The House of Representatives voted to suspend the U.S. debtlimit until March 2015, giving a win to President Barack Obama andDemocrats in Congress who insisted that the ceiling be liftedwithout conditions.

The measure passed yesterday 221-201.

The plan goes to the Democratic-led Senate, where MajorityLeader Harry Reid said the chamber will act as soon as possible.Obama and Senate Democrats had refused to negotiate on raising thedebt limit, and U.S. companies sought assurance that the governmentwouldn't exhaust its borrowing authority.

House Minority Whip Steny Hoyer, a Maryland Democrat, said theissue comes down to whether the U.S. will make good on itsobligations to debt-holders and provide stability by boosting thelimit.

“Will America pay its bills?” Hoyer said on the House floorbefore the vote. “Will it give confidence to the businesscommunity? Will it give confidence to its own citizens? Will itindeed give confidence to the world?”

Republicans have been divided over spending issues. Fewer thanhalf of House Republicans voted last year for measures that avertedspending cuts and tax increases, assisted victims of domestic andsexual violence and provided aid for victims of Hurricane Sandy.Republicans needed Democratic votes to pass a budget deal inDecember and a farm bill last month.

Senator Ted Cruz, a Texas Republican, said he will insist onrequiring at least 60 votes to advance the debt-limit measureinstead of a simple majority of the 100 senators.

Responding to criticism that he was forcing five Republicans tojoin Democrats in passing the bill, Cruz told reporters,“Republicans in the Senate and House should stand united” to “stopdigging the debt hole deeper and deeper.”

Second-ranking Senate Democrat Dick Durbin of Illinois, askedwhether that chamber would have 60 votes to advance the measure,said, “I think so, if 60 votes are required.”

Two House Democrats, Jim Matheson of Utah and John Barrow ofGeorgia, joined most Republicans in voting against the measure.Among the 28 Republicans supporting it were Boehner of Ohio, HouseMajority Leader Eric Cantor of Virginia, Ways and Means CommitteeChairman Dave Camp of Michigan and Appropriations CommitteeChairman Hal Rogers of Kentucky.

“Our members are also very upset with the president,” Boehner,an Ohio Republican, told reporters today. “He won't negotiate. Hewon't deal with our long-term spending problems without us raisingtaxes, won't even sit down and discuss these issues. He's the onedriving up the debt.”

218 Votes

Boehner, asked whether advancing the bill was a recognition thatRepublicans lack political leverage after October's 16-day partialgovernment shutdown, said, “It's the fact that we don't have 218votes. And when you don't have 218 votes, you have nothing.”

Republicans said after the shutdown that they wouldn't againrisk breaching the debt limit and wanted to move on to other issuesafter public opinion polls largely blamed them for the impasse.House Republican leaders are emphasizing their opposition toObamacare leading up to the November election.

A suspension of the U.S. debt limit enacted by Congress inOctober expired Feb. 7. Treasury Secretary Jacob J. Lew said lastweek that borrowing authority may not last past Feb. 27.

Muted increases in Treasury bill rates this month signaled thatinvestors saw little risk that U.S. lawmakers wouldn't raise thenation's borrowing limit on time.

One-month bill rates slid to 0.05 percent from a high of 0.14percent at the beginning of the month. The rates surged as high as0.45 percent in October before lawmakers agreed to suspend the debtlimit.

Last night, Republicans said they would move a debt-limitincrease that would include benefits for military retirees. TheHouse passed the benefits proposal as a separate measure today, andthe Senate is considering a different version.

“I think it's great the speaker's bringing up a clean debtlimit,” Vice President Joe Biden said in an interview at theCapitol today after he swore in new Montana Democratic Senator JohnWalsh.

Business groups have urged Congress to raise the debt ceiling assoon as possible to assure companies that the U.S. government won'tdefault on its obligations.

The U.S. Chamber of Commerce, the country's largest businesslobbying group, said in a letter to lawmakers yesterday that quickpassage would avoid “collateral stresses so often inflicted duringsimilar episodes in recent years.”

Government Shutdown

A dispute over raising the debt limit was among the issues thatled to the shutdown in October. House Republicans tried repeatedlyto attach policy provisions curbing Obamacare and promoting theKeystone XL pipeline in exchange for raising the debt cap andfunding the government.

Senator Charles Schumer, a New York Democrat, said in astatement, “The House has come to the realization that followingthe hard right on the debt ceiling made no sense.” He said he hopedthe party would “come to the same realization on immigration.”

The speaker's move signals that, even as some Tea Party- backedlawmakers may have wanted to attach policy changes, the ranks ofsuch Republicans are dwindling, said Julian Zelizer, a historyprofessor at Princeton University.

“They're in a difficult political position,” Zelizer said. “I dothink it signals this is not a strategy they plan to continue inthe near term.”

The U.S. Congressional Budget Office reported last week that thebudget deficit this year will be the smallest as a share of theeconomy since 2007 as stronger economic growth boosts taxrevenue.

The CBO said the deficit will narrow to $514 billion this fiscalyear, or 3 percent of gross domestic product, from $680 billion in2013 before surging to $1.07 trillion in a decade.

Polls show that the issue of deficit reduction is declining as apriority for U.S. adults. A Jan. 15-19 poll by the Pew ResearchCenter found that for the first time since Obama took office, thedeficit slipped as a top item, with 63 percent of those polledsaying that closing the budget gap should be a top priority forCongress and the White House. That's down from 72 percent a yearago.

The poll of 1,504 adults had a margin of error of plus or minus2.9 percentage points.

Bloomberg News

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