GOP bill would push debt limit fight to summer

By Peter Schroeder - 01/23/13 01:33 PM ET

The next battle over raising the debt limit under a House Republican proposal would likely be sometime this summer, not May 19.

That's because the legislation being advanced by House GOP leaders would still allow the Treasury Department to employ "extraordinary measures" to buy more time under the debt ceiling once the temporary suspension of the limit allowed by the bill is reached.

Typically when the government reaches its borrowing limit, Congress responds by simply raising the amount the government can borrow. But House Republicans are taking a novel approach with their new bill by actually suspending the debt limit until May 19, at which point it would be automatically raised by whatever amount the Treasury Department borrowed to meet obligations during that time.

A GOP aide told The Hill that the Treasury's extraordinary measures should not be impacted by this new approach, which means that the next time the debt limit would need to be raised would likely be sometime in the summer, not on May 19.

The Treasury regularly employs extraordinary measures when it reaches its borrowing cap as a way to stay current on necessary obligations and avoid default. The government is currently employing such measures after having reached the $16.4 trillion borrowing cap on Dec. 31. The measures, which include things such as temporarily not investing in retirement accounts for federal employees, are expected to keep the government paying all its bills at least until mid-February.

The exact amount of time these measures can buy can vary, depending on the exact cash flow of the federal government at a particular point of time, but typically they are expected to provide at least two months of accommodation.

The White House gave its tempered blessing to this approach Tuesday, saying it would not oppose the legislation if it reached the president's desk for his signature. And Senate Democrats announced Wednesday that they would also take up the measure if the House passes it.