According to a Reuters report, a legislative language released on Monday showed Republican leaders in the House of Representative are planning to approve on Wednesday an extension of the debt ceiling limit until May 19th.
Although the legislative language did not mention any specific dollar-amount which can be raised, it did say that the federal government was allowed to borrow money sufficient enough to pay its obligation in the extended period.
The planned extension of the deadline is a marked change from GOP’s earlier stance when it vehemently opposed any more increase in the debt ceiling limit. The move also allows the GOP to buy some more time to put press for its demand on spending cuts at the two other budget deal deadlines. This way, the U.S. economy will not be at risk of defaulting.
While the deadline to reach a resolution on automatic spending cuts issue is March 1, the cut-off date to decide on funding for government agencies and program is March 27.
The U.S. treasury breached its $16.4 trillion debt ceiling limit earlier this month and has money just enough to run day to day affairs sometime between mid February and end of March.
Nevertheless, top Democrat leaders are not convinced with the GOP’s plan.
Assistant Senate Democratic leader Richard Durbin of Illinois said short-term debt-limit extensions would keep the business sentiment languishing in uncertainty.
“I wish they’d stop playing games with the debt ceiling,” Durbin said, according to Thomson Reuters.
Earlier on Sunday, Senator Charles Schumer, another member of the Senate Democratic leadership, said that the Senate would approve a budget, however, it would put emphasizes on revenue increases. This is because, budgets passed by the House of Representatives in previous two years, relied completely on huge spending cuts directed towards entitlement programs (Medicare and Medicaid).
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.