GOP bill could delay debt showdown

November could become the new deadline for a showdown between the White House and Congress over the debt ceiling.

The House is set to vote on a Republican debt prioritization bill next week that could, if adopted, extend the real debt deadline into November, experts said Friday.

Currently, the debt ceiling is set to come back into effect on May 19. After that, Treasury Secretary Jack Lew can take “extraordinary” measures to keep the debt at $16.4 trillion before the government has to start defaulting on payment obligations.

Bipartisan Policy Center analysts Shai Akabas and Brian Collins last week estimated that the extraordinary measures can likely extend the real debt deadline until between early September and October.

The Republican bill — the Full Faith and Credit Act — would add a month more, if adopted, they said Friday.

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The bill would allow the Treasury department to incur new debts just to pay bondholders and Social Security trust fund payments. 

Akabas and Collins said this would allow Treasury to make about $150 billion in bond payments after May 19 and before November, when it would not be possible to avoid missing other payments. 

Republicans say their bill takes “default” off the table. Democrats argue that millions of other government payment obligations are not covered and that failure to pay uncovered benefits and contract payments are also forms of government default. 

The bill has little chance of passing the Senate at this point, but could see action if the debt-ceiling standoff is still not resolved by the early fall. 

A standoff over the debt ceiling caused a equity market sell-off in 2011 and contributed to slower job growth and higher borrowing costs for the government.

A replay looms.

At this point, President Obama is still pushing for a budget agreement that includes tax increases, while saying he will not allow the debt ceiling to be taken hostage by Congress.

Conservative groups are demanding a balanced-budget plan without tax increases be adopted in order to allow an increase in the debt ceiling.

House leaders so far have not come up with a concrete plan for the debt ceiling other than the debt prioritization bill. Last week, Republicans discussed linking a tax reform measure to a debt-ceiling increase.