Senate Approves Suspension Of Debt Ceiling Until May 19 And Attempt To Impose European-Style Austerity Through Spending Cuts

Friday, February 01, 2013 07:44
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Senate Approves Suspension Of Debt Ceiling Until May 19 And Attempt To Impose European-Style Austerity Through Spending Cuts

Tags: Congress | debt | Economic Outlook

A House measure that would suspend the debt ceiling until May 19 passed the Senate yesterday. The measure passed 64-34 and avoids a budget showdown the likes of August 2011.
 
Republicans used the passage to urge Democrats to cut spending in an American version of European austerity.

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Republicans are against raising taxes to resolve the budget issue but on May 19, the debt ceiling will automatically rise to accommodate the added spending done by the Treasury between now and that date.
 
Several amendments to the bill were rejected, including one that would have required any future increases to the debt ceiling to be fully offset by spending cuts over the next decade.
 
The sequestration portions of the fiscal cliff scenario loom ahead on March 1 and March 27.
 
Republicans are trying to use these deadlines to pressure Democrats to cut spending even more, forcing a huge down payment on the debt and extending the government’s borrowing authority.

 

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