Debt ceiling deal reached, temporarily removing threat of default from spending and revenue obligations

On Jan 23 and 31, respectively, the House and Senate passed the “No Budget, No Pay Act of 2013” to temporarily increase the nation’s debt limit until May 19. This action postpones the threat of federal government defaulting on its obligations. President Obama is expected to sign the bill. The legislation temporarily suspends the $16.4 trillion limit on federal borrowing, which will allow the government to meet obligations like Social Security benefits and government salaries. It also holds the salaries of Members of Congress in escrow if the House and Senate fail to pass a budget resolution by April 15.

The measure changes the order of major fiscal showdowns Congress faces. The debt ceiling increase now moves to the end of the series of critical budget events:

  • March 01 – Across-the-board spending cuts (“sequestration”) to take effect
  • March 27 – FY 2013 short term appropriation (“continuing resolution”) ends
  • March 30 – President Obama expected to submit FY 2014 Budget Request
  • April 15 – Deadline for House and Senate to pass FY 2014 Budget Resolution
  • May 19 – Debt ceiling increase expires

Republican leadership in the House of Representatives initiated this effort to try to force the Senate to describe its proposal to address the federal deficit. Senator Patty Murray (D-WA), the new chair of the Senate Budget Committee, had earlier announced her intention to have the Committee produce a budget resolution. Having a budget resolution passed by the Senate would mark a new starting point for negotiations on a long term deal.

The Arc will continue to advocate for the protection of disability-related entitlement and discretionary programs and for a balanced approach to deficit reduction that includes revenues during these critical budget events.