The House passed a bill Wednesday allowing the Department of Treasury to continue borrowing money to pay the principal and interest due on the nation’s debt after the limit is reached for certain purposes approved by Congress.
After Treasury Secretary Jack Lew moved the debt-ceiling deadline up to Nov. 3 last week, lawmakers have been pressed to strike a deal before the country exhausts its funds and is unable to meet its financial obligations.
In an attempt to ease the economic consequences a default would have on the country’s creditworthiness, California Republican Tom McClintock spearheaded the Default Prevention Act, allowing members to prioritize payments and ensuring Social Security recipients receive their checks.
“With this bill, we’ve taken default off the table. We know full well the consequences of missing a debt payment,” said House Ways and Means Chairman Paul Ryan . “That’s precisely why we’ve passed this bill: to make sure it never happens. This legislation is simply commonsense, and I urge the Senate to send it to the president’s desk.”
The legislation was largely condemned by the Treasury Department and Democrats for allowing members to pick and choose what bills to pay, calling instead for a clean increase to the limit.
“House Republicans have once again advanced a bill that would put our nation’s full faith and credit at risk,” said Michigan Democrat Sander Levin. “Default by any other name is default.”
The White House said Tuesday the president will veto the measure if it reaches his desk.
Lew warned Congress if the limit isn’t raised, it could have a catastrophic effect on the global economy.
House conservatives are pushing against any bill that raises the limit without the addition of spending reforms. A proposal by the Republican Study Committee that would increase the limit to $19.6 through March 2017 could hit the floor for a vote as early as Friday, The Hill reports.