The House of Representatives voted overwhelmingly Wednesday to suspend the nation's debt limit until May, allowing the federal government to continue to pay its bills and removing an immediate threat to the economy as it struggles to gain strength.
The move, expected to be ratified by the Senate and signed by President Barack Obama, signaled that the government will not repeat the 2011 debt limit battle this month, a skirmish that frightened Wall Street and led to a downgrading of the nation's credit rating and could have done so again.
Several economists said Wednesday's short-term extension will help the U.S. economy, by removing the immediate threat of default and setting the stage for a calmer debate over two other clashes over federal spending — a looming automatic cut in spending called a sequester and the expiration of a continuing resolution that's financing many government operations.
"It helps because it eliminates the risk that we'd hit the debt ceiling soon," said Nigel Gault, chief U.S. economist for forecaster IHS Global Insight. "It means we can consider in a less frantic atmosphere the sequester and the CR (continuing resolution)."
But economists stressed that a short-term debt limit extension is only a bandage covering a festering long-term fiscal problem that Congress and the White House need to get a handle on to better instill confidence in the U.S economy.
Congress still faces deadlines on the automatic spending cuts scheduled to take effect March 1 and must deal with the expiration of the continuing resolution appropriations measure to keep the government operating in March.
With the passage of the so-called "No Budget, No Pay Act" by a 285-144 vote, House Republicans hoped to temporarily sidestep a potentially politically damaging fight with the White House over government default.
U.S. Rep. Carol Shea-Porter, D-N.H. initially voted "present," but later changed to "no'' and did not eleborate in a statement.
"The debt ceiling should not be tied to any political issue, no matter how desirable the goal may be," Shea-Porter said in a statement. "The markets need to believe that Congress understands that the money was spent by the United States, the money is owed by the United States, and the United States will pay its bills and meet its obligations—no strings attached, and no temporary fixes."
U.S. Rep. Annie Kuster, D-NH, voted for the measure.
"The American people did not send us here to pass last-minute, stopgap measures that create uncertainty in our economy. They sent us here to come together to reduce the deficit in a balanced, responsible way that will help create jobs and grow the economy," Kuster said. "While it's far from perfect, this bill gives Congress time to focus on coming together to pass a budget that cuts the deficit."
They also hoped to pressure Senate Democrats to pass a budget, something that the upper chamber hasn't done in four years. Senate Budget Committee Chairwoman Patty Murray, D-Wash., announced Wednesday that her committee will draft a budget blueprint this year.
Though House Democratic leaders derided the bill as a possibly unconstitutional gimmick, 86 Democrats joined 199 Republicans in voting for the measure. Only 33 Republicans crossed party lines to join 111 Democrats who voted no. Three Democrats didn't vote.
About an hour before the vote, the Democratic-controlled Senate announced that it would take up the House measure and vote on it as early as next week.
"The American people expect Congress to deal with our fiscal crisis, and the 'No Budget, No Pay Act' will help ensure that members of the Senate and House do their jobs," said U.S. Sen. Kelly Ayotte, R-NH.
Under the House bill, lawmakers agree to suspend the debt limit until mid-May without dollar-for-dollar spending cuts.