In About Face, House Republicans Offer Plan To Ignore Debt Limit Until May, A Move The White House Will Not Oppose

 
The current legal debt limit of $16.4 trillion would still be in effect but its enforcement would be suspended until the May date.
 
Such an approach is unprecedented since World War II and it will enable Republicans to avoid a politically and economically damaging fight without having to endorse a higher debt limit.
 
On May 19, the debt limit will automatically be set to a higher limit that matches the additional borrowing the Treasury will have to do between now and then.
 
With this deadline out of the way, Congress will still need to focus on a March 1 deadline that automatically enacts the fiscal cliff spending cuts and a possible government shutdown on March 27.
 
Missing either of those deadlines would be economically harmful but neither would cause the damage of a US default.

 

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