They also believe the budget issue is a politically potent weapon. Ordinary Americans, they believe, understand budgets, and highlighting the Senate’s failure might finally budge poll numbers showing that the public blames House Republicans more than Democrats for two years’ worth of spending gridlock in Washington.
Senate Democrats say they believe a nonbinding budget resolution is unnecessary because the House and Senate agreed on how much to spend on government programs over the course of the next several years in the Budget Control Act. That law, passed in August 2011, was the most recent to allow a rise in the debt ceiling.
http://www.washingtonpost.com/politics/house-republicans-to-vote-on-bill-to-raise-debt-limit-for-3-months/2013/01/18/01347aa2-6190-11e2-b05a-605528f6b712_print.html