On Friday House Republicans announced they will agree to raise the debt ceiling for three months, a concession to their previous refusal to raise the country's borrowing limit. They are doing so along with the provision that both the House and Senate pass a budget so Congress can negotiate long-term spending cuts to address the deficit.
A debt ceiling extension is a concession for Republican House Speaker John Boehner, who previously demanded that any increase in the nation's borrowing limit must be accompanied by an equal cut in spending. According to his office, Boehner said it is not in the country's best interest to refuse a debt ceiling increase and risk defaulting on its loans:
A long-term increase in the debt limit that is not preceded by meaningful and responsible reductions in government spending might avert a default, but it would also invite a downgrade of our nation's credit that damages our economy, hurts families and small businesses, and destroys jobs.
[See a collection of political cartoons on the budget and deficit.]
The agreement is a victory for President Barack Obama, who has refused to negotiate with Republicans on the debt ceiling. The president has demanded that the country pay the bills it has already incurred, saying that many Republicans voted for the spending in the first place. The White House said it is "encouraged" by the Republican announcement:
The president has made clear that Congress has only two options: pay the bills they have racked up, or fail to do so and put our nation into default … We are encouraged that there are signs that congressional Republicans may back off their insistence on holding our economy hostage to extract drastic cuts in Medicare, education and programs middle-class families depend on.
The United State's first debt limit was set in 1917, and raising it has become a pattern as of late in an increasingly divided Washington with two parties at odds with how to address government spending. Democrats and Republicans have consistently failed to reach any sort of long-term agreement to deal with the country's budget, and have instead resorted to repeated short-term extensions of borrowing ability. The ceiling was increased six times during Obama's first term, and it was raised seven times during George W. Bush's presidency.
[See a collection of political cartoons on Congress.]
Although Republicans have agreed to extend the debt ceiling, the United States's budget problems are far from over. Congress is still gearing up for budget fights on both sequestration and government financing: On March 1, $1 trillion in budget cuts are set to automatically begin—a deadline initially scheduled for January 1 but pushed back as a part of a deal to avert the fiscal cliff. On March 27, the law financing the government expires, and failure to reach an agreement could lead to a government shut down.
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